Your numbers sounds very reasonable and you are probably right. I think they will be higher.

Thanks for the post.

 

Why are the pilots who still have the full defined benefit plan staying beyond age 60?
Is it a medical coverage problem?

Their pay rates as a senior captain might be pretty good but by giving up the retirement benefits they could be receiving, they are essentially working for a fraction of that pay rate.

Is it really worth the few dollars a month extra to work full time?
Help me understand the reasoning. I think if it were me, I'd be out fishing instead of working.

 

First, very few have a "full" defined benefit plan. Most were frozen at substantially less than anticipated. Despite Mr. Obama's claims, private health insurance is very expensive. One of the reasons I took the last early retirement package was that the company put close to $50K in a HSA for me to pay for health insurance until I turn 65. There is much more to the decision to retire than just a paycheck.

 

I have a friend who is a 85 hire at NW. His retirement package is about 80,000 a year from the DB plan. His currently averages 270 k a year plus the DC plan. Total over 300k. He would be very surprised to find out he is working for a fraction of his pay.

 

Wow! Kinda puts it in perspective. Easy to say retire when your making 1/3 of that with no DB.

 

Not the only guy...

...It's just a lack of long-term memory amongst the pack. Prior to C2012, we only had one year where profit sharing had put anything meaningful in our wallets.

I think that there is more than one way to make our next contract just as valuable to pilots while removing the variables associated with profit sharing.

Does anyone honestly believe that this period of economic expansion will continue unabated? Does anyone really want their pay tied to managerial performance? I would rather eliminate uncertainty during the next downturn, and beef up our work rules, which are notoriously hard to change in negotiations.

I think this will be a tough sell to the membership. Probably an impossible sell if the projection for next year's profit sharing is correct.

I'm just one pilot, anyway, I'm sure there are about twelve thousand other guys with better ideas...

 

And I hope you are underestimating the number. It would serve our interests.

 

Call me a cynic, but let's get real. Check's original post had nothing to do with some altruistic "concern" for the truly best decision that a 62-year-old captain should make, and everything about him and the rest of us moving up a number.

I can remember lots of F/Os in the 2004-05 timeframe (big run of early retirements for PMDL guys) stating something like "if I were 50 years old and a day I would be outta here!"

Right..... For those who aren't familiar with all the particulars of the PMDL early retirements in the 2004-05 timeframe, if you were 58 or older, it was a no-brainer--retire early. If you were younger than that it was a tougher decision. If you were in your early 50s, it was really a poor decision to retire early, unless you were convinced DAL was about to liquidate (which we were perilously close to doing).

I know a guy who was a mid-seniority 767 captain, retired at age 52, and got $400,000 in a lump sum. He now only gets a small sum from the PBGC these days. Had he stayed in, he would just now be 62, having flown as a senior widebody captain for the last ten years. He regrets it mightily I am guessing.

Of course who could have forecast Age 65, and the fact that we got a stellar management team on the heels of a woeful one?

That said, I am sure that the same F/Os who kept saying "gee I don't get why these guys won't retire" are somewhat quieter now.

 

Concerning profit sharing; DAL is currently enjoying tax benefits from years of losses that offset current profits for tax purposes. DAL is not paying taxes on our corporate profits currently. IIRC, we have something like another $12+ billion in losses to offset against profits. When we run out of previous loss to use as an offset, then DAL will be paying full corporate taxes and our profit sharing will suffer .

My numbers may not be super current as the conversation they come from is 6 months old. Profit sharing under the coming contract will not see the record profits being projected for this year. Pay raises are sure bets. Profit sharing is less sure.

 

I am fine with getting hard rates instead of profit sharing. However, I do not want this swap to be considered a "raise". Let's say your personal minimum for negotiations is 20% on day 1. Any swap with profit sharing should not be included in that amount. It should be over and above. Don't sell it to me as a "raise" like you did in C2012.