DLax85

...And the current “fly-to-you-die” bonus plan.

Another “contract improvement” only open to a select cohort, which magically solved a company manning problem too.

fdx727pilot

I’m leaving (next week) at 60 1/2 under the current bonus plan. No “fly till you die”

mempurpleflyer

Ok. Don't misunderstand what I am saying. I am all for improving the A Plan...if that is possible. All the items you mentioned are great ways to do that...if we can. BUT...

I also do understand the financial pressure that the company is under in maintaining, much less improving, a pension benefit. This is not the company's fault. IRS regulations put in place have made funding pension plans extremely expensive for companies. Now, you may argue that the company can afford it (and I agree), but you can not deny that it is has been made a lot more expensive for them to do so...and through no fault of their own.

Could we improve the A Plan? Probably. I think the company offered that to us in the last round of negotiations in exchange for carving out new hires. We said no. Can it be improved? Probably...but what are we willing to give up for the improvement? Asking the company to improve it and not giving up anything in return is not going to happen.

So, my proposal was a realistic solution for both sides. The current A Plan remains intact for all...including newhires. No doubt it will eventually go away because the benefit will continue to dwindle and it will be frozen during some future negotiation (probably decades down the road). To make up for those yearly losses in purchasing power, we implement a increase in B Plan funding, combined with a "cash over the cap" provision so once a pilot hits the IRS limits for contributions, the rest of the money is paid directly to him/her. The company will be more likely to go with this proposal because it does no increase A Plan spending (due to an increase in benefit) and shifts more of our retirement to a B Plan...which is what they want.

So, in summary:

1. I am all for improving the A Plan. The question is what are we willing to give up to do so? Thinking that the company is going to do it just because they can afford it is not reality. The company offered it last time (my understanding). We said no.

2. I am willing to look at this Variable Benefit Plan only if it contains a benefit floor that is guaranteed. Right now I have 130k guaranteed for life. Could I have more, maybe. But I could also have a lot less. It is the "bird in the hand" analogy. I am willing to accept our current A Plan, even though there may be better paying plans out there, because it is guaranteed. Union likes to sell the "company going bankrupt" scenario. I could happen but I will take my chances.

3. My proposal, while not perfect, seems to address the issues...the loss of retirement monies due to inflation over time...without shifting additional risk to us.

FXDX

I have to respond to this. There is NO floor, unless you have already made your high 5 and 25 yos. Then you have earned the max of the current plan and it is frozen so it can't ever go less. ANYTHING you acquire under the new plan will be a benefit increase.

For the rest of us, who will never be able to reach the high 5 or 25 yos, there is no floor, except for the current benefit we have accrued and will be frozen.

The variable plan does NOT have a floor. Yes, they envision the plan using mythical excess returns to create a superfund (think SS lockbox maybe) that will be used to offset years when returns aren't so good to maintain a certain level of benefit. A kind of hydraulic accumulator as KB likes to describe it at the meetings. Yet, when asked point blank if there is a guaranteed minimum benefit, he has to answer NO. Because there isn't one, and nobody can guarantee that the market will never go down.

He hemmed and hawed and almost screwed himself into the ground trying to explain away that fact and how awful the world would have to be in order for that to happen, you know dogs sleeping with cats, end of the world scenario for that to even maybe ever ever possibly maybe could but probably never would happen.

And remember, IF it did (the market were to decline), you could always defer your retirement until the market rebounded.

On the other hand, he acts like the company going out of business is so likely that we are fools to even consider the option of keeping our A plan as is with the company shouldering all the risk.

Someone asked him how many times the market has declined since 1973 compared to the number of times FedEx has gone bankrupt and he had no answer for that.

This is folly to consider giving up our current A plan benefit. Shame on these guys for trying to sell this plan as an improvement for all of us, its a pipe dream of the super senior guys trying to grab some more cash on their way out the door at the expense of those who haven't and can't get 25 yos and their high 5.

DLax85

...And I salute you!

While everyone has different situations in life and therefore may make different retirement decisions, I thank our union negotiators for ensuring our “full retirement age” under our CBA stayed at 60 after the federal “regulated age” was increased by the government to 65.

We all must choose how to use our time, our money, our sick leave and our vacation.

It’s an independent choice everyone has, along with their seniority rights.

However, let’s be forthright and transparent on how it affects everyone on property. The pilot manning models and monthly BLG targets are simple equations with a few key variables.

Similarly, let’s apply those standards to any discussion of freezing the current DB plan and starting a new VB plan.

The devil is in the details - there will be a lot of interesting assumptions and cherry picked examples in the models provided.

PicklePausePull

Agree! Also, keep an eye on ALPA National's interest in collecting a VB management fee until the day you die. Their only interest in us is more dues money. Money, money, money!

Chargersflyer

I'm not a conspiracy theorist, but ALPA also lives by pattern bargaining. A new Pension plan that appears more like a contribution plan for corporations sounds like a good negotiating tool for the other majors as their DCs start becoming too high of a percentage for companies to stomach. Thus a fancy Variable Pension benefit.


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Nightflyer

Well, except for the fact that the other carriers terminated their pension plans through bankruptcy.

I think UPS and FedEx are the only ones that still have some sort of defined benefit plan, but I might be wrong.

Chargersflyer

We are the few that still have a pension, I am talking about National trying to get a pension back at those places because of this concept. Thus pattern bargaining the other way. The main point of your post in my opinion is their plans were terminated in bankruptcy and we are offering to negotiate ours away. Absurd. And yes, I have contacted my rep.

Nightflyer

Too bad our "reps" think they are smarter than us and don't listen to the people they are supposed to "represent".

At least that has been my experience.