Minimum Balance Plan
11-13-2022 | 05:18 PM
#111
On Reserve
Joined: Jan 2020
Posts: 25
Likes: 0
My concern with the MCBP. It's "deferred compensation"
Although ALPA would LIKE for it to be optional, my understanding of current IRS policy is it won't be. We all pay excess in or none of us do.
I have 21 years until retirement.
There are pilots on property with 40 plus to retirement.
Who is to say the MCBP will be there or properly funded if Delta goes bankrupt when I'm 63.
The Pension was bankruptcy resilient until it wasn't. There is also the concern of where the money goes if you don't live long enough to get it. That, based on my family history is a valid concern of my dependents. My father lived the longest of all my male ancestors. He died a week after his 66th birthday after losing his medical at 59.(not an airline pilot but still)
I, as a granted fairly junior Captain don't hit the IRS limits. It unless I am borking up the math is just under $381k gross to hit the 2022 $61k limit (ignoring over 50 catchup limits for now)
$381,250* 16% = $61,000
$381,250 at $271 and hour is a bit over 1400 hours pay.
Granted this is year 5 321 A pay (even more hours if I ever touch a 319/20)
Even in a year where I had 2 months rolling thunder, fairly high ALVs and a couple one or two day GS most months, i'm not getting close to that.
Im not seeing where the benefit is.
If I have dorked up some assumption, or my numbers are wrong, (got from irs.gov, but I'm not a CPA or tax guy) please correct me.
Although ALPA would LIKE for it to be optional, my understanding of current IRS policy is it won't be. We all pay excess in or none of us do.
I have 21 years until retirement.
There are pilots on property with 40 plus to retirement.
Who is to say the MCBP will be there or properly funded if Delta goes bankrupt when I'm 63.
The Pension was bankruptcy resilient until it wasn't. There is also the concern of where the money goes if you don't live long enough to get it. That, based on my family history is a valid concern of my dependents. My father lived the longest of all my male ancestors. He died a week after his 66th birthday after losing his medical at 59.(not an airline pilot but still)
I, as a granted fairly junior Captain don't hit the IRS limits. It unless I am borking up the math is just under $381k gross to hit the 2022 $61k limit (ignoring over 50 catchup limits for now)
$381,250* 16% = $61,000
$381,250 at $271 and hour is a bit over 1400 hours pay.
Granted this is year 5 321 A pay (even more hours if I ever touch a 319/20)
Even in a year where I had 2 months rolling thunder, fairly high ALVs and a couple one or two day GS most months, i'm not getting close to that.
Im not seeing where the benefit is.
If I have dorked up some assumption, or my numbers are wrong, (got from irs.gov, but I'm not a CPA or tax guy) please correct me.
$381,250* 16% = $61,000
Looks like you are only considering company contribution alone in reaching the IRS limit. Personal contributions to the 401k help many (myself included) in reach that limit at much lower W2's than the quoted example. Thanks.
11-13-2022 | 05:19 PM
#112
Banned
Joined: Sep 2016
Posts: 8,831
Likes: 499
“dpsp cash” used to be the payroll code for your defined contribution money (the company paid 16%) that is paid out as normal income once you hit the IRS 415c limits. It’s a reference to the Delta Pilot Savings Plan. It’s now labeled “401k excess”
11-13-2022 | 05:21 PM
#113
Gets Weekends Off
Joined: Nov 2017
Posts: 3,467
Likes: 627
From: NYC 7ERA
As I just learned it's $305,000 now and going to $330,000. at income above that level, the 16% is put in your check, but is taxed.
11-13-2022 | 05:21 PM
#114
Gets Weekends Off
Joined: May 2016
Posts: 397
Likes: 0
11-13-2022 | 05:22 PM
#115
Banned
Joined: Sep 2016
Posts: 8,831
Likes: 499
Do you know where in the IRS regs the compensation limit is 305/330? I can find the "max is 61k" and "no more than 100% of your compensation" but I haven't done an exhaustive search of IRS regs.
Non related to contract, but I'd almost prefer if the IRS took X percent off the top and I never had to worry about having some record from 6 years ago, audits, filing, nothing. Just here is XX percent of your gross, have a nice life. Our tax code sucks. But back to contract limits.
Did not know there was a max limit, other than can't exceed 100%. Thank you.
Non related to contract, but I'd almost prefer if the IRS took X percent off the top and I never had to worry about having some record from 6 years ago, audits, filing, nothing. Just here is XX percent of your gross, have a nice life. Our tax code sucks. But back to contract limits.
Did not know there was a max limit, other than can't exceed 100%. Thank you.
11-13-2022 | 05:23 PM
#116
Banned
Joined: Sep 2016
Posts: 8,831
Likes: 499
DPSP Cash is what shows up on your pay statement when you have made more than the max allowable by the IRS as your 16% contribution is concerned.
As I just learned it's $305,000 now and going to $330,000. at income above that level, the 16% is put in your check, but is taxed.
As I just learned it's $305,000 now and going to $330,000. at income above that level, the 16% is put in your check, but is taxed.
