CompetentFool

Here's a summary PDF file that pretty well explains this whole new concept:

http://findleydavies.com/Variable_Benefit_Plan_White%20_Paper.pdf

HIFLYR

So we the employee assume all the risk save the company a boat load of money required to be paid to fully fund our retirement as required by the government. Also, save the company a lot of money in PGF payments. The money set aside is then "managed" by someone and doled out to me at a certain rate after expenses are factored in. So what we get is a new retirement fund now seperate from the other employees "that worked really good for the pax carriers". Seems to be a win win for the company and a big risk for us. This also sets the stage for a b scale if you have to retire in a bad year as "benifit" would be different from year to year if I read it right.
I think I would like a lump sum option please! Or the option to stay with what i have.

Flaps50

Major Points here, the company has got to be laughing at us right now for even bringing this up out of section 6. We're doing their work for them... wow!

"TRADITIONAL DB PLANS AND RISK
In a DB plan, the employer bears the investment risk."

"DC PLANS AND RISK
Meanwhile, with a defined contribution plan, all
the investment risk is borne by the employee."

"A VARIABLE BENEFIT PLAN
A variable benefit plan is similar to a traditional DB plan, except that the investment risk and positive return is owned by the employees and not the plan sponsor."

How much would our risk premium be for taking on all this added risk?Credit Card companies charge people with terrible credit super high rates for a reason!

In his presentation, David Blitzstein is approaching our retirement from a standpoint that our A plan is essentially insolvent so this is the best solution. We are not insolvent, and our A plan is tied to the other FedEx management accounts which makes it even more solvent I'd have to imagine.

We are entering talks that will make our next contract negotiations even tougher by reducing leverage so the super senior guys with 25 years can get more retirement... unbelievable!

Flaps50

If these talks start to go behind closed doors where no one can talk about it then it's time to say no, and maybe time to recall some people!

Since I was a new hire I've always been told by our Union Leadership that we don't want two types of pilot retirement plans here at FedEx. I'm trying to figure out why now... we're going to screw the next generation of FedEx new hire pilots, and possibly ourselves in the process...

PicklePausePull

And don't forget the most important reason: Alpa is attempting to manage our retirement fund, thereby charging us a fee (Dues) until the day we die!

max8222

Assuming the article posted above is similar to what the MEC is looking at we the participant seem to occur most of the risk. This is from the article.

No PBGC Vairiable Premiums-company savings
No Investment risk for plan sponsor-good for company
No interest rate risk for Plan sponsor-good for company
Employees do not manage money-More fees for us
Mortality risk borne by plan sponsor-good for company
stable contributions to plan-good for company
reward long term employees- good if you have the time
most administrative fees paid by participants-bad for us good for company
inflation protection for participants-good for us

So it seems we are paying a huge price for inflation protection! No way the company is going to give us the money they would save from this deal. We have our contract and now we are negotiating with out any leverage. Buyer beware! Do the math! hard to replace what we have now. Just need to bump up our B fund to 12% to offset inflation and we have a great hybrid retirement package!

Timeoff2fish

This may go down in FedEx history as the dumbest thing the various unions at this place have ever done. Which is saying something.

dckozak

I not sure what the posters here though we could do to improve retirement outside of section 6 negoiations. Fifty seven percent voted for the contract, plenty of those were well aware of the issues related to retirement and the freezing of the A plan benefit. Had there been a meanful improvement in the B fund %, I don't think there would be this discussion even though senior, near retirement pilots would still be screwed because the additional money in the B plan would still fail to have any meaningful affect on their retirement income.
The only reason this is a issue is the more junior pilots also are screwed by the pittance B plan improvements and will with 8% and 9% later, still fall behind what an improvement on the A would and should have provided.

In this, both junior and senior are disadvantaged, we all get screwed. The problem should have be solved before we voted in the contract. I said so, may others did, related specifically to retirement. The majority disagreed. Before you blame the union leadership for what you think is a lousy solution to this problem, remember we are not in negations and won't be for several years. We, collectively created this problem. I voted NO and I know many on this board did also, but many more saw the glass half full a year ago or bought (in my estimation) the stupid argument that we could reopen negotiations with the company and "solve" this problem outside of section 6. No one I know who's been here longer than one contract is delusional enough to believe that Fedex is going to spend a penny outside of negoiations on it pilots. If the union has a cost neutral solution that the majority see as a personal win, than a change will be made. It will not be without some cost, just make the (personal) calculation and voice your opinion. there is no free lunch.

kc10/c130

BRAVO, could not of said it better! This is a horrible, horrible idea and the worse part is we, yet again, are doing it to ourselves.

MelT

Amen. We can't possibly be this stupid.