GoneSailing

The plan's funding limits, funding requirements and investment risk are based on defined-benefit requirements: as changes in the portfolio do not affect the final benefits to be received by the participant upon retirement or termination, the company solely bears all ownership of profits and losses in the portfolio.

In other words, we're hoping that the widget will have the positive cash flow, not using bankruptcy courts, etc to fund your retirement. Where have we seen this before? Sure, if you're retiring in a year or two the funding will be there (like social security) but if you have more than 15 years left... Watch out.

BobZ

What happens to my contributions if....
delta ceases to exist?
Or if delta is acquired?
Or if delta goes bankrupt?
If I quit-resign-fired?
I die before retirement?
I die one day after retirement?
If i decide i want to withdraw and along with it all my contributuons?
If delta goes bankrupt after i retire?
If delta or its sucessor is found to have engaged in malfeasance in funding and-or failure to pay the promised benefit?

And when Im retired, who specifically, is going to be the ceo that is going to be writing the checks to me, and continuing to fund the plan, that all the other preceeding ceos promised?

If you dont-cant fully have an answer to those questions than any opinion on the value of such a proposal is meaningless.

Also. If the advocating party cant produce a simple assumption spreadsheet showing the individuals net end positions of the cbdp plan vs an after tax individual investment account....than they are decieving the membership.

BobZ

For all the new (younger) pilots. If you dont know what a ponzi is i suggest you read up on it.

See.....its always those who pay into a ponzi the longest...that end up losing the most-est.

m3113n1a1

If it's truly voluntary, then go for it.

I'd rather opt out and take the 25% into my 401k and have the excess paid out to me as cash. But if it is truly voluntary and we have options, we can all be happy!

GoneSailing

Pon·zi scheme
/ˈpänzē ˌskēm/
noun
a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.
"a classic Ponzi scheme built on treachery and lies"

BobZ

ponzis are always voluntary.

GoneSailing

Agreed. But you do realize that the company has not agreed to up our retirement %. There are also significant tax benefits for the company to contribute to a plan like this. By not participating, you'll cost the company more money. Why would they allow that?

Denny Crane

Here we go again. I just want it noted that I did not start this thread.

An MBCBP is a recognized Defined Benefit type pension plan. As such wouldn't it be protected by ERISA law? Answer: Yes

So your contributions are still there if Delta ceases to exist. It is separated from Delta and will more than likely be administered by Price, Waterhouse, Coopers or some such company. (NOT Delta OR ALPA)

If Delta is acquired....What happened to the Western and Northwest DB pension plans? Did they go away or did the acquiring company take responsibility for them?

If Delta goes bankrupt........Have you read anything about this type of plan? It's your money and not subject to bankruptcy like our previous DB.

If I quit, resign, or are fired.......Again, it is your money. This is a quote from the article: "When participants terminate employment, they are eligible to receive the vested portion of their account." balances.

You are repeating yourself in the next points.

Your last bullet point about malfeasance......How can that happen and you not be aware of it and grieve it if necessary? It is a cash balance plan that requires a, well, cash contribution just like the 401k. You are tilting at windmills here.

When you retire no Delta CEO will be writing you a check. As I said earlier, the Plan will most likely be administered by PWC or some such company. If you want to, you can withdraw/rollover your entire balance in the plan to an IRA or whatever.

Disclaimer: I am not now or ever have been in any position in the Union. What I posted above is what I have gleaned from reading articles and reading/watching articles and videos put out by DALPA.

Denny

Denny Crane

Prove to me that this is Ponzi scheme. Why are there sooooo many of these plans out there?

Maybe you should take your own advice and read up on what a Ponzi scheme is.....

Denny

Denny Crane

I'm pretty sure the minimum balance they are talking about is referring to a minimum balance upon retirement. If an account has not reached this minimum balance then the company would have to make a contribution to reach this "minimum balance."

Denny