Market Based Cash Balance Plan
05-14-2019, 06:34 PM
#31
Gets Weekends Off
Joined APC: Jun 2015
Posts: 4,116
Good. Cuz you wont.
And i doubt other than generalized year end 'statements' you arent going to have a clue what the money you turn over to the cbdb trust is specifically being invested in.
Cud be Apple. Or gold. Or the present day equivalent of MBS or CDOs.
And i doubt other than generalized year end 'statements' you arent going to have a clue what the money you turn over to the cbdb trust is specifically being invested in.
Cud be Apple. Or gold. Or the present day equivalent of MBS or CDOs.
05-14-2019, 06:37 PM
#32
Gets Weekends Off
Joined APC: Sep 2008
Position: Kickin’ Back
Posts: 6,971
Originally Posted by GoneSailing
Of course I did.
I can think of two major company's that were Ponzi schemes, Enron and that investor guy from NYC that took stole billions (I believe) from his investors.
Denny
05-14-2019, 06:40 PM
#33
Gets Weekends Off
Joined APC: Sep 2008
Position: Kickin’ Back
Posts: 6,971
Originally Posted by BobZ
Good. Cuz you wont.
And i doubt other than generalized year end 'statements' you arent going to have a clue what the money you turn over to the cbdb trust is specifically being invested in.
Cud be Apple. Or gold. Or the present day equivalent of MBS or CDOs.
And i doubt other than generalized year end 'statements' you arent going to have a clue what the money you turn over to the cbdb trust is specifically being invested in.
Cud be Apple. Or gold. Or the present day equivalent of MBS or CDOs.
I realize a lot of pilots on this forum are investment gurus or at least know what they are doing in the market. I also think there are many more pilots out there that do not.
Denny
05-14-2019, 06:55 PM
#34
Gets Weekends Off
Joined APC: Jun 2015
Posts: 4,116
Im no investment guru.
But i can do basic math. And i can read and learn from history in general....and in specifics when it comes to my own well being.
And i have tried to develop and understand human behavioral patterns.
Criminals continue to exploit ponzi rackets for one simple reason. They work. Because the human behaviors and needs that feed a ponzi remain unchanged.
People want to believe in a good deal. They want to be told what they want to hear.
Its a good deal.
Its a sure thing.
Its guaranteed.
Of course its safe.
Its insured.
Its an ironclad promise.
There is absolutely nothing to worry about.
The investment company is beyond reproach.
Im no investment guru. A confirmed skeptic..may be.....but its for good reason.
But i can do basic math. And i can read and learn from history in general....and in specifics when it comes to my own well being.
And i have tried to develop and understand human behavioral patterns.
Criminals continue to exploit ponzi rackets for one simple reason. They work. Because the human behaviors and needs that feed a ponzi remain unchanged.
People want to believe in a good deal. They want to be told what they want to hear.
Its a good deal.
Its a sure thing.
Its guaranteed.
Of course its safe.
Its insured.
Its an ironclad promise.
There is absolutely nothing to worry about.
The investment company is beyond reproach.
Im no investment guru. A confirmed skeptic..may be.....but its for good reason.
05-14-2019, 07:00 PM
#35
Line Holder
Joined APC: May 2019
Position: 320A
Posts: 90
Originally Posted by Denny Crane
That remains to be seen. I would suspect one would be able to look and see what their balance is at pretty much any time.
I realize a lot of pilots on this forum are investment gurus or at least know what they are doing in the market. I also think there are many more pilots out there that do not.
Denny
I realize a lot of pilots on this forum are investment gurus or at least know what they are doing in the market. I also think there are many more pilots out there that do not.
Denny
05-14-2019, 07:44 PM
#37
Gets Weekends Off
Joined APC: Jun 2015
Posts: 4,116
Originally Posted by Denny Crane
That remains to be seen. I would suspect one would be able to look and see what their balance is at pretty much any time.
I realize a lot of pilots on this forum are investment gurus or at least know what they are doing in the market. I also think there are many more pilots out there that do not.
Denny
I realize a lot of pilots on this forum are investment gurus or at least know what they are doing in the market. I also think there are many more pilots out there that do not.
Denny
Your 'balance' is simply the accounting and actuarial representation of the annuitzed benefit calculation on the contracted ROI scale for the cbdb.
There will be a floor-minimum ROI annuitized benefit
payout based on your deposits to the trust. This is typically low single digits. 2-3-4%....and a maximum of maybe 6%.
A beneficiary isnt gona get anything but an annutized payout from a cbdb comingled trust.
This is why i suggest any advocate for a cbdb should at a minmum run a spread sheet of net end position using the min and max contracted ROI annutized payout from the cbdb plan in comparison to taking the after tax payout held on an s&p index fund over the same time frame.
05-14-2019, 07:46 PM
#38
Gets Weekends Off
Joined APC: Sep 2008
Position: Kickin’ Back
Posts: 6,971
Here is the latest put out by the Retirement and Insurance Committee:
Market Based Cash Balance Plan
The Contract 2019 Delta Pilots' Comprehensive Opener proposed to restore the pre-bankruptcy retirement value of the Delta pilots' retirement benefit. After an intensive study by the Delta MEC with assistance from various outside professional consultants, the Market Based Cash Balance Plan (MBCBP) was identified as a secondary plan that would help meet the wide range of Delta pilots' retirement needs. Currently, thousands of businesses offer an MBCBP to provide retirement savings to their professionals who have earnings similar to a Delta pilot's.
Currently at issue:
The 16% Defined Contribution (DC) from Delta falls significantly short of the pre-bankruptcy retirement value.
Annual 401(k) contributions are limited by the IRS.
More than 66% of Delta pilots currently reach these limits.
