1st overnite

I was told once that there was a yearly cap on contributions to the B fund. I looked it up in the contract and couldn't see anything. Was I given bad information or did I miss it in the contract?

SeeDub

It isn't a contractual cap, but an IRS type limitation that sits around $50k right now. Additionally, I can't remember if the overage is paid out directly or goes into your account as some kind of non-qualified status or maybe it's taxed.

Clear as mud, I know but hopefully somewhat helpful. Either way, this isn't something a junior FO like me is concerned about anytime soon.

KnightFlyer

Pilot Benefits Book

DLax85

...and the cap includes more than just your B fund --- it's your 401K contributions too

It may also include any IRAs contributions too

There was a push in Congress during the tax reform negotiations last year to lower the cap somewhere into the high 20s.

These type of reforms/changes are outside the CBA, but can have direct & drastic impacts on our compensation

Much like taxing so called Cadillac health care plans

Guys need to be paying attention, and get engaged, to what's happening in Washington --- not just Memphis!!

CloudSailor

alpa pac...

Albief15

I personally walked the halls of Congress as part of the FDX Legislative Affairs to argue against the 20%/20k cap two years ago as budget cuts looked at all options. It works against small business owners, and it works against high paid union salaried employees too. Fighting that we had support on both sides of the aisle.

Not trying to be infomercial here, but the PAC does a lot of work. Ready up on the websites and you will see some of the issues that go on. The battle is sometimes on the horizon, not just right down the street. A cap on that retirement would really hurt a lot of folks trying to do the "right" thing by saving and investing for their retirement. Erskin-Bowles wanted the cap...

Stay informed. Support the PAC.

http://www.irs.gov/uac/2013-Pension-Plan-Limitations

asiabased

This is the way and LCA explained it to me over beverages. I still have the napkin.

Congress sets several limits and there is one negotiable limit that we can control. I will use 2013 as an example.

Congress sets a limit for the maximum contribution of all of our plans. That limit for 2013 is $51,000 ($56,500 if you are over 50 and participating in the 401K catchup).

Congress sets a limit on 401K contributions (Pilot Savings Plan). That limit for 2013 is $17,500. If you are over 50 then you can participate in a 401K catchup which gives you an additional $5,500 for a total contribution of $23,000.

Next, and I think this is your question, Congress sets a limit for the maximum contribution to a percentage based program (Pilot Money Purchase Plan). That limit for 2013 is $255,000. We have a 7% Pilot Money Purchase Plan so the contribution limit is 7% of $255,000 which is $17,850 for 2013. The is the negotiable part. If we had a 10% Pilot Money Purchase Plan then the limit would be $25,500. Once you exceed $255,000 of income then the Pilot Money Purchase Plan is maxed out for the year.

We also have the Disability Sick Account. At the end of the year the company adds your left over sick bank to your Disability Sick Account. If your Disability Sick Account exceeds 686 then FedEx takes the difference, multiplies it times your hourly rate and adds that to your retirement. This occurs in January.

Lastly, if you add your 401K contributions (Pilot Savings Plan) to your Pilot Money Purchase Plan contributions you will see that it doesn't reach the maximum contribution limit which is $51,000 ($56,500 if you are doing the catchup). The only way that I see to get the maximum amount into your retirement ($51,000 or $56,500 if doing the catchup) is to have your Disability Sick Account full. If you are healthy then that is a personal choice (i.e. you have to decide whether to use your sick account as a scheduling tool). Any amount over $51,000 ($56,500 if doing the catchup) will be returned to you in the form of a check in January.

I am no expert. This is just the way it was explained to me.

Busboy

That is all correct. However, there are two more sources that will make you bump up against the 415(C) contribution limit.

The Company matching funds
Employee After Tax contributions (old OSP)

max8222

The vanguard website has all the info.

To see how you are doing and to see limits it is all in your vanguard online account.Log on to your vanguard account- open plan summary, then in the lower right click on retirement plan contribution limits. It explains and gives gives numbers.

To see your contributions to date click on view my history, statements and forms, then click on my contributions, then open each account Money purchase plan and retirement savings plan. Depending on your age as mentioned in other post what your limits are.

Flyinhigh

Reference the Pilot Benefit Book Page R-85. Catch-up contributions are excluded from the limit. So the $5,500 doesn"t count towards the cap. If you hit the cap by maxing out your contributions to the Pilot Retirement Savings Plan (PRSP), employer match, after tax Optional Savings Plan (OSP), Pilot Money Purchase Plan, and Sick Bank contibutions, the excess will be returned to you as ordinary income subject to Medicare, State and Federal Taxes, ALPA Dues, etc.