MBCBP implementation announced…
06-02-2023 | 10:04 AM
#191
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From: Middle Seat
Don’t get me wrong, I think the “reinterpretation” of the ALPA bylaws is BS, but I’m amazed at the number of pilots that rationalize their participation in the MBCBP to avoid paying 1.85% in ALPA dues just to get a fund that underperforms the market by 5%+. Talk about cutting off your nose to spite your face.
06-02-2023 | 10:27 AM
#192
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Exactly. We were the only group getting spill cash and the amounts for being over the income cap (330,000 this year) had gone unnoticed by National as being subject to dues. When they realized we weren't paying dues on monies that would normally require dues, they informed the MEC. I believe the MEC took it to the Executive Board and subsequently to the BOD proposing a change to make those monies exempt from dues. Since we were literally the only group that was in this situation, the other carriers were not inclined to give a special dues exemption that would only apply to Delta pilots. Now if United, FedEx or some other carriers had spill cash, we might have had some success. That wasn't the case.
"The issue of cash over the cap (DPSP Cash) is not isolated to only Delta pilots. Pilots at Alaska, Frontier, Hawaiian, JetBlue, Spirit, United and FedEx all face this same situation. With the exception of United and FedEx, pilots at these other carriers pay dues on cash over the cap. United pilots do not pay dues on cash over the cap because they structured alternative avenues for the excess cash in their PWA. FedEx pilots do not get cash over the cap because their company’s contributions stop at the 401(a)(17) limit."
A5S
Edit: The proposed "solution" to paying dues on retirement money was to negotiate an MBCBP.
06-02-2023 | 10:30 AM
#193
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06-02-2023 | 11:43 AM
#194
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Don’t get me wrong, I think the “reinterpretation” of the ALPA bylaws is BS, but I’m amazed at the number of pilots that rationalize their participation in the MBCBP to avoid paying 1.85% in ALPA dues just to get a fund that underperforms the market by 5%+. Talk about cutting off your nose to spite your face.
06-02-2023 | 12:50 PM
#195
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From: Middle Seat
In the MBCBP poll thread, there are at least 8 that mentioned not paying dues was a huge benefit. While not their sole rationale, I have a hard time believing that the sub-par returns are the driving rationale.
06-02-2023 | 01:23 PM
#196
seeing the country...
Joined: Oct 2006
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From: 73N A
For me, the level of returns from a brokerage account for spill cash would have to be medium high for me to break even. I'm not buying real estate or other stuff with my spill cash, so the MCBP seems like a good choice if I don't want the spill cash for fun or other needs.
06-02-2023 | 01:30 PM
#197
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If you are 55+, the MBCBP is a way to have a small cash allocation heading into retirement. The amount accumulated before 59.5 represents what should be a small portion of an overall retirement accumulation. At 59.5 there is the added option of in service withdrawal which facilitates rebalancing. Based on forecast age 65 retirements, this represents about 1/3 of the list. For them the guaranteed additional 1.85% return on a cash balance is a worthy consideration.
06-04-2023 | 11:21 AM
#198
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From: N60.4858 W149.9327
https://www.blackrock.com/us/individ...rtinst-cl-fund
06-04-2023 | 12:28 PM
#199
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From: Middle Seat
The 10 year annualized return was 4.35% for LIRIX. (institutional shares) You can add 1.85% directly to that number so your return would be 6.2%, which isn't S&P level returns but pretty good given the low level of risk and the capital preservation guarantee. Like I said I'm in and will reap the returns on 100% tax advantaged money as this plan become the conservative element in my total portfolio.
https://www.blackrock.com/us/individ...rtinst-cl-fund
https://www.blackrock.com/us/individ...rtinst-cl-fund
However, if you’re close to the 59.5 in-service withdrawal eligibility then maybe the 1.85% is a bigger share of what returns you have left. For those of us with more than 5 years to that age, there’s no way we can add that 1.85% as an annualized return.
06-05-2023 | 02:50 AM
#200
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I know you’re smarter than this, but the 1.85% is a one-time savings, not an annualized return. The simple math that you posited is not connected to reality. For someone with 30 years, to even make a rough estimate, I would need to divide 1.85% by 30 which gives an annualized .061% savings; using you’re example would give something close to a 4.41% return on the MBCBP. Essentially negligible.
However, if you’re close to the 59.5 in-service withdrawal eligibility then maybe the 1.85% is a bigger share of what returns you have left. For those of us with more than 5 years to that age, there’s no way we can add that 1.85% as an annualized return.
However, if you’re close to the 59.5 in-service withdrawal eligibility then maybe the 1.85% is a bigger share of what returns you have left. For those of us with more than 5 years to that age, there’s no way we can add that 1.85% as an annualized return.
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