Once 401(k) contributions reach an IRS limit, they are paid out as "DPSP Cash" and taxed as ordinary income.
DPSP Cash is taxed at the pilot's highest marginal tax rate.
Further action by the pilot is required to invest "DPSP Cash" for retirement savings.
The proposed solution is three-fold:
Increase the total Company retirement contribution from 16% to 25%.
Establish a MBCBP to accommodate these additional Company contributions.
Contributions to the MBCBP would be Company-funded.
Pilot participation in the MBCBP is voluntary.
MBCBP is a "Qualified Defined Benefit Plan" that increases the total amount of tax-deferred retirement savings available for Company contributions. Assets cannot be taken from a pilot in the event of a Company bankruptcy.
The MBCBP provides pilots with options at their individual discretion:
Lump-sum taxable distribution
Roll-over into a tax-deferred IRA
Purchase a tax-deferred annuity
Any combination of the above
Delta and ALPA must receive approval from the U.S. Department of Treasury to establish the MBCBP
Negotiate a "minimum balance" within the MBCBP
Ensure Delta pilots retire with a meaningful benefit beyond their 401(k)
Funded by Delta to supplement Company contributions
The Delta Pilots Saving Plan (DPSP) alone cannot fully address the varying needs of 14,000-plus Delta pilots. A Company contribution of 25% supplemented with an optional MBCBP that guarantees a minimum balance provides significantly improved retirement security for all Delta pilots.
Market Based Cash Balance Plan
The Contract 2019 Delta Pilots' Comprehensive Opener proposed to restore the pre-bankruptcy retirement value of the Delta pilots' retirement benefit. After an intensive study by the Delta MEC with assistance from various outside professional consultants, the Market Based Cash Balance Plan (MBCBP) was identified as a secondary plan that would help meet the wide range of Delta pilots' retirement needs. Currently, thousands of businesses offer an MBCBP to provide retirement savings to their professionals who have earnings similar to a Delta pilot's.
Currently at issue:
The 16% Defined Contribution (DC) from Delta falls significantly short of the pre-bankruptcy retirement value.
Annual 401(k) contributions are limited by the IRS.
More than 66% of Delta pilots currently reach these limits.
Once 401(k) contributions reach an IRS limit, they are paid out as "DPSP Cash" and taxed as ordinary income.
DPSP Cash is taxed at the pilot's highest marginal tax rate.
Further action by the pilot is required to invest "DPSP Cash" for retirement savings.
The proposed solution is three-fold:
Increase the total Company retirement contribution from 16% to 25%.
Establish a MBCBP to accommodate these additional Company contributions.
Contributions to the MBCBP would be Company-funded.
Pilot participation in the MBCBP is voluntary.
MBCBP is a "Qualified Defined Benefit Plan" that increases the total amount of tax-deferred retirement savings available for Company contributions. Assets cannot be taken from a pilot in the event of a Company bankruptcy.
The MBCBP provides pilots with options at their individual discretion:
Lump-sum taxable distribution
Roll-over into a tax-deferred IRA
Purchase a tax-deferred annuity
Any combination of the above
Delta and ALPA must receive approval from the U.S. Department of Treasury to establish the MBCBP
Negotiate a "minimum balance" within the MBCBP
Ensure Delta pilots retire with a meaningful benefit beyond their 401(k)
Funded by Delta to supplement Company contributions
The Delta Pilots Saving Plan (DPSP) alone cannot fully address the varying needs of 14,000-plus Delta pilots. A Company contribution of 25% supplemented with an optional MBCBP that guarantees a minimum balance provides significantly improved retirement security for all Delta pilots.
05-14-2019, 08:01 PM
#39
Gets Weekends Off
Joined APC: Sep 2008
Position: Kickin’ Back
Posts: 6,971
Originally Posted by BobZ
'their balance'? Your deposits into a cbdb plan become part of a comingled trust. Its no longer your balance. Its the trusts balance.
Of course it's your balance. Yes, it goes into commingled fund but it is still your part of that fund. If its no longer my balance, how do they know how much to payout when you retire and want to roll it over.
Your 'balance' is simply the accounting and actuarial representation of the annuitzed benefit calculation on the contracted ROI scale for the cbdb.
There will be a floor-minimum ROI annuitized benefit
payout based on your deposits to the trust. This is typically low single digits. 2-3-4%....and a maximum of maybe 6%.
From what I've read it's usually based on the 30 year treasury bonds. According to the article at the beginning of this thread that's about 5%.
A beneficiary isnt gona get anything but an annutized payout from a cbdb comingled trust.
And you know this how?
This is why i suggest any advocate for a cbdb should at a minmum run a spread sheet of net end position using the min and max contracted ROI annutized payout from the cbdb plan in comparison to taking the after tax payout held on an s&p index fund over the same time frame.
Of course it's your balance. Yes, it goes into commingled fund but it is still your part of that fund. If its no longer my balance, how do they know how much to payout when you retire and want to roll it over.
Your 'balance' is simply the accounting and actuarial representation of the annuitzed benefit calculation on the contracted ROI scale for the cbdb.
There will be a floor-minimum ROI annuitized benefit
payout based on your deposits to the trust. This is typically low single digits. 2-3-4%....and a maximum of maybe 6%.
From what I've read it's usually based on the 30 year treasury bonds. According to the article at the beginning of this thread that's about 5%.
A beneficiary isnt gona get anything but an annutized payout from a cbdb comingled trust.
And you know this how?
This is why i suggest any advocate for a cbdb should at a minmum run a spread sheet of net end position using the min and max contracted ROI annutized payout from the cbdb plan in comparison to taking the after tax payout held on an s&p index fund over the same time frame.
Denny
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