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Old 11-14-2017, 06:29 AM   #11
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Originally Posted by mempurpleflyer View Post
Also ask yourself why we are doing this. We are not being forced into this...this whole idea was our (the union's idea).
Very likely because the fees associated with the management of this plan will provide a revenue stream and financial benefit for the union.
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Old 11-14-2017, 07:03 AM   #12
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Very likely because the fees associated with the management of this plan will provide a revenue stream and financial benefit for the union.

............or a secure post retirement job for current leaders.
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Old 11-14-2017, 07:26 AM   #13
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Unfortunately many are missing the point. This is about securing gains for those retiring under this contract. End of discussion. The only thing left to discuss is who pays for those gains.

Fedex would never consider increasing benefits between contracts, unless it benefits them either monetarily or by securing operational stability. What if we as a pilot group simply said to Fedex, please give more to those retiring under this contract. Nothing for anyone else. We would be laughed out of the room.

So how are gains secured. By releasing the company from their obligated debt, yet to be incurred, secured by this contract. These gains are significant and require Fedex to make substantial payments into the retirement fund to fully fund the retirement obligation or pay significantly increased penalties for underfunding. Second, by assuming risks now totally incurred by the company. Third, by creating a Variable Plan, releasing them of any penalty payments due to underfunding. Such a plan would most likely have a hurdle rate in excess of 5.5% to preclude costs and penalties associated with a hybrid plan. That, in addition to lost capital in the form of total fund management costs, estimated at between 2%-4%, requires high rates of return for the plan to meet long term payout projections. Certain stabilizing mechanisms can be put in place to reduce fund volatility. However, those cost money, and who pays these expenses?

If this was just about increasing retirement benefits, we could explore avenues already mentioned in many of the previous posts on retirement. Unfortunately, that does not address the real reason we are pursuing retirement changes at this specific time.
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Old 11-14-2017, 07:38 AM   #14
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3. The VB plan will have a 50% buffer to absorb severe market downturns. In other words, the stock market would have to decrease in aggregate value 50% for us not to receive 100% payments.
I would like to see that in writing somewhere. Based on that statement, if it costs the company 6 billion dollars to ensure a payout of $130K for life for every pilot, they are going to contribute 9 billion dollars That would be a 50% buffer.

Also, if there was in fact a 50% downturn, that 9 billion would be 4.5 billion, or 25% lower than the 6 billion dollar amount required to make full payouts.

If that is what the smartest guy in the union is selling, we have a problem.
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Old 11-14-2017, 07:43 AM   #15
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Retirement rule #1: Keep your first spouse.
Retirement rule #2: If you broke rule #1, the feeders are hiring Caravan captains.
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Old 11-14-2017, 07:52 AM   #16
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1. No one can TAKE your A plan.
50.1% of the crew force can take it from 49.9%.
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Old 11-14-2017, 09:06 AM   #17
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50.1% of the crew force can take it from 49.9%.
And should this go to vote, I predict it passes! And I bet with a bigger margin than Boyd mentions; and with a high percentage buying what the Union is selling without a critical analysis!

Whoever said they like the shared risk. A plan-Company/B plan-Me. Couldn't agree more! Shacked
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Old 11-14-2017, 09:14 AM   #18
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What year did the B fund start? @ what percent?

Please correct, but off the top of my head, I believe the B fund increased to 6% in 2006

7% in the “bridge contract”

8% in our latest contract

And will go to 9% in 2019

Once again, those with more knowledge & better memory please correct (e.g. Tony C )
Not sure about the increases but the current bfund has a cap, so for many that means you just stop getting contributions earlier in the year. Essentially no inprovement for them.
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Old 11-14-2017, 09:30 AM   #19
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You still get an increase based on cap of $260k x the percentage. So from 8% to 9% it is a $2600 gain approximately.

$260000x.08=$20,800
$260000x.09=$23,400

Increase of$2600 a year.
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Old 11-14-2017, 11:58 AM   #20
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Correct me if I'm wrong, but none of us are anywhere close to the B plan limit of 54k a year, based solely on our 8% plan, limited I believe to 270k income. We would have to have a 20% B plan to hit that limit. Granted, our 401k pretax contributions would be what takes the hit, but we would just get it as taxed income...the full sick bank would still be paid out over and above, just as taxed income...I think there is a lot of room for improvement to the B plan...I may not be accurate on my irs limits, but I believe it's pretty close...
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