Great post. Sounds like we’re in about the same spot. After seeing the carnage of hiring until we furlough cause that’s the way it’s always been done, I never want to see anyone go through that again. Glad to see that paradigm changed at least this time.

There’s a lot of teeth gnashing on this thread but I’m hoping we can move in the direction of taking care of each other when possible rather than finding reasons to divide ourselves.

As someone saved by your actions, thank you for doing this! Since I’ll be back soon, when I fly with guys/gals who did have to endure a furlough here, I’d be thrilled to buy all the beers on the trip.

Sorry my bad....I need to RTFQ...

Denny

I’d argue you’re on to something here. A NW 98-01 hire had very little in the way of an accrued DB benefit. Not only was there little in the way of benefit service, but it was in the lowest paying aircraft.

But understand that right up to the point of 9/11, the pension was essentially fully funded. I remember reading the ERISA reports posted on the bulletin boards. They were always >100%...until they weren’t.

There were a lot of issues that went into the fund shortfall. Short term, the value of the plan assets caused an immediate shortfall, but long term, the value of those assets eventually recovered. What drove the final nails in the coffin was the collapse of long term interest rates. ERISA calculations center around those numbers, and if they are low enough (which they have been since the mid-2000s, and have been hovering near zero since 2008), it can drive extremely high plan contribution requirements. It is mostly irrelevant how the well the plan assets actually perform, it’s all about that long term interest rate.

You hear a lot of complaints about how underfunded some pensions find themselves, especially public pensions. That’s true, but only because the near zero interest rate is driving the calculations. They don’t look at a reasonable market return. What’s not explained is the same phenomenon giving people 2% mortgages and 0.25% CD rates is exactly the same problem causing the “underfunded” status. If the long term interest rate returned, even to the bottom of the historical average, say 4-5%, many of those same pensions would find themselves fully funded overnight.

Managements love DB plans with normal interest rates and just average returns. The plans pay for themselves and no real money is required. DC plans, OTOH, cost real money every two weeks.

What burned many of the NW guys hired from 98-01 that is talked about above is the way the targeted DC worked. There was a point calculation that was the sum of your age and longevity. With that calculation was a fairly severe “cliff”. If you were young enough or new enough, you got a fraction of what someone a couple years older/more senior got. By the time those pilots “aged into” the other side of the break, the merger happened, which replaced what they had been getting with a flat DC, which in many cases was a reduction.

So to summarize the problem these guys face, a minimal to zero frozen DB benefit, a >40% pay cut, stagnated in bottom paying positions/furloughed, comparatively small targeted benefit, and elimination of a higher targeted benefit in favor of a flat DC in the merger.

What a crock.

Lol. Hey lets bring up how much 175k is in today's dollars again?
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Nice job 20Fathoms

A fine riposte James :rolleyes:. Perhaps you missed the part where I said the DZs deserve sympathy and I would at least consider the specifics of any plan put forward to help them. Speaking of, what do you propose we do? Buck put forward an idea, let’s hear yours.

Or we could always go back to our regular scheduled program of you telling us about the absurd amounts of money you make while simultaneously being too poor to take the VEOP.

Yep, I was hired in April 98, never furloughed, but got within 100 from bottom, spent 15 years in the bottom 25% of seniority list, unable to upgrade until 16 years after hire (if I had wanted to be very junior MD88A in NYC).
I'm doing OK now as A350 FO with a little over 5 years left and 1.5 mil in my 401k. I don't see any special carve out for me or anybody else happening. It was a crapshoot when we got hired and we just play the cards we were dealt. Plenty of folks had it worse, some had it better, thems the breaks.
Best thing we can do as a union is improve work rules and pay for everybody and stop dividing the pilot group with targeted issues.

Yeah, always fun to have to explain this to guys like A A Ron who spouts “what did you guys do with all your money.....”

If you were older than average (and NWA tended to an older demographic), with just a little longevity, the point cliff hit pretty hard. The opposite, with a younger guy but with more time worked out better because there was a bit more time to recapture it with a flat DC.

The peak hiring was in mid-98 in that cycle. If you managed to get in before that, you tended to do relatively better. DC-9 captains just before the age-65 thing made it into mid-98 before the big re-wind. After that, you were locked into whatever it was you were doing for a long time.