Quote:
What are "seniority realignment benefits"? I've heard this parroted by a block rep, but intuitively it doesn't seem to provide any cost savings to the company.Originally Posted by NoHaz
I think they will continue to try to avoid an excess as the benefit package is pretty expensive. Also, the ability to bid to relieve the excess throws off the seniority realignment benefits. Essentially you have senior people doing lateral transfers to grab move package 1 with dislocation allowance, house buying-selling etc.
I put together a excel spreadsheet, and ran multiple scenarios, and the best a realignment does is break even (I did not factor in vacation- that would make it negative)
Two examples for brevity- a 10 yr MD Cap 226/hr + 15 yr 72CAP 205=431
realign those guys for seniority 15yr MDCap 238 + 10 yr72Cap 195= 432
Same margins for a 3 yrMDFO + 7 yr 72fo (135+126=261) (147+115=262)
aggregate those numbers over a large realignment and the company loses $$ once everyone gets realigned- (plus the training cost to execute this folly)
The ONLY benefit to a strict senioritiy alignment is if the company wants an immediate furlough- (no need for excessing & retraining-just cut from the bottom) But there is a HUGE cost to realign, then operating at a comparative loss to the pre-alignment- it does not make sense.
Perhaps there's some other factor... vacation is either an even wash or makes the seniority realignment even more costly(between 10 yr & 19 yr same 29 days, but in 2nd example 3 yr gets 15-7 yr gets 22- a 5 day loss) then throw in the B fund contributions....
You get the point.