Retirement Q and A #3 Question
#11
Gets Weekends Off
Joined APC: Jun 2012
Posts: 112
I really hope these guys do the right thing and find other ways to increase our retirement benefit (Supplementing with a very nice B fund) if an A plan bump is a nonstarter.
#12
Line Holder
Joined APC: Dec 2016
Position: FedEx
Posts: 86
I'm with you and a round of applause goes to the guys pushing it because they are doing a great job shaping it in a way that makes it sound good. They should have been on that show pitch men. I don't care how many times they explain or try to sell it. I and many others understand what a variable benefit is and how it works. Having a finance background, I understand completely what they are trying to do and it is NOT a good deal. It is 100% worse than what we currently have and by worse I mean the risk part is bad bad bad. I cannot believe the leaders of this union are exploring anything that would be worse for the pilots OUTSIDE of contract negotiations.
I really hope these guys do the right thing and find other ways to increase our retirement benefit (Supplementing with a very nice B fund) if an A plan bump is a nonstarter.
I really hope these guys do the right thing and find other ways to increase our retirement benefit (Supplementing with a very nice B fund) if an A plan bump is a nonstarter.
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#13
IMO, The answers to the questions have been purposely vague. Not because the specifics haven’t been negotiated, rather because they are not being transparent in the full answers.
When asked what happens to those who’ve been on property less than 5 years, and therefore not yet vested in the current A plan, they respond by saying those years of service should transfer to the new variable plan for vesting purposes
While that may be true, they are not addressing the real question - what benefit have those pilots accrued under the current defined benefit plan?
(Hint, hint - they aren’t vested yet. Technically, they haven’t accrued any. Perhaps, they will negotiate some lump sum payment..?? The MEC has seen those offers before. Didn’t take them)
This of course, speaks directly to the broader issue of Years of Service (YOS) transfer from the current plan to the new plan for ALL Pilots
YOS won’t transfer. It’s a freeze, then restart
If you haven’t maxed your 25 YOS and High 5 FAE of $260K, you could clearly be disadvantaged compared to keeping the current defined benefiit plan, depending on your current pay rate and years remaining
The switch will effectively block some pilots from applying all of their YOS towards their highest 5 years of pay, if that pay comes in the future under the new/separate variable plan
After doing more outside reading and research, I suspect the new plan may not even be based on a pilots “high 5”, rather over total career average earnings
Remember, a Variable Benefit Plan operates like a Defined Contribution Plan from the company’s perspective
We already have one of those - it’s called the B Fund.
Let’s just all work together to improve it!!
...For Everyone!!
When asked what happens to those who’ve been on property less than 5 years, and therefore not yet vested in the current A plan, they respond by saying those years of service should transfer to the new variable plan for vesting purposes
While that may be true, they are not addressing the real question - what benefit have those pilots accrued under the current defined benefit plan?
(Hint, hint - they aren’t vested yet. Technically, they haven’t accrued any. Perhaps, they will negotiate some lump sum payment..?? The MEC has seen those offers before. Didn’t take them)
This of course, speaks directly to the broader issue of Years of Service (YOS) transfer from the current plan to the new plan for ALL Pilots
YOS won’t transfer. It’s a freeze, then restart
If you haven’t maxed your 25 YOS and High 5 FAE of $260K, you could clearly be disadvantaged compared to keeping the current defined benefiit plan, depending on your current pay rate and years remaining
The switch will effectively block some pilots from applying all of their YOS towards their highest 5 years of pay, if that pay comes in the future under the new/separate variable plan
After doing more outside reading and research, I suspect the new plan may not even be based on a pilots “high 5”, rather over total career average earnings
Remember, a Variable Benefit Plan operates like a Defined Contribution Plan from the company’s perspective
We already have one of those - it’s called the B Fund.
Let’s just all work together to improve it!!
...For Everyone!!
#14
Gets Weekends Off
Joined APC: Mar 2006
Position: Crewmember
Posts: 1,380
So, I am going to make an observation and you can correct me if I am wrong.
If they "freeze" the old plan at your current benefit, and then add in the new variable plan, who gains the most?
It's the guys who already have 25 years and their high 5. They get the guaranteed $130,000K, plus whatever the "extra" amount ends up being.
Note that these are the same guys that benefitted from the age 65 change.
So it seems like the desire on the union's part is to get the "old" guys who will retire before the next contract extra money for their retirement. This, because the union failed to fix it in their last contract negotiation.
For the company to agree to this, they have to save money, or benefit in some manner.
So, once again, the old guys will benefit at the expense of the younger guys, just like happened in the 2006 and 20015 contracts.
The old guys walk out the door with the $130K plus the extra "bonus" money, and the young guys get the "promise" that theirs will be just as good, but have to take on all the risk.
Sound a lot like, "if you like your health plan, you can keep your health plan", and we all know how that turned out.
Young guys, beware.
A better idea is to either 1) raise the high five cap above 260K, and after this tax deal is passed, the company CAN afford it, and 2) plus up the B fund, and make the B fund cash over cap, which should have been done this last contract.
I am tired of the union leadership trying to put something over on the crew force, and that seems to be exactly what they are doing, once again, in this case.
If they "freeze" the old plan at your current benefit, and then add in the new variable plan, who gains the most?
It's the guys who already have 25 years and their high 5. They get the guaranteed $130,000K, plus whatever the "extra" amount ends up being.
Note that these are the same guys that benefitted from the age 65 change.
So it seems like the desire on the union's part is to get the "old" guys who will retire before the next contract extra money for their retirement. This, because the union failed to fix it in their last contract negotiation.
For the company to agree to this, they have to save money, or benefit in some manner.
