FDX- Council 7 Message 10/6/14
 

Q: What do PBS and an "A" Plan Freeze have in Common?
A: Management Wants Both!

As you must certainly recall, management recently tried to explain that PBS (italicized) was good for you. (italicized) Just trust us, they said, you're gonna love it! Rumors of signing bonuses tied to PBS abounded, and you rightly laughed them off because you understood that whatever amount you might get up front, that and more would be extracted from your hides later.

In short, you fully understood that management didn't propose PBS because it was good for you. Rather, you were aware that they desperately wanted it because it was good for them.

Now, in a way similar to their having floated those PBS trial balloons into our work environment some time back, they apparently have done the same with regard to their latest retirement proposal. More specifically, the word is out that the seek to freeze your "A" plan. (italicized)Don't worry, they say, we will sweeten the "B" plan. (italicized) This is gonna be good for you!

Naturally enough, the two of us have begun to receive questions on the topic. You, our constituents, should know where we stand with regard to freezing your "A" plan. The subject is a bit esoteric and we will delve into the intricacies later, but for now we will cut to the chase...

No.

We won't accept any type of freeze to our "A" plan. Not for senior pilots. Not for junior pilots. Not for pilots in between, and not even for pilots yet to be hired. Period. We know that like PBS, whatever bait management might dangle now will come out of your hides later.

DR
Block 1 Representative
LEC 7 Chairman

SD
Block 8 Representative
LEC 7 Secretary Treasurer


my addition to the message;
The Block 4 Representative
LEC 7 Vice Chairman's name is absent from this message.

Normally when I come to this forum, I do so as "comic relief" for whatever the the topic is but today is different.

I have been informed by a very knowledgable and reliable source that it was "our" Negotiating Chairman who proposed the freezing of our "A" plan while increasing the "B" plan to the Company's side of the table.

I'm sure that he would not have done so on his own accord and that at least two thirds of our MEC Officers had to have had backed this, along with some of the Block Representatives.

Not two weeks ago, we had about 19% of our brothers and sisters show up in Memphis, Los Angeles and Anchorage, most on their days off, to show their support for this pilot group and MEC!

I think our MEC needs to re-think this.

This (freezing of the "A" plan) will not effect those with over 25 years of service and if you're a new hire, it might even be a good thing but for the vast majority of us in the middle, it will be a huge loss!

I highly suggest that if you are in Representative Blocks; 4,5,6,11,14 and 100 you contact your Representative and ask where he stands on this issue.

Sincerely,
Robert Cecchi

Let me see if I got this straight. Fedex wants labor concessions, pbs and frozen pension, just like most of the bankrupt pax carriers got, without going into bankruptcy. But at the same time they want to spend $2 billion buying back their own stock. Does that mean fedex wants us to fund their stock buy back. Sign me up for some more of that!
If it's our own negotiating committee proposing the frozen A plan, it sounds like Stockholm syndrome.

Moving from an A plan to a B plan isn't necessarily concessionary. It depends on the details.

An A plan has a cash value, including the risk, and a B fund has a cash value, including the risk. These can be calculated and compared.

As FBH points out, your individual situation may be very different in terms of time accrued towards the current A fund plan vs. time available to build value in some hypothetical improved B fund. Your taste for being personally responsible for the investment risk of a B fund vs. the company being responsible may be different than the next person's.

Don't write it off in some knee-jerk reaction. Let's see the details with some objective and clear analysis.

All that said, a change of this magnitude would require significant improvements to the expected value in retirement.

JP, is that you? :D

In the past Fedex floated a rebalance option. Problem was experts said it was about 25 cents on the dollar. It was not considered. The company is continuing to negotiate in bad faith. How we react to that is entirely up to each of us.

You guys shouldn't entertain any freeze. It's in the best interest of the company, not your crew force. Every time you negotiate they will take something away until it is all but gone and the guys behind will have to renegotiate to get them back. Rule number one, anything a company wants is never good for its crew force. Trust me

Brilliant!!:rolleyes:

I'm not suggesting that 25¢ on the dollar is acceptable, but even that is far more valuable to the surviving dependents of a guy who drops dead before he retires.

