NQDC
 

Trying to just start discussion on the new NQDC (Non-qualified deferred compensation) plan here.

First glance I think good:

#1 : OPTIONAL
#2 : potential tax advantage
#3 : rainy day fund (before it pours, eg bankruptcy)
#4 : discretionary allotment


Bad:

#1 : company owned asset (a la pension)

Personal thoughts:

If I’m very close to retirement this might be enticing maybe within a year of 65 right now.

if I’m close to retirement 64 down to maybe 55 (YMMV) this seems like a small gamble

if I’m 55-45 it’s an absolute hell no

if I’m younger than 45 it’s just a solid maybe.

if I’m less than 40 probably a good gamble….maybe😂

Anyway, curious what others really think about it. Would love if responses wouldn’t divulge too much pilot-based investment strategy and focus on participation at different seniority/age levels though I get it all plays together.

I heard about this on the DALPA podcast last week. It seems like a good deal. The guest speakers noted that many high compensation career fields have similar options through their employers. I can see a good use case, even for the younger crowd, for withdrawing that money while in a lower tax bracket, particularly during an LOA or disability situation. I was hoping someone would start a thread on it, because I'm sure there are people with even better ideas on how to use it strategically. Those are my first thoughts.

I don't meet the criteria for eligibility- yet but I like having options. My 457 account (essentially what this is) helped me to make a career transition.

Key is the plan to be in lower tax bracket when taking distributions

If I invest right and retire at 65, with my previous career pension, SS (if it's still there), and my mandatory 401k distributions-. I am not sure if I will indeed be in a lower tax bracket when reitred. I hope I am not- and therefore this account would not be a good deal.

But if I have a disability or LOA or something else it might be a good place to defer some taxable income that I might use later

And for this reason alone, I'm out.

Same.
10char

I can hear Cuban’s voice in my head :D

I was trying to decide between that and "it's a no for me dawg." So many choices! :D

maybe you do.

it’s 55yo OR
captain OR
wbb OR
instructor


i could see this being useful for me if the distribution timeline choices line up well. hustle in one year to coast in the next. i see that as very appealing to me later this decade

"The trust that holds deferred compensation is still considered a part of the Company’s general assets. While these funds are not available to the Company for day-to-day operations, they could be subject to creditors’ claims in the event of bankruptcy. "

That's the rub, isn't it?

If you had a couple years to go, maybe roll the dice?

10 years (or longer, for the very young captains) is an eternity in airline world.

Leaning no.

i don’t think you have to hold the money in the fund until retirement. as mentioned, you could use it for a home down payment, which leads me to believe distributions are much more customizable than just holding until retirement. (the update also mentions that the pilot can choose a distribution schedule)