Fedex Pilots proposed retirement plan
11-10-2017, 10:39 AM
#551
Gets Weekends Off
Joined APC: Jul 2007
Position: Gear Monkey
Posts: 3,191
A pilots total retirement is currently based on his Defined (guaranteed) Benefit + his personal performance of his B fund
Assuming each pilot currently manages his B fund in accordance with his personal needs and risk tolerance, what affect will changing from a Defined (guarunteed) Benefit to a Variable Benefit have on a pilots management of his B fund?
I think any prudent financial advisor would recommend you dial back your B fund risk — which will lead to lower returns in that portion of your retirement portfolio. The portion you can pass on to your heirs.
My point - chasing increased returns, by increasing risk, does not come without a cost
Assuming each pilot currently manages his B fund in accordance with his personal needs and risk tolerance, what affect will changing from a Defined (guarunteed) Benefit to a Variable Benefit have on a pilots management of his B fund?
I think any prudent financial advisor would recommend you dial back your B fund risk — which will lead to lower returns in that portion of your retirement portfolio. The portion you can pass on to your heirs.
My point - chasing increased returns, by increasing risk, does not come without a cost
11-10-2017, 12:11 PM
#552
Gets Weekends Off
Joined APC: May 2005
Position: FDX MD11 Capt in MEM
Posts: 885
Originally Posted by Raptor
No black helicopters about the weight question when entering the medical. It was there before the false input person too.
The MD-11 Crew Rest Module bunk is limited to 289 pounds. In a few of the planes there are placards with this on it. The company will remove a pilot who enters over 289 when on flights over 12 hours which requires 4 crew members and a class 1 sleep facility. The MD-11 no longer has any over 12 hour routes (used to have some continental USA / Japan routes which were over 12).
For flights under 12 hours, a class 1 sleep facility isn't required, and the RFO seat on the flight deck or the reclining seats in the courier area are suitable rest facilities and don't have that weight limitation.
Does the 777 bunk have a similar restriction?
The MD-11 Crew Rest Module bunk is limited to 289 pounds. In a few of the planes there are placards with this on it. The company will remove a pilot who enters over 289 when on flights over 12 hours which requires 4 crew members and a class 1 sleep facility. The MD-11 no longer has any over 12 hour routes (used to have some continental USA / Japan routes which were over 12).
For flights under 12 hours, a class 1 sleep facility isn't required, and the RFO seat on the flight deck or the reclining seats in the courier area are suitable rest facilities and don't have that weight limitation.
Does the 777 bunk have a similar restriction?
We still do HNL-AKL-SYD. Requires 4 pilots and crew rest facility.
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11-10-2017, 12:37 PM
#553
Gets Weekends Off
Joined APC: Nov 2005
Position: 757 Capt
Posts: 2,418
How about flashing back to the Initial Rumor...and read the verbiage re-hurdle rate
https://www.soa.org/News-and-Publica...olatility.aspx
https://www.soa.org/News-and-Publica...olatility.aspx
11-10-2017, 03:30 PM
#554
Gets Weekends Off
Joined APC: Mar 2017
Posts: 100
I have said it before...I will say it again. MOMENTUM!! The union has invested time and money in this project. And more than that, it is a PRIDE issue. They have to sell it now because to do otherwise would require them to admit they were wrong. This thing has a life of its own now.
I attended one of the hub turn meetings. I was also surprised how many times the doomsday scenario was brought up. Sure, FedEx could go bankrupt but I will take my chances.
Again, there is an easy fix without recreating the wheel:
Step 1: Leave the A Plan intact as it is.
Step 2: Make systematic improvements to our current B Plan, to include a new "cash-over-the-cap" provision. The purpose of this would be to offset the effects of inflation over time on the A Plan.
I attended one of the hub turn meetings. I was also surprised how many times the doomsday scenario was brought up. Sure, FedEx could go bankrupt but I will take my chances.
Again, there is an easy fix without recreating the wheel:
Step 1: Leave the A Plan intact as it is.
Step 2: Make systematic improvements to our current B Plan, to include a new "cash-over-the-cap" provision. The purpose of this would be to offset the effects of inflation over time on the A Plan.
