Originally Posted by
kwri10s
….The MBCBP only "looks" possible because they are using 6.5% ROI which sounds pretty inflated to me and taking all calculation out to age 65. The company is on the hook to "make whole" any losses when a pilot wants to withdraw. We are allowed to withdraw the 33K per year (max number) once you reach 59.5. There is no way the company will ever want to pay up in order to make pilots whole. It is a lot more prudent for the company to "ensure" the funds are invested to never lose capital. They don't care what the returns will be only that the accounts don't go below the capital amount. If you invest to protect capital, like all of us approaching retirement start to do, you will start getting much lower ROI. 6.5 is a pipe dream. IF 6.5 was truely possible, then ALPA would have trotted out 5-10 different examples from other MBCBPs at various companies to show how their returns are stacking up. There are no examples. No actual fact based numbers…...
There’s any easy third party source to ask. In fact, they are the ones who provide our B fund investment options:
Data Sources: Vanguard & Fidelity 10-year forecasts…that’s the longest forecast they will provide for legal/fiduciary reasons.
Based on 55% equity index/ 45% bond index.
The current 10-year forecasts range from 3.875 - 5.425%
Of course, ASSUMING a larger 6.5% return will make the final modeler estimates bigger, especially over a longer time horizon.
Solution in TA 2.0 ??
Raise the 11% annual contribution.
If you listened carefully during the road shows and on-line Q&As, your NC even stated this can be a reasonable request/strategy…..in the future! (But Not now)
So I guess this really isn’t a PERMANENT solution to retirement for ALL….but I am confident that ALPA can do the math. They just need to be willing to do it objectively and critically.
In Transparency, Integrity & Unity (for Everyone),
DLax