Flew with a rep who is working on the retirement issues. I asked him if a DB was an option and he said no. They were looking at other vehicles to add to our retirement. We also talked about VEBA in general I am not opposed I just don’t want to be forced to put my excess DC money in there.
I am not the smartest guy on these issues, which is why I have an fianancial advisor, but the stuff ALPA is looking at seems to me to be going in the right direction. Looking at some good stuff in the insurance front too. It’s early in the process so contact your reps.

As a younger deadzoner I am not in favor of trying to resurrect the DB. I want the money in my name and not Delta’s.

I'm confused on how any DB could be beneficial to a company. Even the military is trying to get away from the traditional DB retirement model, granted they're only making progress at the speed of gov't. The video specifically said future videos would discuss "non-traditional secure, fully-funded DBs" so it's obviously on the table. Does "secure" mean not even a bankruptcy judge would be allowed to touch it? I can't see why any company would go for that when the current system also provides secondary benefits to the company's bottom line.

It’s not on the table, at least not seriously. Neither the company, nor the majority of the pilot group wants to go back to that setup.

That piece was added into the video and comm piece as a placating, feel good, pander for the chit chat/poor-me deadzoner crowd. Nothing more.

Anyone with a view of history back to 2006 acknowledges it’s a bad idea. There is no such thing as a “non-traditional, secure, fully funded DB”. Maybe they’re alluding to an annuity, but the numbers to fund that to an appreciable level would likely require a massive reallocation of retirement emphasis, such that the majority of the pilot group (and likely the company) wouldn’t be interested.

The pilot group, in general, would benefit more from increasing DC contributions to hit the IRS max’s without pilot contributions.

The only people seriously interested in this are relatively close to retirement, and unabashedly looking for a Hail Mary on the way out the door....at any possible cost. Just cruise through chit-chat land (or give it a couple more posts on this thread) and you’ll see malcontents threatening to sell scope in exchange for their “stolen retirement.” :rolleyes:

I’ll look at whatever they put out, but count me as not interested in a DB either. Put it in our names and let us manage it as we see fit.

DB: Fool us once, shame on you. Fool us twice, shame on us

The video states something to the effect that today’s DB’s are not subject to the same funding requirements as past DB’s making them safer.

What changed?

Most of those "malcontents" are responding to some junior-unhappy-new-guy who voiced his opinion of how he doesn't GAS about those of us who are funding his 401k and $5B stock buybacks with our lost retirement....

Many just threw it back in his smarmy face!:eek:

Over-reaction...sure...but def. earned!:cool:

- Max out the DC
- Max out the HSA

I believe these are the next two best steps.

My guess is they are talking about a “variable benefit” Plan, like FDX ALPA has kicked around....which from the company’s perspective is funded like a DC without market risk which could cause underfunding like a traditional DB plan.

This doesn't exist without below market returns. All of this is a waste of ALPA dues. They should focus on increasing the company contribution to the 401k and HSA.

Quick history lesson:

Interest rates weren't always so low. They been historically flatlined since just after 9/11 and through to late 2000's to try to stimulate the economy after the Great Recession. They've only recently started moving off the peg.

In 2000, if you had a 7% mortgage, you had a screaming good deal. In 2015, if your mortgage was over 3.5%, people were screaming that the housing industry would collapse.

Why does this matter? Well, defined benefit pension funds are traditionally very conservatively invested, and that meant a lot of fixed income and a lot of growth assumptions based on the interest rate. This means for every 100 basis points, you have a wild swing in the funding level.

If you looked back to the late 1990s, which was pretty much the last time interest rates were at a historical "normal" level, most DB plans were fully funded. Further, the funds themselves generated so much income, companies had zero funding requirements.

Not only that, they were actually prohibited from funding the plans to excess, because that was considered a tax dodge.

Some folks wanted to diversify the portfolio, and go to a blend of DB and DC money, but many companies balked. With the DB plans funding themselves, they had no real money requirement. DC plans, however, cost companies real money every two weeks.

Certainly the loss of asset values hurt the DB plans after 9/11, and again in 2007, but those assets eventually recovered in value. Rather, it was the actuarial liabilities that got crushed by constant low interest rates, and continue to be a burden today.

But watch the plan funding levels as interest rates rise. Another 200 basis points, and they may even be in the black.

DC money is a limited solution. Many pilots are hitting the compensation or contribution limits, and hitting them earlier in the year. That means any excess is taxed as regular income. Hey more money is good and all, but you're only getting 60 cents on the dollar when you do that.

The low interest rates really jacked retirees and those close to retirement. When the other assets collapsed in value, you suffered real losses. Moving the money to money market or other interest based funds, you got clobbered by low interest rates.

A properly funded DB plan, even a small one, would alleviate some of those issues, as you could use that income to live on, and not touch your DC money, and wait for the asset values to recover.

Problem is many parts of the economy are addicted to low interest rates, and most don't realize the damage that is done on the back end.

I was at the meeting and listened to the briefing. It was excellent and tons of work has been done on researching options.

There will be more videos and much education.

While I agee we are never going back to the DB plan we had, it is important to note there are options that are also called DB plans, which makes it confusing. I’m not going to try and explain it because I did not stay in a Holiday Inn last night and I’m not smart enough.

But it will be very clear in the upcoming info from the R&I Working Group.