11-10-2017, 06:25 PM
#555
Bourgeoisie
Joined APC: Aug 2006
Position: 787 SO
Posts: 616
Originally Posted by mempurpleflyer
I have said it before...I will say it again. MOMENTUM!! The union has invested time and money in this project. And more than that, it is a PRIDE issue. They have to sell it now because to do otherwise would require them to admit they were wrong. This thing has a life of its own now.
I attended one of the hub turn meetings. I was also surprised how many times the doomsday scenario was brought up. Sure, FedEx could go bankrupt but I will take my chances.
Again, there is an easy fix without recreating the wheel:
Step 1: Leave the A Plan intact as it is.
Step 2: Make systematic improvements to our current B Plan, to include a new "cash-over-the-cap" provision. The purpose of this would be to offset the effects of inflation over time on the A Plan.
I attended one of the hub turn meetings. I was also surprised how many times the doomsday scenario was brought up. Sure, FedEx could go bankrupt but I will take my chances.
Again, there is an easy fix without recreating the wheel:
Step 1: Leave the A Plan intact as it is.
Step 2: Make systematic improvements to our current B Plan, to include a new "cash-over-the-cap" provision. The purpose of this would be to offset the effects of inflation over time on the A Plan.
Professionally managed, tax advantaged, inflation hedged, pooled risk with no BS earnings cap and no years of service cap? I want to hear more...
11-10-2017, 07:51 PM
#556
Gets Weekends Off
Joined APC: Jul 2007
Position: Gear Monkey
Posts: 3,191
Originally Posted by MEMFO4Ever
Yeah, because our pilots are awesome at financial planning, just ask them.
Professionally managed, tax advantaged, inflation hedged, pooled risk with no BS earnings cap and no years of service cap? I want to hear more...
Professionally managed, tax advantaged, inflation hedged, pooled risk with no BS earnings cap and no years of service cap? I want to hear more...
Do you think our “B fund assets” are inflation hedged?
Has the union stated no earnings cap?
In a July hubturn mtg it was briefly stated the cap “may” go as high as $315K, but I hadn’t heard unlimited
Similarity, no YOS cap? Source please
Thanks
Last edited by DLax85; 11-10-2017 at 08:10 PM.
11-11-2017, 02:29 AM
#557
Gets Weekends Off
Joined APC: Aug 2006
Posts: 1,820
Originally Posted by MEMFO4Ever
Yeah, because our pilots are awesome at financial planning, just ask them.
Professionally managed, tax advantaged, inflation hedged, pooled risk with no BS earnings cap and no years of service cap? I want to hear more...
Professionally managed, tax advantaged, inflation hedged, pooled risk with no BS earnings cap and no years of service cap? I want to hear more...
The earnings cap should be the max hourly rate times 1000.
11-11-2017, 04:41 AM
#558
Line Holder
Joined APC: Jul 2007
Position: B767/CPT
Posts: 56
Fellow pilots are you reading the information available? Who is guaranteed more in retirement if a new plan is put into place? Who assumes the risk? Why now, instead of next contract?
Who is guaranteed gains? Pilots with 25 years of service and a maximum high 5 earnings. Watch the MEC video where the MEC Chairman states we must do something to provide for those retiring who have already maxed out their retirements, it is a “moral obligation”.
Who pays for this increase? Certainly not Fedex. Fedex has already proven, many times, they give nothing away. So where does it come from? It is not hard to figure out. Any change in current retirement benefits prior to the implementation of a new contract will result in significant cost savings to Fedex. Unfulfilled gains in high 5 averages and longevity toward retirement are voluntarily frozen, an Accumulated Benefit Option (ABO) is then calculated. It has already been demonstrated in a previous post that accumulated retirement benefits will increase substantially for most individuals, if thing are simply not changed prior to next contract. Second, payments into a new plan, according to Variable Benefit Consultants, will almost never be underfunded, so monies now paid, or future penalties, if incurred, in the form of variable rate premiums to the PBGC are negated. These penalties are set to increase substantially. Investment risk is now transferred from Fedex to the individual pilot and retiree. How much is that worth?
Examples set forth by proponents of these plans demonstrates significant fluctuations in retirement income due to plan performance. A link to soa.org in a previous post shows a difference of 48% in retirement payout volatility , for the same estimated value, due to timing. To paraphrase, an 2003 retiree with an estimated $1000 monthly benefit received the following, 2008 $1358, 2009 $966 and 2012 $1121. Conversely, a person retiring in 2008 with the same $1000 monthly benefit received the following, 2009 $711 and in 2012. $825. So if you base your retirement on $10000 a month, can you accept $7100 in the hopes that you might make $13580? Also notice an individual who retired 5 years earlier than you, with the same estimated benefit is making 27% more than you in 2012. One must very aware that many groups under these plans have no regulated retirement age and can elect to work through market turmoil. For us, the merry go round stops at 65, good or bad economy.
