Pilot7576

Bob...

I was gonna chime in to set the lad straight, but Tony C did it far better than I ever could.

Tuck

Ok now I'm getting confused. TonyC you are a widebody captain I believe - let's just say you make around $300K - pre-TA Fedex deposited 7% of $265K into your B account - that would be $18,550. That with your personal $18,000 contribution equals $36,550 - well under the IRS limit of $53,000 correct? Now fast forward to a year from now under the TA, you make say, $350K and the company deposits 8% of $265K (it'll probably go up but let's just keep it conservative for now) equals $21,200 plus your $18,000 (that'll probably go up too)=$39,200. $21,200 is more than the $18,550 so exactly are you not getting more?

Please be specific and save the sarcasm for your 11 year old or wife - I'm sure they appreciate the wit.

Albief15

Your B fund is only good for a percentage of a salary limit set by IRS.

For 2015 the cap is :

The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C) and 408(k)(6)(D)(ii) is increased from $260,000 to $265,000.

So...you get 7% x 265k or $18550.

You can also have 401ks, sick leave sell back, etc. However, the cap is:

The limitation for defined contribution plans under Section 415(c)(1)(A) is increased in 2015 from $52,000 to $53,000.

So...you are limited on the salary you use to factor the B plan contribution. You are then limited on the total amount you can save tax deferred.

So...a 18% B fund on $300k would be capped at 265k x 18% or $47,700 by the salary limit.

A 25% B fund would be $53000. 265x 25%= $66,250, so in this case your contributions would stop (unless you have cash-over-cap allowance) once you hit 53k.

DLax85

Not looking to derail an excellent (and it appears a much needed) B plan discussion...however, back on the main thread topic...

FedEx truck drivers based in Gardena threaten to strike through the holidays

About 80 Gardena-based FedEx Freight drivers refused to work Monday in the first strike against the company, protesting alleged illegal union-busting activities that prompted an unfair labor practices action.

More worker resistance is planned at facilities nationwide as the holiday shopping season approaches, strikers said, and Teamsters Joint Council 42 is supporting the actions.

Off-duty workers and Teamsters are expected to hand out informational union fliers at many facilities Tuesday.

The Gardena freight facility is the company's primary hub for the South Bay and a major regional shipping center.

Workers, complaining about their pension and benefits packages, say they want a voice at the bargaining table, but their managers won't let them organize.

"The workers have been trying to unionize across the country for quite some time," Randy Korgan, a Teamsters organizer, said in a written statement. "FedEx has done everything under the books to oppose workers' right to organize.

In some areas, workers have won union elections but the company has refused to bargain."

Company managers hold meetings about the disadvantages of labor unions, and increase scrutiny on workers who want to unionize, workers said.

Drivers filed an unfair labor practices charge against the corporation with the National Labor Relations Board.

They accuse FedEx of violating the National Labor Relations Act, which "forbids employers from interfering with, restraining or coercing employees in the exercise of rights relating to organizing, forming, joining or assisting a labor organization for collective bargaining purposes," according to the National Labor Relations Board's website.

But company officials issued a statement Monday saying that only a "small handful of our employees in Gardena are involved," and laying blame for the action on the Teamsters.

"These outsiders (Teamsters union organizers) have resorted to intimidating and coercive conduct against FedEx Freight employees attempting to exercise their legal right to attend work and to decide for themselves whether they wish to be represented by a union," the statement said.

FedEx Freight is considering taking legal action in response to the strike, which it called a "coercive and potentially illegal activity."

Facebook pages have been created both for those in support and those against unionization, and, on Monday, both sides sounded off to their online followers.

"I see the teamsters are up to their same old tactics," read a Monday post on "Keep FedEx Freight Union Free" page.

"It's interesting to see these individuals interfere with our job like they're currently doing in Gardena. Take note, everyone, this is what a union brings."

Meanwhile, the pro-union page, "Bring the Teamsters to FedEx Freight," posted that employees made a "collective decision to withhold their labor on the ground of unfair labor practices" and accused the company of breaking federal law.

Workers say they have wanted to unionize for about a decade but are constantly undermined by managers who spy on them during meetings and try to intimidate them to stop.

"We've been trying to unionize and they do everything in their power to intimidate us," said Greg Barfuss, a FedEx driver.

"Just recently they called me into the office over a meeting about benefits and said I turned it into a union meeting, trying to scare me into submission so I'll be quiet."

DLax85

So isn't there really two separate/but related caps when discussing how our B fund works?

(...and a third $260K A fund cap that's in our CBA)

It appears to me that many times guys are "talking past each other" because they are actually referring to different (but related) caps

When one uses the idea of "cash over cap" I think it's important to specify which cap one is referring to

I think the main point is that with these various caps, we cannot make the general statement that an X% increase in our B fund yields and actual X% increase in retirement savings as a percentage of some pilots TOTAL earnings

As a very wise marketing manager once told me...

The BIG print giveth, and the small print taketh away

TonyC

In my post above, I spoke of the Compensation limit (the 401(a)(17) limit). Specifically, I spoke to those who have already reached that compensation limit because increasing the B-Plan percentage on DOS would not benefit them for 2015.

You are correct in observing that come 2016 that compensation tally will reset to zero, and those pilots will begin receiving the B-Plan benefit at the increased rate of 8%.

When you mentioned "the IRS limit of $53,000", you're talking about a different IRS limit, what most people call the Contribution limit, but what R1200RT (the sitting Block 4 Rep, by the way*) might call the 415(c)(1)(a) limit. Since I don't have the numbers and letters memorized, and I have to look them up every time I type them to make sure they're correct, I just prefer to use Compensation limit and Contribution limit. (And when we're talking about the A-Plan, and Defined Benefit Plan, there's another limit called the Benefit Limit.)

I think Aaron does a pretty good job of explaining.

Just one small point -- our sick leave buyback is NOT limited by the Contribution limit. It IS limited by how much we can receive pre-tax into our Defined Contribution Plan, but the excess is paid to us in cash which is then taxed at our individual rate. That is "cash over the cap" for the sick leave buyback.


Yes, and yes.


YES! It's amazing how pilots, who are experts at absolutely everything, can actually misunderstand something. I wonder if we could all benefit from an information campaign about retirement options, their pros and cons, ins and outs, before we commit to big changes to our retirement plans. Decisions based on misinformation can be disastrous.


Amen, Amen, and AMEN!









* Post from 01-31-2012:






.

FDXLAG

So the 27% B plan bump to 9% total is good for most of us however our COLA pay raises seem to be outstripping the IRS raises to our cap.

TonyC

The key to your happiness is low expectations.






.

FDXLAG

For some, luckily my low expectations appear to be industry leading.

Adlerdriver

Talk about putting lipstick on a pig!
27% of a crappy little number is just another crappy little number.