Scoop

Denny,

Get ready for a proposal to reduce the 16% to fund some kind of retirement vehicle.

Just a hunch, and I hope I am wrong.

Let's see, trade actual $$$ in our name today for a promise of future payments.

What could possibly go wrong?

I support our MEC and want them to succeed but hope they don't go down this road.


Scoop

sailingfun

Maybe we should target the 16% DC fund to try and provide everyone a equal retirement!

Denny Crane

Scoop,

Where are you hearing this? I peruse pretty much all the stuff the Union puts out and don’t remember reading anything close to sacrificing a DC percentage. It’s always been “in addition to” type language such as at FedEx.

I don’t think a “new DB” is the way to go either. Thought I remember reading something awhile ago that there are ramifications to PBGC benefits from the DB we already lost if a secondary company DB goes the way of the dodo.

There has just been waaaaaay too much negativity from younger guys who aren’t even willing to consider some avenue to increase retirement benefits other than an increase in DC. My opinion, they need to expand their time horizon and consider what has happened in the past. “Those who do not learn from history are doomed to repeat it.” I don’t remember who said it but it is very apropos for any generation.

I really think we need to give Dalpa the opportunity to consider other means of funding our retirement in addition to the DC. I think diversity of income in retirement is a good thing...

Denny

Planetrain

And thereby reduce profit sharing? Getting popcorn out!!!!

Denny Crane

First of all, I’m against lowering the DC percentage. With that said, you do realize that DC is NOT subject to profit sharing in any way, shape or form don’t you?

Denny

Planetrain

Just re-checked my pay stub from profit sharing day. DC is still there from the company. Did they skip you?
(PWA 3.I.)

If the DC is lowered to say 10%, profit sharing DC would be reduced by about 37%.

Denny Crane

No, it wouldn’t. DC is not subject to profit sharing. We do not earn profit sharing on the 16% DC. Do you think you get profit sharing on DPSP-CSH listed on your paycheck? (If you reach the 415c limitand get your DC excess in straight pay) The answer is no, you don’t. That’s one reason why it’s listed separately.

That DC contribution on your PS check is the company contribution to your DC based on 16 percent of your PS amount. Again, the company DC contribution is not subject to PS.

Denny

Planetrain

We DO earn retirement on profit sharing. If ALPA lowers the % of DC to fund a DB plan, when profit sharing comes, less will be paid out in DC dollars.

Yes, I realize the semantics of what you are saying: "the company DC contribution is not subject to PS." In other words, you are correct in that the "16"% integer value does not fluctuate up or down with different PTIX. And you are correct that you don't add up all your DC for the previous year and then get profit sharing from that. Your statement hinges on how you are using the word "subject".

You are skipping over the fact that if the DC % is lowered, the retirement dollars that you make off profit sharing is cut. Profit sharing is pensionable. That is not some insignificant amount of money. It is also money that I did not make directly through wages like other DC dollars, it is compensation from the company's profitability. It is also a clean and unchanged benefit that was fought for with tremendous effort. (ie MIP exclusion)

Let me give an example.

If Profit sharing for a pilot is $10,000; an additional $1,600 would be paid out as DPSP. (16% DC)

If the DC % is dropped to 10%, in the above example only $1,000 would be paid as DPSP. $600/$1600 is -37.5%.

If strat planning thinks the pilot group would let this go unnoticed, they would be making the same mistake from TA1.

(None of this has happened, I'm merely responding to the idea floated from Scoop above. Perhaps ALPA would have some sort of mechanism to compensate for this loss).

TED74

... because 10 is 37% lower than 16, no surprise.

And if DC were lowered like that there would be pitchforks on Virginia Ave. I don't see DC decreasing any time soon - maybe ever - until or unless the structure of 401ks and their deductibility changes.

Scoop

Denny,

As I said - just a hunch. I was “accused” of trying to “protect” my 401k at the expense of a retirement vehicle on Chit Chat.

I wasn’t discussing the 401K so it surprised me but the more I thought about it it made sense.

It cracks me up, we all pretty much want the same thing, a better QOL and more money. But hey, if you want more 401K money in your name you are a bad evil person. If you want your money in the form of a DB your a noble fighter for justice.

Like I said, just a hunch. I think we can make great gains in retirement if we do it via unifying the Pilot group. If we devolve into a us vs. them, old vs young we are hosed.

Scoop