A previous poster referred to the PowerPoint presentation and referenced how risk was pictorially depicted, it was particularly telling, when the company assumes risk, it is large and burdensome, but when we as pilots assume risk it is small and balanced. Doesn’t seem that way in the previous paragraph.
This needs to be stopped, Fedex estimates approximately 780 pilot will reach the regulated retirement age by the end of 2022, an optimistic date for a new contract to be ratified. Is it really necessary that 4000 pilots put their retirement security in jeopardy to finance an even greater benefit to the most financially rewarded group of pilots to ever work at Fedex.
Who is guaranteed gains? Pilots with 25 years of service and a maximum high 5 earnings. Watch the MEC video where the MEC Chairman states we must do something to provide for those retiring who have already maxed out their retirements, it is a “moral obligation”.
Who pays for this increase? Certainly not Fedex. Fedex has already proven, many times, they give nothing away. So where does it come from? It is not hard to figure out. Any change in current retirement benefits prior to the implementation of a new contract will result in significant cost savings to Fedex. Unfulfilled gains in high 5 averages and longevity toward retirement are voluntarily frozen, an Accumulated Benefit Option (ABO) is then calculated. It has already been demonstrated in a previous post that accumulated retirement benefits will increase substantially for most individuals, if thing are simply not changed prior to next contract. Second, payments into a new plan, according to Variable Benefit Consultants, will almost never be underfunded, so monies now paid, or future penalties, if incurred, in the form of variable rate premiums to the PBGC are negated. These penalties are set to increase substantially. Investment risk is now transferred from Fedex to the individual pilot and retiree. How much is that worth?
Examples set forth by proponents of these plans demonstrates significant fluctuations in retirement income due to plan performance. A link to soa.org in a previous post shows a difference of 48% in retirement payout volatility , for the same estimated value, due to timing. To paraphrase, an 2003 retiree with an estimated $1000 monthly benefit received the following, 2008 $1358, 2009 $966 and 2012 $1121. Conversely, a person retiring in 2008 with the same $1000 monthly benefit received the following, 2009 $711 and in 2012. $825. So if you base your retirement on $10000 a month, can you accept $7100 in the hopes that you might make $13580? Also notice an individual who retired 5 years earlier than you, with the same estimated benefit is making 27% more than you in 2012. One must very aware that many groups under these plans have no regulated retirement age and can elect to work through market turmoil. For us, the merry go round stops at 65, good or bad economy.
A previous poster referred to the PowerPoint presentation and referenced how risk was pictorially depicted, it was particularly telling, when the company assumes risk, it is large and burdensome, but when we as pilots assume risk it is small and balanced. Doesn’t seem that way in the previous paragraph.
This needs to be stopped, Fedex estimates approximately 780 pilot will reach the regulated retirement age by the end of 2022, an optimistic date for a new contract to be ratified. Is it really necessary that 4000 pilots put their retirement security in jeopardy to finance an even greater benefit to the most financially rewarded group of pilots to ever work at Fedex.
11-11-2017, 05:14 AM
#559
Gets Weekends Off
Joined APC: Mar 2012
Position: Two Wheeler FrontSeat
Posts: 1,162
Originally Posted by UnskilledFXer
Fellow pilots are you reading the information available? Who is guaranteed more in retirement if a new plan is put into place? Who assumes the risk? Why now, instead of next contract?
Who is guaranteed gains? Pilots with 25 years of service and a maximum high 5 earnings. Watch the MEC video where the MEC Chairman states we must do something to provide for those retiring who have already maxed out their retirements, it is a “moral obligation”.
