Do you understand what a Freeze would do to your A plan?
If they freeze the plan all future contributions stop.
If you are a Senior Widebody FO or JR Capt with 10 years, your future Pension will reduced by over 30% from the A plan.........

As to the NWA guy, He got screwed, Maybe not screwed as bad as the AAA DAL or UAL guy but screwed none the less

Look we will agree to disagree.............. I am tired

You perhaps are thinking of a freeze made under BK not one negotiated with a fully funded plan and a solvent company. But I will certainly agree to disagree especially if you agree it needs to be addressed next contract.

As a Pilot who is currently dealing with the PBCG I beleive I have some "On the job training" concerning this issue.

A Freeze is a Freeze and it doesn't matter if under BK or not.

A termination is a quite different.......doesn't matter if under BK or not. (IBM a few years back).

A distress termination (ala UAL and AAA) is a distress termination and is when the PBGC gets involved.

Bankruptcy really has nothing to do with it, other than giving MGT an easier means to accomplish the above.

Guess your not that tired.

As a pilot who hopes to never have to deal with the PBGC; We can't negotiate a better deal than NW?

Assumption: Fedex wants out of the A Plan business. I am willing to see how much they are willing to pay to get out of it. Because money in my name is worth more to me.

First off we have a much better deal than NWA!
FedEx isn't in BK or even close. Our Pension are currently secure.
I am the first to admit that could change, but I believe we are secure in the near term. For the Pilot with 15 or more years to go, it is something worth exploring in the next contract.

If the company wants out of the A plan now they can certainly come to our negotiating committee with a good offer. Until then there is no immediate sense of urgency as the company's pension fund just go a nice windfall.

You apparently didn't keep up with the early stages of our last round of negotiations. Our guys were trying to see what the company would offer for a rebalance and Lump sum options. They offered pennies on the dollar. Is that what you want?

Boy you certainly know how to make me tired.

I will put on my rose colored glasses and bet on fred for the next 40 years. Think anyone at UAL had this conversation in 2000.

I don't remember seeing where the executives at FedEx were going to give up their Defined Benefit plan. They have always had a "separate" one from the general population except for the pilots. Their defined benefit plan is in the same group as the pilots, that is my understanding, and that is from hearing it straight from the horses mouth. Therefore, I don't think that they will give theirs up, and that ours will continue to be a benefit for our pilots.

The other thing to remember is that a defined benefit plan is actually cheaper for the company than a straight defined contribution plan. They get to save cash up front and rely upon their quite sizable investment plans to pay the benefits down the road. In addition, they win when pilots die before they reach a certain number of years into retirement and they realize a gain. If they paid it all up front, it would cost them more over the long haul.

Another thing with going with a single plan consisting of solely defined contribution is that you bump up against IRS limits for the year, which is somewhere around 45k or so.

FDXLAG, if you have more indepth questions on this, I would give the retirement committee guys a call and discuss the various options with them and get their perspective on past/current/future issues in the retirement arena. I know for one that I am not anywhere near an expert on this issue, and I defer to their knowledge on retirement issues at all times.

A few years ago I started get nervous when companies in poor financial health started to toss their defined plans. Then I really got nervous when the financially healthy ones joined the party.

My company has an excellent defined benefit plan, retiree medical, and throws in 75 cents for every dollar I put in my 401k. There has been no indication that there are any plans to change that, but hey, if healthy companies such as FDX feel that it's necessary to take this step then how long can it be before I'm looking at the same situation?

I'm not in too bad shape right now, but my situation is mostly due to luck and not comprehensive retirement planning. I maxed out my 401k contributions just before 9/11 (I know, I should have done it earlier). I've got almost 29 years where I'm at and looking at retirement in 5-7 years. I start drawing a reserve retirement in four years (30 years, 8 active, the rest USAFR and USAR) so with all of that and my wife working until she's 80 we should do OK.

Long story short, the world has changed and like it or not, we have to look out for ourselves. Wish I had figured that out earlier. Too bad we can't get a Mulligan on life.

Thanks sleepy. I am not worried about the health of the DB plan anytime in the near future. However, when depending on a DB plan you are betting on the company for the rest of you life. With the additional disadvantage of if you go, its gone (unless you pay a substantial premium). I am not that confident in my Air Force pension.

The R&I people have my respect (although USAIR probably had the same respect for their R&I guys). We have the finest safest DB plan in the world today. But as FEDEX pilot force grows the liability and the corresponding size of the bullseye sign on the program grow. Someday we may have the last DB program in the private sector, but guess what, someday it is going away. Which part don't you think I understand?

I think we need to look at this another way. I agree with Sleepy on having heard our DB is lumped in with managements. Back in 2002 or so, I believe the company offered all employees the option to keep their DB plan or swap to a cash balance plan. Anyone hired after that date was put in the cash balance plan.

Now the company has forced all employees into the cash bal plan for any future benefits. Both of these actions have helped the CBA guys..(us). FedEx's pension liabilities have not been increasing since 2002. I only mean this in the sense that no new people are being added to the system. Now the liabilities probably get smaller every year as people no longer take from the pot. (die)

Should the company stay solvent the money required of them to put into the DB plan would continually get smaller as fewer and fewer people are covered.


Sleepy also makes another good point about the IRS limits on DC plans. If you max out your 401K and are a NB capt or higher your also getting about 15k in the B plan. Add in sick buy back and you've hit the limits. So, an increase in the B plan, or 401K match, etc, would then cut off your sick buy back. But then they would just cut us a check for the sick buyback if we went over the limits. :)


Just a few thoughts.

Past...