Originally Posted by
Sunvox
Had to go to the NC to get the truth on this. The 16% that Delta gets is not extra profit sharing as is oft remarked by virtually everyone. The profit sharing pool is calculated FIRST using the much discussed metrics and THEN the 16% is calculated and taken OUT OF that pie. It is not an extra 16% paid out by the company on top of the profit sharing pie. Even though it's not as great as it seems on first blush, it's still great because it reduces the tax bill on the profit sharing.
This does not alter the fact that Delta consistently outperforms UAL on profit and therefore has much bigger profit sharing awards period.
Lastly, for those wanting to use profit sharing to enhance their 401k contributions one can simply increase the amount taken out of their regular pay check to equal whatever they desire, of course, within the limits set by the government which this year won't matter since the PS is so paltry.
This is incorrect for Delta. The 16% is paid on top of the profit sharing. If profit sharing is 15% and you had 300,000 in earnings you get 45,000 in profit sharing plus 16% placed in your defined contribution plan for a total total of 52,200. The profit sharing is pensionable exactly the same as regular earnings. You may also elect to contribute to the DC up to IRS maximums as much of the base 45,000 you desire.
In addition to being fully pensionable profit sharing also counts toward your FAE for disability calculations. As a example a CA earning 500,000 if profit sharing was 15% would be credited with a FAE of 575000. His disability payment would be 287,500 per year plus an additional 32% credited to his DC for a total of 379,500 per year. The union disability payment program which is pilot funded would be in addition to that number. The program described above is 100% company funded.