TonyC

If this is the first time you've heard that, you haven't been paying attention. Two themes have underpinned our strategies and goals for retirement and insurance. First, do not create incentives to stay. Giving pilots additional credit for longevity beyond 25 years would be an incentive for pilots to stay beyond 25 years. Therefore, we do not give pilots additional credit for longevity beyond 25 years. Second, remove impediments to leaving at the Normal Retirement Age. Impediments, by definition, discourage people from retiring. Therefore, we want to remove them.

This is one philosophy where Stratton actually agreed with Webb, as Stratton was Webb's Retirement and Insurance Committee Chairman.




I think we ALL should be for that, on both points. That's why I get real concerned when my own Block Rep started explaining why one plan for some and another plan for others might be a good thing.



That was a solution for the problem then, with a commitment from The Company to address the problem for the next wave of retirees later. As we have experienced, we don't like that solution because it doesn't require the pilot to retire in order to receive the benefit. I consider that a blessing, an opportunity to "do over". It shouldn't be a windfall to a pilot who doesn't need it; it should be a bridge to Medicare for those pilots who chose to go down that road.

I recall a phrase used years ago about bargaining and emotions:

Don't get your mad before your money.

For 6 years now, the MAD has driven people to do everything opposite of Webb. Good judgment has taken a back seat to anger. From office furniture to meeting times to personnel to negotiating strategies, if Webb did it one way, we've insisted on doing it another. The overarching theme was to reject everything that Webb embraced, even if it made no sense. The emotional satisfaction of rejecting Webb trumped any rational evaluation of strategies adopted or employed.

Look where that's gotten us.


It's time to bring reason back into the equation.

The pilots who have turned 53 after January 1, 2007, have a right to be upset. They can be upset at the leadership that negotiated the 2011 CBA that left them behind, and at the membership that ratified it.






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Busboy

As Tony said, it depends. But, I can tell you that for my wife and I to stay on the FDX (buy up)plan, will cost over $15,000/yr.

Bill Kilgore

Moved up 163 numbers but my system-wide seniority actually decreased fractionally.

Move along nothing to see here . . .

CAVOK84

Thanks. I figured it was hidden there somewhere.

av8npnut

As a baseball fan I love statistics. In that vein, I have kept a spreadsheet tracking various aspects of my career at FedEx. One of the spreadsheets that I have utilized is my seniority progression with the company.I was hired in February 2001 near the front of the postal hiring at the age of 32. I was the caboose of the class, and my seniority number was 3827. Since that time (almost 14.5 years), I have moved up 1,501 seniority numbers to 2326 and am at 56%. What I find fascinating is the growth followed by a steady contraction of pilots over those 14.5 years.I take three seniority snapshots during the year, one in February (my hire month), one in June (before the seniority numbers are recomputed), and one in July (after the new seniority numbers are published). As a new hire in February 2001, we had 3843 pilots at the end of the month. Our numbers swelled until 2007. In that year we had a whopping 4901 pilots on the seniority list in June (before the numbers were recomputed), and 4761 after the numbers were recomputed in July. Since 2007, we have steadily declined in numbers. At 4171 total pilots in July 2015, we have shrunk to the lowest number of pilots on the property since July 2001 when we had 4058 pilots on the seniority list. In July 2004, we had 4187 pilots on the property, so we are back to the manning levels we had eleven years ago. What does this all mean? I don’t really know as a lot has changed over that time. We had two 3-seat airframes, and now we have all 2-seat aircraft. The mandatory retirement age also changed in December 2007. However, in the early 2000’s I often heard that FedEx needed about 4500 pilots to operate our global system. Seems to me that the manning we have now is significantly short of that number, especially with all the training going on. Whenever there is a hiccup in the system, manning seems to be an issue.Food for thought.
Don

MD11Fr8Dog

Yea, I seem to remember my original seniority was about 3300+or- in early 96

MD11Fr8Dog

You mean something like a kind of seniority crystal ball?




FedEx ALPA MEC Home Page

Edit: I see you already got the answer

Flying Boxes

Busboy,
I think negotiating incentives to retire is wrong and create dissent within the union. The union creates tribes with in the membership and that is not in our collective best interest. It also sets the tone of "get out!", greedy geezer and other negative terms. I do look forward to moving up the seniority ladder, but I am also not upset with others being senior to me. I would rather they retire because "it's time" rather than because they are pressured. Enhancing everyone's retirement is better!

I like the $0.50/CH VEBA. But those over 53 benefit for life from everyone's effort, without paying much for it. Then turn around and get the $25K HRA! Leaves me feeling like I was abused! If the goal is reduce retiree healthcare, codify it for everyone!

TonyC,
If someone is using Tricare for Life, do they get VEBA money????

Busboy

The CBA basic normal retirement date language has not changed , since the FPA contract. Current language:

28.B.1 The terms and conditions of the FedEx Corporation Employees' Pension Plan (“Pension Plan”) as affect pilots, the Federal Express Corporation Non-Qualified Pension Plan for Pilots (“Compensation Limit Plan”), and the Federal Express Corporation Non-Qualified Section 415 Excess Pension Plan for Pilots (“415 Limit Plan”) shall be as provided in the Pension Plan, the Compensation Limit Plan, the 415 Limit Plan and the PBB except as provided in this Agreement.

28.B.2:2. A pilot's retirement benefit at his normal retirement date (the “Pension Plan Formula”) shall be equal to the greatest of...:

Purple highlights indicate exact FPA language. (Except, the PBB used to be the Pilot YEB)

You won't find a specific normal retirement age in the CBA. It's in the PBB, and that also has not changed.


Is the $25K, an incentive to retire or partial impediment relief?

