Believe it or not I’m on your side, I think ALPA is doing the right thing by looking into modern DB plans to supplement the DC cash payouts. Now I haven’t seen a slam dunk proposal that I can get fully behind but a few I would vote through if the rest of the contract was amenable. Where this discussion always gets derailed is talk about reinstating the old DB or fully funding the old plan. I agree with OFG that Delta should do it for their “family” members but I don’t think it’s likely. But we can not afford it in contract negotiations even if we just keep the current contract and add what the DZ pilots were promised. It’s not a **** you to the senior group it’s just not feasible.

I have long thought that retirement health care is a joke. We are dependent on Medicare for the bulk of our retirement? That needs to change. Health care costs are the largest unknown and easily the fastest growing expense to a retireee. Let’s get access to legit health insurance at an affordable, close to fixed cost as possible. That’s a money pool I’ll gladly pay into that will benefit everyone, but something I won’t see a dime of for many years.

Yes Scope is number one on my list, both top and bottom end, preferably in language I can even understand. Pay banding and COLA pay raises regardless of contract signings, and some more spelled out rights/rules for people in training and reroutes is necessary.

[QUOTE=Trip7;2737857]The Note were specifically earmarked for retirement:

"On September 1, 2007, 120 days after Delta exited bankruptcy, the majority of the $650 million ALPA Note proceeds (discussed above) was distributed to eligible pre-merger Delta pilots. The Claim allocation formula principally focused on non-retirement concessions; the Notes allocation formula primarily addressed retirement and other concessions, and for this reason is now briefly further discussed (the Claim and Notes allocation formulas were developed by a DAL MEC committee (the Allocation and Distribution Committee , or ADC) and approved by the DAL MEC)."

This combined with my previous post, as I read it, means a Deadzoner's PBGC benefit, plus Note, plus DC money + conservative average investment return of 5 to 6% annually should be somewhere in the ballpark of 50-60% FAE. At the time of these calculations further increases to the DC% were not accounted so that pushes the math even closer to 60% FAE.

You are not even close to reality. Keep in mind all the numbers put out back then with percentages were based off whatever FROZEN benefit a pilot had at plan termination.

Yeah. Bo is right. DZ 60% FAE was never even a remote possibility for any Deadzoners. Right now I would be extatic to achieve 40% FAE which is about double what I have right now but that’s only because of the hundreds of thousands I’ve supplemented with my other funds.

Again. As Deadzoners go, I’m one of the lucky ones.

At this point, I’m not asking for 60% FAE.

I’m not asking for anything more than what was on my last quarterly R&I statement of what I had earned to date at the time of termination. Nothing more. It was not “expected”, it was earned.

Then my union gave it away without any fight, any snap-back or even a strike vote.

Now our union appears to just want us to shut up, go away, and die.

Don’t bother even asking us how we’re feeling about this screw job.

In terms of retiree medical... that topic can go many ways due to many variables. There is the issue of retiring prior to 65 as a civilian vs those with tricare, those who want to retire early, those that lose their medical before 65, and those who have a spouse who is younger when they have to retire at 65 (or possibly sooner). The HSA is a great retirement vehicle of savings for those with time and no need to protect their spouse, meaning the spouse is older, has his/her own health insurance options at work (if employed), all prior/at age 65 Medicare.

Personally, my wife is a few months older and we have 30+ years to go- we max out the HSA, current benefits til 65, HSA is a “self-funded” retiree medical with the years “company contributions” for health tests and such. I only lay that out there to show my perspective.

Many fall into that general area. General meaning close age, to either be good to go or just have a few months of need in a high deductible comprehensive plan on the open market prior to 65. Yes, it’s expensive, but a known cost.

Now the kicker(s)...

What if I want to retire early for whatever reason? Could I keep active rates to 65 if I retire at 60? COBRA is only 12-18 months (I’d have to research, that’s just what I recall being the timeline to pay all costs).

What if I die close to retirement? Beat cancer once, hope to never battle it again, but what happens if I’m gone at 62 due to a heart attack or whatever, and my wife is still around? I honestly haven’t even researched what she would get medically.

What if age 67/70/72 becomes a reality in the next 30 years?

What if we really let scope go and it’s all drones or single pilot and I’m knocked out?

What if nothing changes and the non-covered Medicare parts are ridiculously expensive and the HSA can only pay for certain costs without penalty?

The last 3 go “out there” only to bring it all back to the fact that the HSA does nothing for those with tricare. The variables are huge on what retiree medical would need to cover on an actuarial standpoint of costing. Keeping active pilot rates through age 65, inclusive of spouse is about all I could see as a viable discussion as everything else puts up a wall within the pilot group..... outside of a VEBA... which could be great, but once again hangs out on company books. A VEBA becomes its own DB of medical, but if the company goes BK in the next few decades its a failure to learn from past mistakes at a high cost.

We battle the 415C limits (I’ve been posting 401C because I’m thinking 401K absolute max-apologies). SOME get the HSA to contribute into, all can back door Roth IRA (income issue). You max all you can, have a strong savings account, and invest on your own- retirement is a reality, but it’s a lot of taxable money in movement. Some sort of DB into an account off company books, that shelters the 16%DPSP cash could be very useful. Especially if you are doing a mega Roth 401A or other tax advantaged strategies.

