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Fedex Pilots proposed retirement plan

Old 08-17-2017, 07:15 PM
  #201  
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Originally Posted by StarClipper View Post
Absolutely BS, 30yrs from now, 130k we still be 130k. The buying power will be determined by the economy, this is no reason to give up what you already have for some unknown with greater risk. Stop poisoning this new hires brain
Are you really a new hire? If you are young and give Fedex at least 25 years, you will top out at 50% of your final average earning. Assuming no change in the cap and assuming you are fairly young. Chew on this:

Our last known rate of pay for WB CAPT on Nov 2020, 15 years service is $335.56. Use what ever multiplier you like to guesstimate yearly pensionable earnings. Based on historical averages, we (I mean you, I'll be gone) can expect 3% pay increases if inflation doesn't change from current trends. By my figuring, the hourly rate for Fedex should be about $700 per hour in 2045, your yearly pay least $700,000 per year. Your A plan payout the year after you retire, $130,000 (18.6% of your previous years pay). Your income in 2070, possibly age 90, A plan, $130,000. Fifty two years from now, with steady 3% inflation, all money, in constant dollars, will be worth 78.5% less. To put it another way, $130,000 in 2070 will be worth the equivalent of $27,951 today. On the hypothetical day of your retirement in 2045, 55% less with 130K equivalent to $58,525 today. All this assumes 3% inflation, worse inflation, bad to really ugly.

I hope your B fund does as well as mine has in recent years. PRIMECAP has had double digit gains. I hope the good times roll. We will all need it, especially you guys.
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Old 08-17-2017, 07:46 PM
  #202  
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Originally Posted by dckozak View Post
Are you really a new hire? If you are young and give Fedex at least 25 years, you will top out at 50% of your final average earning. Assuming no change in the cap and assuming you are fairly young. Chew on this:

Our last known rate of pay for WB CAPT on Nov 2020, 15 years service is $335.56. Use what ever multiplier you like to guesstimate yearly pensionable earnings. Based on historical averages, we (I mean you, I'll be gone) can expect 3% pay increases if inflation doesn't change from current trends. By my figuring, the hourly rate for Fedex should be about $700 per hour in 2045, your yearly pay least $700,000 per year. Your A plan payout the year after you retire, $130,000 (18.6% of your previous years pay). Your income in 2070, possibly age 90, A plan, $130,000. Fifty two years from now, with steady 3% inflation, all money, in constant dollars, will be worth 78.5% less. To put it another way, $130,000 in 2070 will be worth the equivalent of $27,951 today. On the hypothetical day of your retirement in 2045, 55% less with 130K equivalent to $58,525 today. All this assumes 3% inflation, worse inflation, bad to really ugly.

I hope your B fund does as well as mine has in recent years. PRIMECAP has had double digit gains. I hope the good times roll. We will all need it, especially you guys.
I never said I hire was new or old hire, however the risk isn't worth it. Your company drew a line in the sand, where are your union willing to draw their line on behalf of the pilot group? What's next on the agenda for the company to draw a line?
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Old 08-18-2017, 01:59 AM
  #203  
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DKozak, I do not refute that with inflation the A plan will lose its value over time. Government caps should increase with inflation. However at this present time and until the company can (due to gov caps) and is willing to pay us the current value of our A plan, we are fools to swap out.

The current process out of contract negotiations makes us look desperate and willing to accept pennies on the dollar to assume all the risk of our retirement. If it was that important we should have not approved the current contract and not crossed that line in the sand. Retirement improvement was one of the cornerstones going into negotiations.

While I do not want to divide the crew force into different plans, maybe that is the way to go as one shoe does not fit everyones retirement portfolios.
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Old 08-18-2017, 04:46 AM
  #204  
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Originally Posted by dckozak View Post
Are you really a new hire? ...
He is not with FDX just feels a compulsive need to comment on our union matters.
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Old 08-18-2017, 04:50 AM
  #205  
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Originally Posted by max8222 View Post
...While I do not want to divide the crew force into different plans, maybe that is the way to go as one shoe does not fit everyones retirement portfolios.
Unfortunately, what's being proposed will divide the crew force in many ways.

