Retirement Video
 

Some of the best work I have seen in my career. We have a very talented and dedicated team working nonstop to provide the Delta pilots to give direction on a “pilot driven” C2019.

Where was ALPA in 2006?:(

Proactively Bending Over.:rolleyes:

Good educational video. Thanks to the producers.

Good video, but ALPA is going to have to do one HECK of a job to sell me on restoring a defined benefit. The logic of bringing back a defined benefit, especially with our history, along with typical economic accepted business practices with respect to retirement options seems futile. It makes me wonder about all of the negotiating effort ALPA is going to have to spend trying to get a DB. What contract capital/sacrifice are we going to have to give to get said DB? There are dozens of things in terms of quality of life type stuff we could use. I'm all ears, and I'll keep an open mind, but this seems like a tough sell.

If we couldn't get tax free VEBA, because too many pilots were concerned about what happens to their money in the rare instance if they die, their spouse dies, and their sub-26 year old kids die before they exhaust their small account, why would ANY one think a much larger DB plan has a shot, when it carries so much higher a risk of not exahusting your contributions before an untimely death??? A DB is DOA.

There is zero chance a DB plan gets put before this pilot group. It would be a waste of time and resources, as no one wants others controlling their financial future.

Remember: no one cares more about you than you. Make your own fate—take care of your own retirement!


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Amen, that ship has sailed. Let it be.

The only thing that will probably ever change this sentiment will be if/when a true socialist/democrat party were to take over and the “asset tax” starts to rear its head again (most forgot that during Clinton’s first term it was seriously proposed to help pay for people’s retirement who hadn’t had the opportunity to save) then everyone will be questioning why we allowed the 401Ks to get so large.

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.

However, if you were smart enough to stay at a Holiday Inn Express, you would have been able to deliver a flawless R&I presentation. 😁

I'm 61, none of us dumb old guys want a DB. Stop the BS that we as a group want it. Been there, done that.

If that is the case, then we shouldn't be relying on in it for retirement. We are a huge labor force that has a lot of money to invest. That will attract tons of financial experts trying to sell us confusing products that look great now but could be worth nothing in 15 years after the next financial crash/bankruptcy that none of the "experts" ever thought could happen. If it looks too good to be true, it probably is.

Exactly! I couldn’t even get that right.🤔

I believe you. Any rational thinker would come to the same conclusion.

However, there is a very vocal subsection of your demographic that is banging the DB drum loudly. Despite a solid historical and mathematic case against the idea.

Gzsg is our new MEC strategic planner. Maybe he’ll share his opinion on the topic?

^^^^THIS^^^^

Keep it simple and start with maxing out the 415c limits with company funds. That would be a 22% DC for the 50+ crowd.

Agreed. Much better use of negotiating capital/time than pandering to a nostalgic desire for yesteryear...that was already taken away once.

Question: when you say 50+ crowd, are you referencing the $6k in catchups? My understanding was the $6k in (over 50) catchups could only come from the individual.

20% hits the $55k 415c limit, based on the $275,000 limit. If a guy wants to then use his DC CASH to buy a personal annuity, then he has that option.

Thanks for the correction. I missed the part about catch up contributions coming only from the employee.

Chris Hazleton is the Chairman and the brains. I am doing part time grunt work.

There are going to be many more videos on retirement improvement options. The Retirement and Insurance Working Group has been working on this 24/7. They have met with the United, American and FedEx pilots. Who are also working hard to make gains.

The United pilots are currently in negotiations. The American pilots begin in January.

I have no idea where we will end up, but I do think it’s criminal that management is wasting billions and billions and billions on stock buy backs. While we have pilots in their 50s with a monthly retirement benefit of $700 $1200.

That is completely unacceptable. And we have to fix that.

Our executives have killer pensions. Time for a little common sense.

The cat's out of the bag on the MIP too. That should be enough fodder to motivate for C2019!

I’ve asked our pilot BOD member repreatedly for this information.

They make what they make and that’s fine, but keeping it a secret is unacceptable. They need to own it and be proud of their compensation.

We never should have let them buy back one share of stock until these retirement shortfalls were corrected.

IMO we are not going back to the old DB plan. I always hated it from the first because I knew it could evaporate.

That being said, we must make gains.

Their heart is in the right place. Not a month goes by that they don't send me a coupon for Mighty Dog (Large).

It's pretty simple. 21 guys are on the MIP plan (management incentive program). They achieve a bonus of 100% to 200% of their salary. For non Marines, that is twice or three times their salary. It starts with the regional directors and goes on up.

We get 15% profit sharing, they get 200% their base pay. So these guys are at a lower limit pulling down 1M a year.

C2019?

From another board.. Possibly gaining tracti
 

I’m just thinking out loud now. What if there was a choice... two options.

One, an industry leading DC. Attractive to young pilots.

Two, An annuity calculated to make Deadzoners whole.

You get to pick the one that makes you happiest and leave the other one on the table. Your choice.

agreed, i think the best option going forward is combination plan. Company ensures max 401k and we get something like fedex. Since there are limitations on 401k contributions theres only so much % wise the company can contribute before having to give it in taxed cash.

If we can ensure everyone is maxed out and come up with a vehicle to ensure a simulated DB plan at retirement for say 100K a year for 10 years minimum on top of your 401k. Theres bound to be a combo method to maximize our retirement outside of just maxing out 401k.

Being a United (former L-Cal) I have no dog in your fight. I am one of the Cal dead zone guys that got hit with the DB plan freeze in 05.

Don't be so quick to rule out some kind of DB plan till you know the details.

If you think the only plan worth having is a DC plan that relies on equity market returns and your skill as an investor- you must not understand sequence of return risk or historic market return risk.

With a DC plan your retirement is subject to risks such as the lost decade of 2000 to 2010. In a DB plan that risk is taken on by the plan and the company. (If they don't go bankrupt and drop it in the PBGC lap). AA tried that and failed however.

The laws have changed recently regarding DB plan funding and accounting, lightening the load on employers and Plan funding levels. Our Cal pilots plan in 2014 was considered "at risk" by IRS and was clos to shutting down lump sums. Congress quietly re-wrote the law and majically our plan became 100% funded without any additional payments from the company.

Ideally, a combination of both type plans would IMO, serve retirees best. Think of it like an annuity some pilots get talked into buying when they retire, but without the buy in part.

You are wise to keep an eye on your RI committee as well. They are subject to a lot of pressure to do what is popular with National, for political reasons sometimes at the expense of sound financial choices.

Our RI committee got talked into permanently freezing our DB plan, and replacing it with a DC plan, (without any snap back or make up), because DB plans had a bad name at ALPA national, and "everyone was going that way". It was shallow reasoning and hurt a lot of pilots.

Point of this missive; don't be dismissive till you have all the facts. And all the facts may not reside with your R&I chairman.

You’re lucky! Last year the F/As got it changed to Meow Mix. :p

Meow mix makes me want to whizz on couches and chairs, not to mention an urge to hide in closets.:eek:

https://www.daveramsey.com/blog/retirement-crisis-annunities

Dave's not a fan

No matter how you slice it, annuities are loaded with fees. As Planetrain points out in the linked article, the expected returns are lower than an equity mutual fund. Additionally as BMEP100 points out, ALPA National or even DALPA's best interest may not serve our individual best interest. We have a responsibility to keep our eye on the R&I folks.

I applaud the efforts by our R&I team in finding enhancements to our retirement plan. The first step should be a 20% DC, so we can hit the IRS max with company funds. Subsequent steps can explore less efficient options like annuities.