And what you fail to realize is that A Funds are going away, period. They are either being converted like fedex is doing now or the are being trashed (see United, Delta, USAIR). Why because you can't compete in the global economy with one. How many of those thousand and thousands of Toyota-America new hires are laid off UAW workers. Or how many laid off UAW wished they worked for Toyota.

Did the FEDEX non union employees get screwed? maybe. Do they have a future, alot better than the average Ford employee.

I did not want the companies cash balance plan 2 years ago, I do not want it now. But since our contracts seem to out-last business cycles I would like for us to start talking about freezing, then converting our A Fund. I would rather be in the NW frozen A Plan than USAIR with a defaulted A Plan.

And I am glad they are fixing their bottomline 10 years out because that is when they will have to start paying my A fund.

Gentlemen,

I am not a FDX guy, but I do have some experience with having a pension yanked out from under me. Once you are in the middle of your career it is tough to transition from one plan to another, but not as tough as seeing your plan go away. The problem with defined benefit plans is there are IRS restrictions about how much the company can put into the plan, dependent on whether the plan is properly funded or over funded. In 2000 the DAL pilot retirement trust was over funded by $1B. All during the late 90's DAL did not put a penny into the fund because stock market was doing so well the value of the trust was way over what was required and the IRS would not permit any additional contributions without serious tax ramifications to DAL. When the perfect storm hit in 2001 the market was already tanking and the pax business was stressed to where the companies could not make up the shortages as fast as the government required. That is why the big push to stretch out the time allowed to save the pensions that could be / would be saved.

For the sake of argument let's say to fund a defined benefit fund it would require a 10% contribution annually from the company. If the company would put that same 10% into an account in the pilot's name every year, regardless of whether the market is doing well or not, I think it would be superior to the risk of having a defined benefit plan fail. Additionally I think it would be more fair in that each hour flown by each pilot would be paid at the same rate. With a final average earnings plan (I was supposed to get 60% of my highest 36 months) a pilot who gets hired young and has a long career may be penalized for his longevity. Since the time value of money is so significant I think if I were under 30 it would be way better to have a defined contribution plan.

In the end the best feature of the defined contribution plan would be it belongs to you, and is in your name. It would be portable if anything happened and your company wasn't there any more (never say never). Additionally if you died soon after retirement your family and estate would have much more money than if they had to rely on a reduced survivor benefit. In the end if you could get the company to fork over the same amount of money for a defined contribution plan as they would for a defined benefit plan I would vote to have the money in my own account and in my name.

Thanks for that Yak.....

Yak, great post. I'm in agreement with you. I would rather get a 17% b fund( just throwing a number out there) That would be in my name than keep an A fund that's not guaranteed.

I realize the A plan peril.......i have already lost one from a previous.

I am glad you do not want the company's cash balance plan because that is what they offered us.

I do not want our A plan frozen!!! Freezing the A plan is a screw job. That is what the company just did to all Non Union folks. If the company wants to get rid of our DB plan, They can offer to buy it out!! (or re-balance) There is a major difference between a buyout and a Freeze.

If Age 60 changes(when not if) the Company's pension fund will become overfunded. (at least for 5 years)
There will be Less Pilot's retiring at Assumed age of 60 and for every year a Pilot works past 60 that is one less year the company will have to pay a pension................not to mention said Pilot's Life span will be shorter.

I agree we need to explore options. Problem is we don't open section 6 for another 3 1/2 years. Yes I would like to see a pairing down of the DB plan and increasing the DC plan. For us older guys (with less than 10 to go) It will be imperative that we get full credit for our Vested DB plan. Ten or less years of a higher B plan isn't going to make up the difference. The sky ain't falling yet. Just be glad you have a collective bargained agreement.

Freezing of A plans does not have to be a screw job. It can be a screw Job. Just have to make sure someone with more than 10 years to go is on the negotiating commitee.

I agree section 6 (probably) does not open for 3 years, lets talk about it now so that it becomes one of our core top 3 when it does.

Freezing of an A plan is a screw job. Name one company that "Froze" an A plan where the employees did not get it up the A$$?
Freezing It doesn't fix the issue anyway. The company could still terminate a "Frozen" A plan.
Re-balancing is a more prudent way to go and I am sure our R & I guys are aware of all this and I expect this is the way we will go in 3 1/2 years.
Also Lump sum distributions are another option.

You freeze an A Plan not because of current obligations, as you say it is fully funded right now. You freeze it because you are worried about funding for the guy you hired yesterday, when he retires 30 years from now. This is the same reason a frozen A Plan is less likely to be terminated. Freezing the A Plan actually secures the current obligations.

Name one company. Ask a guy who retired from NW in 2000 if he got screwed, make sure his buddy from USAIR is in the room. Getting screwed is relative (redneck jokes please).

Ask a NWA guy who is planning on retiring in 4 or 5 years how great a frozen A plan is.

You must realize that Pensions are deferred compensation. That is money you already made years before just agreed to as a pension in lieu of a higher hourly rate.................................It is like taking a retro active Pay cut from 15 years ago.

Freezing a pension is still a screw job!

It is all in what you negotiate. I would hope that when frozen, my high 5 is not, that is why I want some one with time left to have some input. If that is the case I would not be screwed.

Lets ask. Any NW guys here, would you rather have the frozen plan or the alternative?