If the company paid retiree healthcare AND gave us $25K if we retired... That would be an incentive to retire.

Currently, if you retire at age 60, you would still have to pay $75,000+/- out of pocket, for FDX healthcare to cover yourself and spouse until reaching 65 and medicare. That is an impediment to retire.

We need to keep, or increase, the $25K HRA, and prorate it based on retirement age.

TonyC

We all stood to benefit from the other VEBA, too. For every pilot who looked over the ledge to retirement, saw the high costs of post-retirement health care insurance, and took the leap because he had $25,000 to offset those costs, it was a direct benefit. For every pilot junior to him, it was an indirect benefit. If you want to move up in seniority (oh, yeah, that's what this thread was about), somebody above you has to die, get fired, or retire. I prefer the last choice.


You may recall that there was a push to change the regulated change. Airline Pilots Against Age Discrimination (APAAD) was but one of several organizations determined to remove the limitation. Of course, ICAO was way ahead of the FAA in considering the change.

Yes, the potential of change was known, and it seemed to be getting closer to possible if not probable.

But ... The Regulated Age and Retirement Age are two different things. To wit ...


Changing the Regulated Age only affected who could sit in a window seat. It did not change the Retirement Age, as we had plenty of Flight Engineers over the Regulated Age both before and after the change. The two only became essentially equivalent when we got rid of the last B-727.

You must remember that this benefit, the pre-medicare HRA account, was structured in the form of a VEBA -- Voluntary Employee Beneficiary Association. It is a form of a trust, and has specific requirements that must be met, and then the employer's contributions to the VEBA are tax-deductible.

One of the requirements of the VEBA is that it must be nondiscriminatory in the payment of its benefits (unless it was established pursuant to a collective bargaining agreement). Now, I don't know the nuances of age discrimination or any other discrimination as it might apply to this provision, but I'm betting that ALPA National's top experts in this area do. Could they have included a provision in the CBA to require the pilot to actually retire in order to collect this benefit? I don't know. Was the sentence in the CBA stipulating that everyone got it, regardless of their employment status, a provision that allowed such discrimination, or simply an affirmation that such discrimination would not be permitted by law? Again, I don't know.

What I DO know is that I'm glad we got a trial run with this experiment. I'm glad the benefit was there for the people who chose to take advantage of it and retire. I'm glad for the seniority numbers that I've moved up over these years due to that obstacle to retirement being removed.

But I'm also glad we're not stuck with this particular solution, because it has problems that we did not forsee, namely that people take it and STAY. If they're staying, they don't need it, and I'd rather the money be spread around to benefits we can all appreciate.


We were all aware that the Regulated Age could change, and the Retirement & Insurance Committee Chairman bragged numerous times about how sly we were at making sure the "Normal Retirement Age" was protected in the CBA language. According to him, The Company had no suspicions of a potential change to the law, and no suspicions about why we selected certain language to protect our Normal Retirement at Age 60. We "pulled one over" on The Company.

So, yes, "we" knew it might be coming.

As was explained at the time of the CBA ratification process, the date was chosen to include all the pilots who might possibly retire during the expected life of that CBA. Both parties agreed to address the problem for the next "wave" of retirees during the next Section 6 negotiations. This presumably acknowledged there might be a better way next time, or at least that it wasn't prudent to put enough money in a VEBA at that time for every pilot on the property, some not planning to retire for over 20 years.

You may not appreciate the nuance, and perhaps don't care, but I see a distinction between creating incentives and removing disincentives. The Post-Retirement (Pre-Medicare) Health Care VEBA was not intended to be an incentive to retire. It was intended to remove a disincentive to retire. An incentive to retire would be something a pilot might receive when he retires, but would NOT receive if he does NOT retire. It's paying people to retire.

The Pre-Medicare VEBA was intended to offset the costs that a retiree would incur, not to enrich him as a reward for retiring. It was meant to help him break even so he wouldn't be force to delay his retirement.

I agree with your point that negotiating incentives to retire would create dissent, and that's why that very principle has been half of the guiding principle used by the MEC for quite some time. We do not create incentives to retire. Give these guys $5 to retire, and the next batch will want $6, and pretty soon it's up to $10, and suddenly the junior guys gain the majority vote and it's down to $0 ... until they're senior. We don't need seniority (or age) wars.

The other half of the equation is to remove impediments to retirement. While we don't want to reward those who choose to retire, we don't want to punish them either. If there's something standing in the way of being able to retire and enjoy a comfortable living with the replacement income of a retirement plan, then we all benefit by removing that obstacle. In 2006, the biggest obstacle to retirement was the cost of health care insurance. We made a first attempt to remove that obstacle. It wasn't perfect, so we get to try again, and make it better.


How would you go about codifying it today, for everyone, forever, in light of the fact that the healthcare industry has undergone radical changes over the past few years, and will likely undergo more changes in the near future? Do you have a plan that will adapt to all scenarios imaginable?

I don't like that the last CBA failed to address this problem so we had pilots retire without the benefit. But I like the fact that we can tailor a solution for the present situation and the foreseeable future to cover the pilots who will retire under the life of the next CBA. It's not perfect, but I haven't heard of a perfect plan. It's easy to say, "Cover everybody." I agree, everybody needs to be covered, when their time comes. But how do you put that in IRS language, or CBA language, or even layman language?


(And as a small point of order, nobody has paid anything directly for the Post-Medicare VEBA. The $0.50/CH was negotiated before the pay rates were negotiated. The Company contributes that amount to the VEBA instead of paying us.)


Which VEBA?

I think you know the answer.

Do you think our benefits should be different if we have non-FedEx sources to fall back on (military retiree, spouse's plan, large inheritance from rich uncle, etc.)?






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