The changes being proposed will not benefit all the same, and may in fact have a substantial negative impact on those in the current A plan who have yet to reach their "high five", but have a substantial number of years with the company and don't have a long time horizon left

Under the current A plan it doesn't matter when you get your "high 5", it just matters that you get it. Many pilots choose to upgrade at different times due to many personal reasons.

At least one of the plans being considered by the union will penalize pilots who don't upgrade at the earliest possible time. The proposed plans are really "defined contribution" plans from the company's perspective and that's why they like them.

Additionally, the changes being proposed will involve making a brand new, separate A plan. Not just tweaks to the current plan.

The new A plan will be structured, funded and managed differently, by a different plan administrator

The current A fund will be frozen with your current benefit

However, for all pilots who have yet to attain their high 5 they will be locked into this lower benefit with no opportunity to increase it

The years of service multipliers already earned in the current plan won't be applied to the new plan

One problem with moving to this new plan is that while it may increase the overall retirement for one pilot cohort, it can actually decrease the overall potential retirement benefit from other cohorts

While gains in the CBA are not always uniform, we shouldn't disadvantage one group just to advantage another.
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Old 08-18-2017, 05:05 AM
  #206  
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Careful, I was called a cubicle commando for pointing out part of the reason for the current negotiations is to get more for the 25+ YOS pilots. I didn't even criticize it, just pointed out that was part of the motivation.

You are correct. This plan will have a disparit impact. Winners will be new hires and anyone who will exceed 25 YOS. There will be plenty of no gainers with increased risk. And some losers, people who were hired after 40 who planned on just maxing out their current A Plan.

Keeping our current A Plan should be an option.

Last edited by Fdxlag2; 08-18-2017 at 05:20 AM.
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Old 08-18-2017, 05:22 AM
  #207  
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Originally Posted by dckozak View Post
Are you really a new hire? If you are young and give Fedex at least 25 years, you will top out at 50% of your final average earning. Assuming no change in the cap and assuming you are fairly young. Chew on this:

Our last known rate of pay for WB CAPT on Nov 2020, 15 years service is $335.56. Use what ever multiplier you like to guesstimate yearly pensionable earnings. Based on historical averages, we (I mean you, I'll be gone) can expect 3% pay increases if inflation doesn't change from current trends. By my figuring, the hourly rate for Fedex should be about $700 per hour in 2045, your yearly pay least $700,000 per year. Your A plan payout the year after you retire, $130,000 (18.6% of your previous years pay). Your income in 2070, possibly age 90, A plan, $130,000. Fifty two years from now, with steady 3% inflation, all money, in constant dollars, will be worth 78.5% less. To put it another way, $130,000 in 2070 will be worth the equivalent of $27,951 today. On the hypothetical day of your retirement in 2045, 55% less with 130K equivalent to $58,525 today. All this assumes 3% inflation, worse inflation, bad to really ugly.

I hope your B fund does as well as mine has in recent years. PRIMECAP has had double digit gains. I hope the good times roll. We will all need it, especially you guys.
So, how would you feel if a pilot you were hired with retires at 60 with 25 YOS gets $160K per year and you decide to stick around for 2 more years and the market goes south and you get $120k per year.

What if the new plan is constantly being adjusted even after retirement and when you are 68 and have a large expense and the market loses 30% and your DB goes from $150K, money you were counting on, to $85K that year?

Would you be willing to give up the retirement notification bonus that only pilots who are 56 or older are eligible for to get this so called better plan? That's money that at least 80% of the crew force isn't eligible to receive. How much risk/reward are you willing to take?
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Old 08-18-2017, 05:55 AM
  #208  
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Can anyone provide a bit of a synopsis on the hub meetings? Attendance, items covered, reception by the crowd, etc.
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Old 08-18-2017, 06:35 AM
  #209  
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Originally Posted by Fdxlag2 View Post
He is not with FDX just feels a compulsive need to comment on our union matters.
Did I say something wrong or offended you in anyway
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Old 08-18-2017, 07:27 AM
  #210  
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FWIW-
Founder of the Lawsuit donned his ALPA lanyard following the meeting and sure sounds supportive of the process our current leadership is following.
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