11-13-2022 | 05:29 PM
#117
Gets Weekends Off
Joined: Sep 2015
Posts: 5,528
Likes: 197
From: UNA
Do you know where in the IRS regs the compensation limit is 305/330? I can find the "max is 61k" and "no more than 100% of your compensation" but I haven't done an exhaustive search of IRS regs.
Non related to contract, but I'd almost prefer if the IRS took X percent off the top and I never had to worry about having some record from 6 years ago, audits, filing, nothing. Just here is XX percent of your gross, have a nice life. Our tax code sucks. But back to contract limits.
Did not know there was a max limit, other than can't exceed 100%. Thank you.
Non related to contract, but I'd almost prefer if the IRS took X percent off the top and I never had to worry about having some record from 6 years ago, audits, filing, nothing. Just here is XX percent of your gross, have a nice life. Our tax code sucks. But back to contract limits.
Did not know there was a max limit, other than can't exceed 100%. Thank you.
employees cannot contribute more than a certain amount of their income (20.5k in 2022, 22.5k in 2023)
415c limit. employee + employer cannot exceed a certain number (61k in 2022, 66k in 2023)
both of the above are subject to catch up if you are 50+
your employer cannot use your salary beyond a certain threshold to calculate their contribution (305k in 2022, 330k in 2023) to find this number multiply the 415c limit by 5
if you put nothing in your 401k the income limit will be your limiting factor for how much the company can contribute. If you put in money yourself the 415c limit will most likely apply.
on a side note I think this is an excellent argument for a 20% (or better) DC, this way a pilot can reach the 415c limit when they also hit the income limit, assuming no personal contribution
11-13-2022 | 05:34 PM
#118
Gets Weekends Off
Joined: Nov 2017
Posts: 3,467
Likes: 627
From: NYC 7ERA
Say I put in 20k pre tax. (limit is around there, I would hit that if we were in a PS year)
Company limit is now 41k to hit 61k. Now hitting that at $256k or so, which is well in the "I just fly ALV" range for a 320A
But now the last 10k of the 16% is 401k Excess (DPSP in the old payroll code)
If my taxed income is the same is there a benefit to having put it in myself or not?
Thru OCT 31 pay stub this is mine:
$39,526 COMPANY 401K FIXED
$7,411 410(K)
$4,941 ROTH
Right now, I will probably have about $57,500 between all three (assuming RES guarantee rest of year)
I want to say I have 3% 401k, 2% Roth, but last time I set those numbers I was coming back from long term mil leave but that looks right.
11-13-2022 | 05:46 PM
#119
Gets Weekends Off
Joined: Feb 2008
Posts: 20,869
Likes: 187
Do you know where in the IRS regs the compensation limit is 305/330? I can find the "max is 61k" and "no more than 100% of your compensation" but I haven't done an exhaustive search of IRS regs.
Non related to contract, but I'd almost prefer if the IRS took X percent off the top and I never had to worry about having some record from 6 years ago, audits, filing, nothing. Just here is XX percent of your gross, have a nice life. Our tax code sucks. But back to contract limits.
Did not know there was a max limit, other than can't exceed 100%. Thank you.
Non related to contract, but I'd almost prefer if the IRS took X percent off the top and I never had to worry about having some record from 6 years ago, audits, filing, nothing. Just here is XX percent of your gross, have a nice life. Our tax code sucks. But back to contract limits.
Did not know there was a max limit, other than can't exceed 100%. Thank you.
11-13-2022 | 05:54 PM
#120
Line Holder
Joined: Jul 2007
Posts: 907
Likes: 55
From: B737 FO
As someone who has spent most of my time at Delta basically making up for my 30s being an economic wasteland (paying off medical debt, student loans, etc) what would be the reason to intentially max out the 61k limit early, if the net taxable income is the same.
Say I put in 20k pre tax. (limit is around there, I would hit that if we were in a PS year)
Company limit is now 41k to hit 61k. Now hitting that at $256k or so, which is well in the "I just fly ALV" range for a 320A
But now the last 10k of the 16% is 401k Excess (DPSP in the old payroll code)
If my taxed income is the same is there a benefit to having put it in myself or not?
Thru OCT 31 pay stub this is mine:
$39,526 COMPANY 401K FIXED
$7,411 410(K)
$4,941 ROTH
Right now, I will probably have about $57,500 between all three (assuming RES guarantee rest of year)
I want to say I have 3% 401k, 2% Roth, but last time I set those numbers I was coming back from long term mil leave but that looks right.
Say I put in 20k pre tax. (limit is around there, I would hit that if we were in a PS year)
Company limit is now 41k to hit 61k. Now hitting that at $256k or so, which is well in the "I just fly ALV" range for a 320A
But now the last 10k of the 16% is 401k Excess (DPSP in the old payroll code)
If my taxed income is the same is there a benefit to having put it in myself or not?
Thru OCT 31 pay stub this is mine:
$39,526 COMPANY 401K FIXED
$7,411 410(K)
$4,941 ROTH
Right now, I will probably have about $57,500 between all three (assuming RES guarantee rest of year)
I want to say I have 3% 401k, 2% Roth, but last time I set those numbers I was coming back from long term mil leave but that looks right.
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