Status quo

 

I very highly doubt that many (if any) pilots arrange their bids (GS or otherwise) around the DC.

 

Look Bro, I've been following this thread trying to understand this thing. I thought i had a basic grasp on this but i guess I'm wrong. Sounds to me like once you fill your 401k, all the extra dough goes in here. I fly with a lot of captains that Bragg about flying a lot to fill up their 401k and have the excess cash in hand later on in the year. Seems to me like of that cat now goes to an account instead of being cash in hand, it eliminates this particular incentive.

 

Sort of true. But if you make $300 /hr and a GS will pay you $600/hour, you still get ALL that money. It's the DC on that money that goes to spill cash IF and only IF you reach the IRS limit($66,000ish or 330,000 annual pay). But that spill cash is still yours, but the returns on that small portion MIGHT be less than what you could do outside of the MBCBP. As a non new-hire you can opt out.

Seems like very little disincentive to not pick up that GS and I doubt it would affect anybody's bidding strategy. JMHO

 

I'll be on track for my first ever six figure year this year with a potential upgrade in the near future so i haven't really ever had to think about these big money problems before. It seemed like a bigger deal than what it is in reality I guess

 

If you make $400,000 in FLT PAY and don't put any more than $13,200 in to your own 401k, the company is putting $52,800 into your 401k. The $11,200 you get for the last $70,000 you earned is either going in to the MBCBP or getting taxed as normal income. It isn't a huge chunk of your total yearly compensation, nor is it a huge chunk of any GS renumeration. It is still a pretty large chunk of money, with sought after low returns, but I doubt anyone is going to not pick up a GS because of it.

 

After speaking with my financial advisor, they recommended remaining in the plan (I have over 30 years left). It's a conservative vehicle for retirement with robust protections. If in the next few years I decide to further dive into real estate, I'll have plenty of discretionary income to invest in those ventures.

For me the red flag was the fact that I have to decide once and be married to said decision for the rest of my career. After further thought and listening to the union comms, I understand there were limits to what they could do with these plans and there really is no incentive for the union to maximize pilots into this plan other than they believe it's a decent addition to the typical pilot retirement portfolio.

Just to add a different perspective to this discussion, though it seems the general mentality here has solidified toward the MBCBP being bad for people with more than 5-10 years left...

 

Thanks for the explanation, I hadn’t considered the Medicare side of it. Whenever I start looking closely at all the different taxes I am saddled with, I tend to get grumpy, and that’s not good. I do appreciate the different viewpoints of the new program, just trying to navigate it and be a good steward of the resources that come my way. We don’t know if we have made the right decisions until it’s too late to change.

 

I just have to laugh at the SA I've observed from some of the pilot group. I've tried to have some intelligent discourse with the last three captains I've flown with. Ages ranged from 39 to 61. Responses have ranged from "What are you talking about?" to wild conspiracy theories such as "This is just a ploy by ALPA to build ANOTHER lockbox that the Company can just steal away from us AGAIN in the next bankruptcy" (lol wut!?). I'll bet more pilots know more about crew meals than have taken the time to educate themselves on this once in a career decision.

 

I’ve got 25+ years until retirement, and I plan on opting in (by not opting out). All of my pretax and company contributions go to my brokerage link account where I can invest however I want, so when I get spill cash (and this will be my first year getting it), I can offset the bond holdings in the plan with a higher risk tolerance in the brokerage link account. Risk neutral, greater tax avoidance.

To be more honest… My nearly 50% QQQ retirement account will be better hedged with tax benefits & bonds.