An A plan is a promise. A B plan is money.

Think seriously about the tradeoffs.

It is Kabuki theater time, the company has no incentive to settle and the MEC has to play its part and entertain all offers. If I were representing a block that had mostly guys with 25 years at the company I would vote yes on a pension freeze, it is in their interest. But I would hope it would not get past the whole MEC. Although I would agree with Doogs and wouldnt object to a voluntary choice on freeze or 25% B fund. It is definitely hard to criticise a block rep for his vote without seeing the offer.

I did not volunteer for vacation buy back, although 84 hours just about equals a semester of tuition and would make a nice start on high 5. It will be interesting to see who does.

Actually overheard someone crowing about selling all of their vacation back to the company....at the informational picketing event.
It's hard to win the fight when the enemy is in your own camp.

Some version of A-plan freeze and B-plan increase, switch to a cash balance plan, or some such, MIGHT be ok if each INDIVIDUAL pilot had a choice whether to accept a proposed change or keep his plan as is. I would definitely oppose any plan change that was imposed across the board. We should not even discuss any sort of B-scale anything. That's a slippery road we don't want to go down.

DR represents a block just like you describe and he says NO. Voting to help a selfish few while hoping the rest of the MEC saves the farm is not the right way to go, IMHO

I'm enjoying my vacation too.

You can't reason with idiots.

Like I said we havent seen the offer I cant criticize. If you know the details I'll be glad to give you my opinion. I saw the offer when my block rep voted to send me on a 3 month STV on LOA 1.

Alright. That ugly incident is why I will never support any of those block reps ever again. DO NOT pass along a POS TA or LOA!!!!

+1!!

Wake Up Gentleman!

Much is within our control.

Fly Professionally - Fly Safely - Fly Well Rested

In Unity,

DLax

Going out on a limb here-

if "we" had proposed freezing the A plan, company would be knocking down the door to get a TA to a vote

Some of you need to get a grip.

From the VC today:

The more I hear about DR, the more I like him ...


:D

Sorry Doogs I'm calling BS on that one, you guys have both an A and B plan. Why give up any of it. If anything, just improve the B plan, you should be taking any concessions of any form especially with a company that's posting hughe profits, stock at record high and buying back stocks. If you take concessions when they're up, what are you going to give if they're down

[QUOTE=frozenboxhauler;1741501]

I have been informed by a very knowledgable and reliable source that it was "our" Negotiating Chairman who proposed the freezing of our "A" plan while increasing the "B" plan to the Company's side of the table.

Looks like your unnamed source was neither knowledgable nor reliable as numerous Union sources have dispelled this ugly rumor and attack on our unity.

From what I have heard from several block reps is that it is true, and that they had a conference call to vote on a consensus. Once they had arrived at the consensus, they put out the comm. The vote was closer than you would think.

A call to your rep will confirm this (unless your rep was one of those in favor of the changes).

Are you saying frozenboxhauler is a NM? You are more clueless than I originally thought!

I guess you didn't read where I said to think seriously about it.

There is a point where an improved B plan outweighs our current A plan. It doesn't sound like an offer is on the table (it probably isn't even likely) but to suggest that there is no possibility of a B plan being an improvement over our current system is obtuse.

I e-mailed mine, Block 4, the guy who could not bring himself to sign the above letter from Council 7. Unity by example. :rolleyes:

He also couldn't bring himself to answer my questions via e-mail, so I had to call him. He thinks there might be a way to freeze the A-plan and replace it with a better retirement vehicle, so he couldn't say "No" to any freeze of the A-plan.

Our Block Reps don't need to be R&I experts, but anybody representing us should at least know that you cannot freeze our A-plan and replace it's value in any combination of B-plan vehicles.

If the Company's proposal was to lower our pay rates by 50%, I think he would have to contemplate the repercussions before saying No. The Company must be enjoying this game, like a cat playing with a dying mouse.






.

Are you saying we are so screwed?:eek:

This could get strung out for awhile, to both the pilots and companies detriment, but nobody is going to vote for a crappy TA.

