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Old 12-09-2014, 06:28 AM
  #9911  
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Originally Posted by DC8DRIVER
Why should we negotiate for ANYTHING that is not guaranteed to be there???

Following is a direct quote from our current contract:
"Profit sharing, to the extent there are profits to be distributed, shall be paid..."

Regardless of whether you call it a retirement plan or simply a bonus (because we are such darn nice guys), there is a very real possibility that instead of the insultingly low checks that we now get, there could very well be ZERO to share. As we have seen during these last years of $100 million(+/_) annual profits crew members are lucky to break four figures after tax on their profit sharing check.

Profit sharing is an illusion. The company can make any profit above their $75 million threshold disappear or at lease shrink to the point of being worthless. Eventually, the cost of administering a profit sharing system that nets a pilot a few dollars a year is barely worth the company's time and it sure isn't worth the union's time to negotiate or review for accuracy.

Furthermore, the IBT retirement fund is overextended and we will end up funding a plan that pays more in benefits to retired IBT members than we are putting into it. Again, the money is not guaranteed to be there for us when we retire.

We urgently need to move away from the ancient but fond memories of huge profit sharing checks and into the mindset of a guaranteed, company funded, and employee owned and controlled retirement plan.

8
Your comment about the IBT retirement indicates a lack of understanding about their plans, of which there are several...some excellent.

Profit sharing has always been an illusion, regardless of whatever company. You keep remaking my point. Take the profit sharing, make it hard dollars in a paycheck and then go in and negotiate a retirement plan. 401(k)'s aren't the answer alone because they are as voliatle as the markets. They can be an adjunct, but should not be the only component.
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Old 12-09-2014, 06:29 AM
  #9912  
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Originally Posted by chip1
VERY well said. Thanks! Also, F no on anything related to a Teamsters retirement. What a joke

Tell us what you know about the IBT retirements...
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Old 12-09-2014, 06:43 AM
  #9913  
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Originally Posted by DoomedTX
I interviewed last Wednesday and got the good news email this morning! I hope the other 11 are reading the same email right now!
Congrats to you DoomedTX. Hopefully you guys and all of us swimming in the pool will get class dates pretty quickly.
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Old 12-09-2014, 07:39 AM
  #9914  
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Originally Posted by SVA402
No. Nope. No way. Direct 401K contribution is the only option I would vote for and almost everyone I talk with agrees. Too much history of pilots losing retirement to have anything that is controlled by someone other than the pilot or could in any situation ever be taken away or lost if that retirement group went out of business. I have yet to hear a valid argument for anything other than what every other airline has.
I recently realized that I have never heard the word "bonds" in cockpit conversation. Plenty of hot stock tips over the years, talk of the current mutual fund fad, lots of leveraged real estate deals and of course various systems for market timing.

My point is that pilots are very, very poor at financial planning.

The "valid argument" for a defined benefit plan is the term "longevity risk". Pooled assets in a defined benefit plan of at least 300 participants solves that problem for the individual. 401k programs can only address it by buying an annuity, which is less efficient than a defined benefit plan and has greater risk.

Defined benefit plans have existed for centuries, and they worked just fine until the 1980s and the pillaging and plundering of any plan that was deemed to be "over funded" during up market periods (and they still work fine in Europe, where the rules were never relaxed). Once upon a time the CFO and CEO who underfunded a retirement plan could be looking at criminal charges. Today they just dump it on the PBGC and get a bonus. So the problem is not the structure, it is the recent practice of lax enforcement.

The Teamster's Central States Pension Fund is in trouble, of that there is no doubt. It is also a bit of a special case, and there are many other Teamster plans -- most of which are on solid ground. Union plans by nature have the advantage of not having company CFOs drooling over them. And thus I offer the argument that the problem with the loss of pilot pension plans was not that they were defined benefit plans, but that ALPA did not pull them into the union when deregulation came to pass.

Any pilot basing his retirement planning on what he hears from other pilots at the breakfast table had better like cat food.
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Old 12-09-2014, 08:39 AM
  #9915  
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Originally Posted by 742Dash

The Teamster's Central States Pension Fund is in trouble, of that there is no doubt. It is also a bit of a special case, and there are many other Teamster plans -- most of which are on solid ground. Union plans by nature have the advantage of not having company CFOs drooling over them. And thus I offer the argument that the problem with the loss of pilot pension plans was not that they were defined benefit plans, but that ALPA did not pull them into the union when deregulation came to pass.
Huh, didn't someone already say that?...Thanks 742Dash. ATC said that above.
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Old 12-09-2014, 08:47 AM
  #9916  
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Originally Posted by DoomedTX
I interviewed last Wednesday and got the good news email this morning! I hope the other 11 are reading the same email right now!
Congrats on getting the nod.