Who pays for this increase? Certainly not Fedex. Fedex has already proven, many times, they give nothing away. So where does it come from? It is not hard to figure out. Any change in current retirement benefits prior to the implementation of a new contract will result in significant cost savings to Fedex. Unfulfilled gains in high 5 averages and longevity toward retirement are voluntarily frozen, an Accumulated Benefit Option (ABO) is then calculated. It has already been demonstrated in a previous post that accumulated retirement benefits will increase substantially for most individuals, if thing are simply not changed prior to next contract. Second, payments into a new plan, according to Variable Benefit Consultants, will almost never be underfunded, so monies now paid, or future penalties, if incurred, in the form of variable rate premiums to the PBGC are negated. These penalties are set to increase substantially. Investment risk is now transferred from Fedex to the individual pilot and retiree. How much is that worth?
Examples set forth by proponents of these plans demonstrates significant fluctuations in retirement income due to plan performance. A link to soa.org in a previous post shows a difference of 48% in retirement payout volatility , for the same estimated value, due to timing. To paraphrase, an 2003 retiree with an estimated $1000 monthly benefit received the following, 2008 $1358, 2009 $966 and 2012 $1121. Conversely, a person retiring in 2008 with the same $1000 monthly benefit received the following, 2009 $711 and in 2012. $825. So if you base your retirement on $10000 a month, can you accept $7100 in the hopes that you might make $13580? Also notice an individual who retired 5 years earlier than you, with the same estimated benefit is making 27% more than you in 2012. One must very aware that many groups under these plans have no regulated retirement age and can elect to work through market turmoil. For us, the merry go round stops at 65, good or bad economy.
A previous poster referred to the PowerPoint presentation and referenced how risk was pictorially depicted, it was particularly telling, when the company assumes risk, it is large and burdensome, but when we as pilots assume risk it is small and balanced. Doesn’t seem that way in the previous paragraph.
This needs to be stopped, Fedex estimates approximately 780 pilot will reach the regulated retirement age by the end of 2022, an optimistic date for a new contract to be ratified. Is it really necessary that 4000 pilots put their retirement security in jeopardy to finance an even greater benefit to the most financially rewarded group of pilots to ever work at Fedex.
Who is guaranteed gains? Pilots with 25 years of service and a maximum high 5 earnings. Watch the MEC video where the MEC Chairman states we must do something to provide for those retiring who have already maxed out their retirements, it is a “moral obligation”.
Who pays for this increase? Certainly not Fedex. Fedex has already proven, many times, they give nothing away. So where does it come from? It is not hard to figure out. Any change in current retirement benefits prior to the implementation of a new contract will result in significant cost savings to Fedex. Unfulfilled gains in high 5 averages and longevity toward retirement are voluntarily frozen, an Accumulated Benefit Option (ABO) is then calculated. It has already been demonstrated in a previous post that accumulated retirement benefits will increase substantially for most individuals, if thing are simply not changed prior to next contract. Second, payments into a new plan, according to Variable Benefit Consultants, will almost never be underfunded, so monies now paid, or future penalties, if incurred, in the form of variable rate premiums to the PBGC are negated. These penalties are set to increase substantially. Investment risk is now transferred from Fedex to the individual pilot and retiree. How much is that worth?
Examples set forth by proponents of these plans demonstrates significant fluctuations in retirement income due to plan performance. A link to soa.org in a previous post shows a difference of 48% in retirement payout volatility , for the same estimated value, due to timing. To paraphrase, an 2003 retiree with an estimated $1000 monthly benefit received the following, 2008 $1358, 2009 $966 and 2012 $1121. Conversely, a person retiring in 2008 with the same $1000 monthly benefit received the following, 2009 $711 and in 2012. $825. So if you base your retirement on $10000 a month, can you accept $7100 in the hopes that you might make $13580? Also notice an individual who retired 5 years earlier than you, with the same estimated benefit is making 27% more than you in 2012. One must very aware that many groups under these plans have no regulated retirement age and can elect to work through market turmoil. For us, the merry go round stops at 65, good or bad economy.
A previous poster referred to the PowerPoint presentation and referenced how risk was pictorially depicted, it was particularly telling, when the company assumes risk, it is large and burdensome, but when we as pilots assume risk it is small and balanced. Doesn’t seem that way in the previous paragraph.
This needs to be stopped, Fedex estimates approximately 780 pilot will reach the regulated retirement age by the end of 2022, an optimistic date for a new contract to be ratified. Is it really necessary that 4000 pilots put their retirement security in jeopardy to finance an even greater benefit to the most financially rewarded group of pilots to ever work at Fedex.
Well said, let’s hope 51% or more of the crew force think like you do.
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