MD11Fr8Dog

Because its contractual! 2 ways to lose it, bankruptcy or give it away!

kwri10s

Another problem with your assumptions is the life expectancy number you are using. Without checking, if I remember correctly for every year you work past age 60 your life expectancy decreases by 18 month. So if using an example if you retire at 60 and your normal life expectancy is 20 years. Retiring at 65 means that your average life expectancy is now 80 - (5*1.5) = 72.5. So instead of receiving benefits for 20 years you will receive them for 7.5. You need to rework your numbers with those factors in mind.

So bottom line, can the company expect us to reduce our life expectancy just because they want us to? Work longer you will die sooner. I don't think any study says otherwise.

FamilyATM

Numbersguy, the answer to your question is early retirement and the 3% penatly is what was in the employee benefits handbook twenty years ago when I arrived here. Looking at your post a change in the giving up early retirement is no big deal, you are over forty and have been here eight years. Some of us will be here over 25 years when we reach 55 years of age, so maybe just maybe we don't really see working 35+ years for a 25 year pension pay out. I wrote FWS about our pension in 1994 after OBRA'93 when our pension was going to be capped and we got that fixed(not because of my letter but because of a unified voice from the crewforce calling foul). So, no I'm not inclined to give this up as easily as you but I have more time invested here than you.

Daniel Larusso

I was just saying that far too often we're our own worst enemy, negotiating with our selves because we each individually 'know' the solution to problems that often haven't presented themselves. Sometimes I think when it comes to decision making outside of the cockpit, I think we all should have our hands tied behind our backs and mouths duct tape. 'Hero' seemed more appropriate than 'Capt Save-a-Hoe'

numbersguy

familyatm, so what you're saying is that the company defined those rules prior to our negotiating contracts here. what's to prevent fedex from convincing a memphis judge that because the definitions pre-dated our contractual agreement, that the same principles shouldn't apply now (early retirement being defined as 5 years prior to mandatory retirement and penalty equating to 3%/year)?

Or if a judge doesn't want the bad press, how many $2500 contributions to the washingtonians will it take to get the law rewritten? I don't think too many.

How does your pension computation change if this thing changes tomorrow? maybe now you can't go at 55 or 58. maybe retiring at 60 isn't a financial option for you and your family if you have to do it at a 15% reduction. Now you're working longer and dying sooner....as the studies show.

I think if everyone does the analysis, every single pilot at Fedex will see how this change will negatively impact their financial future...from the 62 year old to the 26 year old. If we set the terms now, we collectively win. If we wait, everyone loses.

MD11Fr8Dog

They no longer pre-date the agreement. They ARE the agreement now! Its codified!

numbersguy

kwri10s: you're absolutely right. Actuarial tables take those varying life expectancies into account. My example is even rosier than real life. The older one waits to start the annuity, the shorter the payer has to pay it. The pension benefit obligation (PBO) takes declining life expectancies into account. The PBO is the amount fedex must be able to pay to cover existing possible pensions. It is defined by law.

Looking at the PBO shows the main reason why Fedex has such a HUGE incentive to move this to the right. The PBO hasn't changed, but as the R and I guys just reported, the pension fund's value has been significantly reduced. How do you think fedex is going to make up the difference? They push the terms of our pension to age 60 defining early retirement, with a 3%/year reduction for going early, and they just made up all that money they need for the obligation. Problem solved.

I kept the mortality age fixed in my example to allow people to see how the present value of the annuity changes with varying start dates. In reality, the older one waits to start, the lower the present value will be, as life expectancy drops.

Our only hope is to renegotiate the terms now, otherwise everyone who planned on going at age 60 will now be doing it at a 15% reduction in their annuity. I, for one, don't want to wait around and see that happen.

numbersguy

md11fr8dog. I see three ways for this to change: bankruptcy, negotiations, or external influence. But it looks like nothing I can describe will help you believe that this can be changed outside the boundaries of our contract. it's an industry wide issue so I see an industry wide solution coming... just don't know where from (the courts, the legislators, or companies saying "we're gonna do this and what are ya gonna do about it?....if the principles of early retirements predate contracts, I think legal precedent is already set). we'll just have to disagree.

I prefer to see this negotiated now, but I'd go for a side letter, a parking lot deal, or a drug deal at this point. I hope I'm wrong, but I think this change is coming sooner rather than later.

How does your A plan change if, by some unforeseen circumstance, the rule changes?

UnskilledFXer

Thanks for the info LAG. I was hoping it was somewhere in the actual contract. I have relied on information in the PBB before only to find out the information printed there was wrong. Specifically in the case of medical insurance coverage.

My guess is, if a change in normal retirement age benifits the company we may be in for some suprises.
Just being "devils advocate" for a minute, prior to the "age 65 law", most pilots retired at age 60. Some might even say, that was "normally" when they retired. Since the rule has changed very few pilot have chosen to leave at age 60, judging the group as a whole one might conclude that retiring at age 60 is no longer normal. Within four years enough data will be collected to statistically show what is normal. If we are smart we will get age specific data put into the contract. If we do not, and rely on the PBB as justification, we deserve what we get. Those who think the company will "drag thier feet" on this contract, like they did the last, are forgetting one thing. In the last round of negotiations, delays were beneficial to the company. If current economic conditions exist, the company will be ready to go on the amendable date. Why? Because brevity and poor economic data will be in their favor, supporting an argument for a concessionary or vastly reduced contract.

Piloto Noche

I would like to re-visit this concept...The company "giving up something" to change the retirement age.
In all our previous negotiations, the company has come to the table with the Pie concept. They say, "Look, here's the Pie, split it up however you want. And if you want to delay splitting up this pie, we can continue operating with the current contract forever".

The union has always responded, "You can afford to make the pie bigger." and of course the company says "no we can't" or "we're not going to make the pie bigger." So, the only stick we have is the ultimate one, the job action. How many job actions has the FedEx crew force participated in thus far? Do you really think this group could pull one off this time? (I know, I'm preaching to the choir here; but the APC group isn't typical of the crew force.)

So, again, what would you be willing to give up, for the rest of your career, to keep the age at 60?