So, once again, the old guys will benefit at the expense of the younger guys, just like happened in the 2006 and 20015 contracts.
The old guys walk out the door with the $130K plus the extra "bonus" money, and the young guys get the "promise" that theirs will be just as good, but have to take on all the risk.
Sound a lot like, "if you like your health plan, you can keep your health plan", and we all know how that turned out.
Young guys, beware.
A better idea is to either 1) raise the high five cap above 260K, and after this tax deal is passed, the company CAN afford it, and 2) plus up the B fund, and make the B fund cash over cap, which should have been done this last contract.
I am tired of the union leadership trying to put something over on the crew force, and that seems to be exactly what they are doing, once again, in this case.
#15
Gets Weekends Off
Joined APC: Mar 2017
Posts: 100
I'm with you and a round of applause goes to the guys pushing it because they are doing a great job shaping it in a way that makes it sound good. They should have been on that show pitch men. I don't care how many times they explain or try to sell it. I and many others understand what a variable benefit is and how it works. Having a finance background, I understand completely what they are trying to do and it is NOT a good deal. It is 100% worse than what we currently have and by worse I mean the risk part is bad bad bad. I cannot believe the leaders of this union are exploring anything that would be worse for the pilots OUTSIDE of contract negotiations.
I really hope these guys do the right thing and find other ways to increase our retirement benefit (Supplementing with a very nice B fund) if an A plan bump is a nonstarter.
I really hope these guys do the right thing and find other ways to increase our retirement benefit (Supplementing with a very nice B fund) if an A plan bump is a nonstarter.
Step 1: Do nothing (bargaining with the company) until the next round of
Section 6 negotiations
Step 2: Keep the current A Plan as it is
Step 3: Bargain for a "Cash over the Cap" provision just like everyone else
has
Step 4: Slowly increase the B Fund contribution made by the company to
replace the loss of A Fund purchasing power.
This plan is a win-win. The company eventually will get rid of the A Plan when it has lost all of its value (years down the road) and the pilots maintain the retirement package benefit without accepting additional risk.
Step 2:
#16
Gets Weekends Off
Joined APC: Mar 2017
Posts: 100
So, I am going to make an observation and you can correct me if I am wrong.
If they "freeze" the old plan at your current benefit, and then add in the new variable plan, who gains the most?
It's the guys who already have 25 years and their high 5. They get the guaranteed $130,000K, plus whatever the "extra" amount ends up being.
Note that these are the same guys that benefitted from the age 65 change.
So it seems like the desire on the union's part is to get the "old" guys who will retire before the next contract extra money for their retirement. This, because the union failed to fix it in their last contract negotiation.
For the company to agree to this, they have to save money, or benefit in some manner.
So, once again, the old guys will benefit at the expense of the younger guys, just like happened in the 2006 and 20015 contracts.
The old guys walk out the door with the $130K plus the extra "bonus" money, and the young guys get the "promise" that theirs will be just as good, but have to take on all the risk.
Sound a lot like, "if you like your health plan, you can keep your health plan", and we all know how that turned out.
Young guys, beware.
A better idea is to either 1) raise the high five cap above 260K, and after this tax deal is passed, the company CAN afford it, and 2) plus up the B fund, and make the B fund cash over cap, which should have been done this last contract.
I am tired of the union leadership trying to put something over on the crew force, and that seems to be exactly what they are doing, once again, in this case.
If they "freeze" the old plan at your current benefit, and then add in the new variable plan, who gains the most?
It's the guys who already have 25 years and their high 5. They get the guaranteed $130,000K, plus whatever the "extra" amount ends up being.
Note that these are the same guys that benefitted from the age 65 change.
So it seems like the desire on the union's part is to get the "old" guys who will retire before the next contract extra money for their retirement. This, because the union failed to fix it in their last contract negotiation.
For the company to agree to this, they have to save money, or benefit in some manner.
So, once again, the old guys will benefit at the expense of the younger guys, just like happened in the 2006 and 20015 contracts.
The old guys walk out the door with the $130K plus the extra "bonus" money, and the young guys get the "promise" that theirs will be just as good, but have to take on all the risk.
Sound a lot like, "if you like your health plan, you can keep your health plan", and we all know how that turned out.
Young guys, beware.
A better idea is to either 1) raise the high five cap above 260K, and after this tax deal is passed, the company CAN afford it, and 2) plus up the B fund, and make the B fund cash over cap, which should have been done this last contract.
I am tired of the union leadership trying to put something over on the crew force, and that seems to be exactly what they are doing, once again, in this case.
#18
#20
I have been saying this all along. The plan is simple. Not sure why we have to make this so difficult:
Step 1: Do nothing (bargaining with the company) until the next round of
Section 6 negotiations
Step 2: Keep the current A Plan as it is
Step 3: Bargain for a "Cash over the Cap" provision just like everyone else
has
Step 4: Slowly increase the B Fund contribution made by the company to
replace the loss of A Fund purchasing power.
This plan is a win-win. The company eventually will get rid of the A Plan when it has lost all of its value (years down the road) and the pilots maintain the retirement package benefit without accepting additional risk.
Step 2:
No. No. No.
Do NOT give up on improving our A Plan. Your Step 2, Keep the current A Plan as it is, is defeatest. The Company wants to defeat us, and the MEC is trying to negotiate our defeat.
IMPROVE our A Plan, raise the FAE Cap to match our earning potential and the IRS limit. IMPROVE our A Plan by establishing a COLA-like mechanism to protect the retirement benefit from inflation.
We should improve our B Fund also, but there is no way a B Fund, even with cash over the cap, can replace the value of the A Plan we should have.
.
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