And EXCELLENT work on the collateral duty you put together. Make sure to pay it forward.
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Old 12-09-2014, 11:10 AM
  #9917  
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Originally Posted by 742Dash
I recently realized that I have never heard the word "bonds" in cockpit conversation. Plenty of hot stock tips over the years, talk of the current mutual fund fad, lots of leveraged real estate deals and of course various systems for market timing.

My point is that pilots are very, very poor at financial planning.

The "valid argument" for a defined benefit plan is the term "longevity risk". Pooled assets in a defined benefit plan of at least 300 participants solves that problem for the individual. 401k programs can only address it by buying an annuity, which is less efficient than a defined benefit plan and has greater risk.

Defined benefit plans have existed for centuries, and they worked just fine until the 1980s and the pillaging and plundering of any plan that was deemed to be "over funded" during up market periods (and they still work fine in Europe, where the rules were never relaxed). Once upon a time the CFO and CEO who underfunded a retirement plan could be looking at criminal charges. Today they just dump it on the PBGC and get a bonus. So the problem is not the structure, it is the recent practice of lax enforcement.

The Teamster's Central States Pension Fund is in trouble, of that there is no doubt. It is also a bit of a special case, and there are many other Teamster plans -- most of which are on solid ground. Union plans by nature have the advantage of not having company CFOs drooling over them. And thus I offer the argument that the problem with the loss of pilot pension plans was not that they were defined benefit plans, but that ALPA did not pull them into the union when deregulation came to pass.

Any pilot basing his retirement planning on what he hears from other pilots at the breakfast table had better like cat food.
The problem was deeper than that. Post deregulation, managements were given numerous waivers...despite unions protesting them...to defer scheduled funding payments. Thus when a pilot retired, the "A" plans were able to buy the annuities, but the future retirees funding was at risk over the deferrments. The worst was Lorenzo, who guaranteed the deferrments with junior subordinated stock in Texas Air...not that the senior preferred was worth anything either.

The government (read Republican Administrations) turned a blind eye and then when the bankruptcies hit, the "A" plans were broke...and the airlines got bankruptcy judges to let them dump the underfunded pensions on the PBGC (read taxpayers)

The "B" plans, controlled by the pilots Pension committees at the individual airlines took the same hits. One; Eastern, owned almost every prime piece of commercial real estate for about 3-4 miles around O'Hare...they bought it when it was farmland. Problem was everyone needed to cash out now when the airline went through Ch. 11, and the real estate market was dead, so they took another hit.

Central States is not in good shape, others are in ridiculously good shape, well overfunded and strong. You have to meet their standards to get in. And they get the funding payments directly from the company, no arguments.

Same thing with TeamCare, their health insurance plan. Outstanding, relatively inexpensive and very few, if any games. Go to any doctor, they pay.

It would do the group very well for the incoming officers to look at them and report back. I'll bet that the fact sare vastly different than information that was "leaked" a few months back.

Any pilot basing his retirement planning on what he hears from other pilots at the breakfast table had better like cat food
WHAT?????????? Now what am I gonna do with that garage full of water purifiers and Acai juice I told would make me a gadzillionare??
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Old 12-09-2014, 11:33 AM
  #9918  
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Okay, if the Teamster DB plans are such a great idea, why hasn't the industry gone in that direction?

Why hasn't ALPA convinced the Legacy masses that it's a better idea than a 401k contribution?

The core issue is trust. (At least with the 401k, I can hold the idiot in charge accountable.)

Nobody would trust management with their retirement anymore, and I doubt you'll find a huge groundswell willing to turn it over to the Teamsters, either. But I'm willing to listen to a cogent argument, although perhaps you might have more impact on the 1224 forum so we know who's talking.


Originally Posted by 742Dash
My point is that pilots are very, very poor at financial planning.
But I should listen to you?
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Old 12-09-2014, 01:47 PM
  #9919  
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Originally Posted by captainv
...But I should listen to you?
I find that the older I get the less I know, so probably not.
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Old 12-09-2014, 05:45 PM
  #9920  
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Originally Posted by captainv
Okay, if the Teamster DB plans are such a great idea, why hasn't the industry gone in that direction?

Why hasn't ALPA convinced the Legacy masses that it's a better idea than a 401k contribution?

The core issue is trust. (At least with the 401k, I can hold the idiot in charge accountable.)

Nobody would trust management with their retirement anymore, and I doubt you'll find a huge groundswell willing to turn it over to the Teamsters, either. But I'm willing to listen to a cogent argument, although perhaps you might have more impact on the 1224 forum so we know who's talking.




But I should listen to you?
If you had been around during the time, you'd know that the airlines don't want to have anything to do with DB plans because they are forced to write the checks when they are due; they can't get a deferral waiver.

The Teamsters don't run or control the plans. They are run by independent actuaries and the IBT has no control over them at all.

What idiot will you hold responsible for the 401k?
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