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10-16-2010 | 09:04 PM

#31

Tuck

Line Holder

Joined: Sep 2006

Posts: 1,209

Likes: 12

From: MD11 FO

Quote:

Originally Posted by Jetjok

Tuck,

I guess I don't quite understand your above (underlined and bolded statement. As well, your comment, which I highlighted in red, also doesn't seem to ring true.

Are you saying that over the course of a 20 year FedEx career, a guy will contribute about $10,000 into the VEBA fund, and then when he retires, he'll only get about $3000 worth of benefit from it, for each year he lives after retirement? And you're saying (your statement in red) that that really makes little sense? If that's what you're saying, I tend to disagree, because $3k a year in benefit, far outweighs what you could make if you had bought an annuity for that same $10,000. I'd expect that you'd see less than $1K per year on the $10K.

Veba seems to be a good deal, if you live long enough to actually use it. As well, I don't ever remember it being created as an incentive to get older guys to retire earlier. But then again, as I get older, I find myself suffering from that dreaded disease, CRS (can't remember sh!t.)

JJ

You bargained for about $43 million from the last contract in VEBA - that's money that arguably could have gone to other recipients (yeah I know what the R&I and NC says). In addition you pay about $500/yr for every year you work. The most you'll draw out will be about $1100/person/year in 2010 dollars for every year you survive. I don't see that being such a great deal and I don't see why anyone would be excited about getting an extra $1100-$2200/yr (if they're still married) in retirement. Will that money really make any difference to you in retirement? 43.2 million divided by 4500 pilots is about $10,000. This is all assuming the money is still there. Every pension plan in 2000 had some sort of actuaries that said the money would be there based on current predicted returns - most are way behind today. So who knows how well that money you turned over will do. Just clarifying it.

I do think the HRA ($25K for those over 53) was put in as a partial incentive or at least to reduce the disentive for folks to retire on time (that's age 60 for all you old folks that haven't figured that out yet). As defined in our contract, age 60 is NORMAL RETIREMENT - hopefully what we all and you all are aiming for.