Take a look at tax rates, now compare them to your income. Now look at your projected retirement assets, and look at your RMD’s at 70.5. If that number startles you with an offset of inflation, tax sheltering needs to be happening NOW. If you see how much you are paying in taxes on that “additional” 415C/DPSP cash money, you also may need to stop and think about sheltering money. That’s why and where we need the DB to fit. My money, my name, nothing on the DL balance sheet. Let’s see what can be discussed.

I have confirmed that, at this time, the modern/hybrid DB plans do require premiums paid to the PBGC. I was told that while they can be terminated, there has never been one terminated and because of the way they are funded (essentially pay period to pay period) it would be very unlikely.

I haven't yet found out yet exactly how long these types of plans have even existed. If they've only been around for 10 years, saying one has never been terminated doesn't mean squat. I do understand the reduced risk of termination because of the continual funding aspect. I'm not against it if it is funded in addition to the DC and I prefer that it not touch any of the DPSP cash that results from the DC. A wholly separate entity on top of our current reality if you will.

From my limited pool of guys I fly with, the same sentiment exists, the vast majority of the CA’s I fly are DZ’s (717CA’s hired 2000-2001) that are against any plan that has the company touching money beyond routing it. The negotiators will have to work on that after the MEC decides direction. When the math is done, a tax shelter of the DPSP excess is great- when off the company books. The trust, when it’s not at a pilot’s direction, and a newer plan idea, brings out concern. There in lies the dilemma. Nobody seems opposed to more money for retirement off company books, it’s how that money is handled in trusting that it’s a good idea.

Personally, I see it as a managed account by fiduciaries with no ties to the company. It’s extra money (DB if the company contributes), and a tax shelter. If the company isn’t going to contribute it becomes a hard sell in that there is no incentive to those who feel they can manage the money the same or better without mgmt fees. It’s easy to see someone 50+ in age (could be younger, or older) that has an earmark for the excess into an investment vehicle that doesn’t line up with a managed plan. That’s the rub, and likely where this issue really lies.

If the company is willing to contribute x% of income or x% of estimated FAE/per year into an account, off company books, to be professionally managed and overseen by the R&I committee, with excess DPSP cash as an option for the pilot (tax purposes with hypothetical growth), it can be a slam dunk. The option is the question for the MEC.

DPSP cash will be the sticking point. That may not make senses to why, but hear me out. We have over half the group with DPSP excess.. ok. ALPA told us as much. Now, how is that viewed in creation of the plan. A 350LCA may be 100% on board, but a 717CA may not be. The account plan would be massive on scale, but each pilot has a position. We have 50% of the pilots retiring in the next decade. How is that invested... Conservative? Aggressive? Layered? If it’s top heavy guys contributing DPSP over 50 is it a stable equity with lots of fixed income and everyone else is getting marginal “safe” returns? Is the account Leveraged for gains, knowing the guys retiring will be cashing out soon (there is a new condundrum- can it be leveraged?) will the account be growth and top guys can suffer in a downturn? Heck, we all should have sold in October and be buying now in theory... A solid plan must be presented to ALL pilots on how this plan will be managed, where the funding comes from, and how that impacts all pilots on an individual basis. Many will take the 30% haircut on taxes now to manage their own excess. Many would also appreciate the tax shelter and have it professionally managed for long term growth. My only hope is everyone thinks it through, runs the numbers on their own (or with their advisor), and participates in the surveys. Nobody likes a survey, but if you don’t make your thoughts known, they cannot be heard. Feel free to hate the process, but that’s reality. Nothing worse than seeing a TA taughting gains when you see them as negatives.

I’m not a DB cheerleader, though it may appear so. I view pensions as a negative as it’s all a liability based on history. I’m a huge fan of sheltering taxes now on income and company contributions while I tax shelter current assets. It’s not a problem to have future assets in my name, that I didn’t have to pay for on the front end. That’s called a benefit.

Slides 13-15 touch on it. The original slide deck had a slide that defined the "problem" they were seeking a solution for. That "problem" was DPSP Cash and they were searching for ways to do something with it specifically because it is subject to tax. It appears that after some feedback, the slides have been softened a bit and aren't as openly hostile to the DPSP Cash specifically. That's just my take on it.

I support retiree medical, and as someone with 30 years to go I view it like I view social security - a good benefit for people in the near- to medium-term but I have no confidence it’ll be there for me in any significant form by the time I retire. I’m willing to make that financial commitment as a member of this pilot group because I know that a) it’s an import program that can benefit a lot of pilots sooner rather than later and b) it’s actually achievable in the scope of contract negotiations.

I agree that a lot of people got a royal screw job in BK, but the onus is on the company to do the right thing outside of contract negotiations if they really want to follow their core values to make up some or all of the shortfall that guys are experiencing. It’s not a burden that the current pilot group as a whole should bear by sacrificing other parts of the contract to achieve.

Also, go to the video of the roadshow starting at 1:10:00. It gets real around 1:11:47 when a negotiator says "The way we envision this is that the $135 million we talked about that we are getting in DPSP cash, that would start going in there on day 1, so that funds this thing with not one more penny from the company. So that saves that $50 million + dollars in taxes that pilots are paying today."

He goes on to talk about how if they negotiate an increase in the DC contribution then those additional dollars that would be DPSP cash today would go to further fund the new plan at a higher level.

It starts again on the roadshow around 1:17:20.

At 1:18:23 a question is asked about what would happen to the DPSP cash under the plan and the answer includes "DPSP cash would be non-existent" and a statement about how it would not be optional and that "it" would go in there.