Not yet they haven't. Partly because most don't know how a conversion would only yield 10-20 cents on the dollar.

An ethical MEC will not go down this road of screwing the middle 70-85%

 

No Concessions Period. Consider the latest press release below:

"FedEx Corp. reported the following consolidated results for the second quarter:

Revenue of $11.4 billion, up 3% from $11.1 billion the previous year
Operating income of $827 million, up 15% from $718 million last year
Operating margin of 7.3%, up from 6.5% the previous year
Net income of $500 million, up 14% from last year's $438 million"

This company makes a ton of money...always has as far back as I remember. We cannot allow ANY concessions in this contract. Not only is it unwarranted, WE HAVE CONTRIBUTED to the success of the corporation in immeasurable ways. While some in mgt would love to stick it to the new guys then ride off into the sunset streaming a golden parachute only WE can say no. I will vote no to ANY attempt to screw a pilot on the property now or a kid that is building time with dreams of flying here. We simply can't allow this. I don't give a hoot what "Legacy" carriers have or do. It's apples to oranges.

 

teNot to worry we will never see a "conversion" of our current A Fund Pension. The Company loves having the plan in place and it will always stay that way as it remains a good place to stash money for profitable company's. So a viable pension fund is a good thing, what is not liked by the Company is continued accrual of new plan members as this yields balance sheet problems in the eye of the investment world.

What could happen is a change via some new options. In no way would I expect a sell out of new hires, but the vehicle used to get a retirement pay out that is equal to our current plan could look different for them and I am sure many on the property would love to have an option to balance their exposure to so much DB money in exchange for more DC money going forward. Make no mistake, a retirement plan weighted more or all on DC has issues like Albie talked about but it also can be a more costly option for the Company as they have to actually pay that money now but once that money is out the door it is off the books.

Flexibility and the support of our R and I experts is critical in covering our six and the six of any new pilots so that we do not create a disparate benefit.

 

I would suggest that all read the book Retirement Heist. I can guarantee you two things as you read it. You will say to yourself "This can't be legal?". You will also get angry.

This link is a short YouTube review of the book.

Politics Book Review: Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of Am... - YouTube

 

Concur on all counts. However, "B Plan" is not equal to "B scale".

If new hires got 100% match in a B plan, that would certainly NOT be a B scale. If we could freeze our pension and get a 100% B plan (better defined as defined contribution plan), that would be huge.

On the other hand, giving up a pension for the existing 7 % defined contribution would be a loser.

So--is there a number that actually makes a defined contribution plan worth what our current defined benefit (A plan, or pension) is worth? I dunno.

But here is what we agree on--new hires do not need to placed on a B SCALE. B SCALE is a no go. But don't confuse your Bs…..

Fact is, a 30 something hired in 2016 might prefer a larger DC plan over our current DB plan for portability and risk management. It just comes down to a math problem if we are in fact offered such a plan.

Good news is everyone has a vote. If its not a good plan, it shouldn't pass. Reviewing my own finances, with a military pension already secure and some good earning years behind me, a rebalance might help my family. Your situation may be different.

But again--nobody gets left behind. That will haunt us for years if that occurs.

 

There is a debate for sure.

But you also need to be aware of relatively recent legislation that places new restrictions on management in this area. It's no accident laws were changed after PBGC liabilities went thru the roof. I wish tens of thousands didn't have to feel needless pain before changes were made.

 

This may be good for those hired 2001-2005 with years of widebody CA passover pay under their belt. At conversion your high five up to that date will probably yield a good conversion lump sum and you're still young enough to work a nice B fund.

How many of us fall into that demographic?

 

For those interested go to
Inflation Calculator: Bureau of Labor Statistics
Type in $120K and use 1994 as your base year. The result is $189k
$110k = $173k or maybe use $100k = $158k
I'm using different retirement numbers for that year because I am unsure of the exact A plan limit we had in 1994 but I'm pretty sure it wasn't less than $200k for your high 5. The point is this is an issue for even the youngest pilot here at FedEx. The A Plan must be fixed or when you younger guys retire it will be worth next to nothing. The only enhancement we have had to our retirement since 1994 is a B Fund. Not sure that makes up for the above erosion of our A Fund purchasing power. Will the retirement math gurus please chime in.

 

There will never be a lump sum conversion. It would be a freeze and most likely only by your choice if you wanted a new dc number going forward. There will never be enough money on the table for that to occur.

 

Sirs:

The FedEx defined benefit plan is just a bit behind when compared to the current IRS limits. When our $260,000 x 2% x 25 years was established for a cap of $130,000 annually over 20 years ago, the amount was probably appropriate and valid. As you can see below, the 415 plan cap has increased just a little. If our MEC and the NC aren’t targeting substantial increases in our retirement plans, I doubt there’s little chance a T/A will be ratified. I’m not sure about [your] thoughts, but I think a $70,000 retirement pay raise is deserved and appropriate! Increase the 2% multiple to 3% and we’re essentially there.

From the IRS code: “Effective Jan. 1, 2013, the limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $200,000 to $205,000.”

It’s time for a LOT of CBA improvements. Scheduling (accepted fares, real time trip trades, deviation policy), health care, scope, pay, retirement … are just a few. We also need to lose the reference to "accepted practice", the Flight Crew Handbook, and "that's the way we've always done it". The CBA is the rule book, and I could care less how things were done in 1994.

Very Respectfully,
Nakazawa