The message from Reps varies from one who says this company offer was a surprise to others that acknowledge it had been discussed among themselves prior to the company offer. This Rep says he is interested in the concept while an MEC COMM today says this A Plan freeze idea is unacceptable. The MEC is becoming dysfunctional. And where are our regular updates from the NC? Have they been muzzled?

How would you characterize the last few TA's?

I would hope you can guarantee Congress will not reduce the amount that can be put into it.

I suggest you read the book Retirement Heist by Ellen Schultz. Retirement Heist - Pension Fraud Book - Ellen Schultz Nothing offered by corporations over the past 30 years have good for the employees. Why don't you just offer to take a 50% pay cut. One could argue that that is not concessionary, depending on the details.:rolleyes:

Sure as one could argue what happened at Delta, USAir, and United were just good intentions gone bad. There are advantages and disadvantages to everything, and nothing is beyond big government yet we continue to support bigger and bigger government.

I have said this many times on this forum.

For those that want to freeze or trade our Defined Benefit Plan- google immediate annuity. Click on any of the results. Enter how much you'd like to receive in retirement, and your age.

The result will be a 7 figure number ~ $1.7M depending on your age.

How many of you have a 401k portfolio of that magnitude?
You would need well north of 25% in the B fund for more than 20 years to achieve the NPV required to replace that annuitized income.

And that assumes constant growth- averaging 7-8%, for over 20 years. No prolonged bear markets- no years of measly growth. How many of you have avoided all market risk- every year, for 20 years. Maybe if you were in cash, but then you didn't have the 7-8% compounding required- so you'd need even more contribution if you were risk averse.

An all B fund retirement puts all the market risk, systemic risk, and financial management risk on the pilot.

I'm sure you've heard the old saying- "never fly with doctors or invest with pilots"

Great post, could not have been explained any better

Of course most new hires could expect a 20 plus year career, and if they die on their 66th Birthday (or the company does) the wife would have a considerable chunk of change to celebrate with.

This place went from the premiere place to work to the one of the worst inside of 3 years. I would steer anyone I call a friend away from here. Mismanagement on an epic scale. The climate is toxic. It's beyond standard negotiation crunch time BS. I would leave in a heartbeat if I had under 5 years here.

MEC members are seldom 100% in agreement. That's just how it works. It's only dysfunctional when one, or more, reps think their opinion should be weighted more than the others and they hold up meetings to explain that fact. You feeling me TonyC?

The NC works for the MEC. Until the MEC decides which direction to go the NC might be perceived as leading their decision with too much public comment. We should be hearing more comm from Block reps ASAP!

Now back to some facts, of which I have next to none. Just possible scenarios. A switch to a defined contribution benefit only plan is most beneficial for those who are most senior and those hired at a young age. Those hired in their 40's could get the short end of the stick. This depends on the details of the proposal and how close you are to FedEx retirement at this moment in time.

Since the likelihood of the company giving us 100 cents on the dollar during a transition is very low, you should understand where the different voting blocks are coming from.

The most senior are already fully vested and will be taken care of. Basically no change for them unless there is a higher multiplier offered to THEM as an incentive to change the plan. Remember VEBA? Yeah, me too. They will be able to keep what they have already earned which is fair. But offering them a commission to sell the rest of us out is unsat.

In one scenario (as we don't have details on this) - Those having not earned a full A plan benefit would get frozen with no further A plan accrual. Will they have enough time to make up the difference? Good question. If you are young enough you think the risk of the A plan remaining intact over 30 years is not worth the hefty benefit. The young would rather have LESS benefit as long as ALL of it is in a B plan that is all theirs. One's attitude depends mostly on how old you were when hired and how old you are now. In your 20's or early 30's and you're more likely to meet or exceed the old plan's benefits. In your 40's, maybe not. I'm guessing not.

If you know someone who retired from active duty on the MEC, I recommend contacting them today.

When you hear opinions on the subject consider the speaker's age at hire and how many years they've been here. Those determine how much skin they have in the changing retirement plan game and how much a change would benefit them.

No, I'm not.

Why don't you spell it out?






.

Started my 20th year this week. It's been great, but have to agree.