Retirement Q and A #3 Question
#71
China Visa Applicant
Joined APC: Oct 2006
Position: Midfield downwind
Posts: 1,920
He said that it was a 4:1 ratio -- for every dollar in benefit that the company gave to an individual's A plan, it cost 4 dollars in extra obligation required by the government.
#72
Gets Weekends Off
Joined APC: Aug 2006
Posts: 1,820
Chuck said in both of his Hub briefings that, when the MEC was granted access to the company books, that the numbers management quoted during contract negotiations regarding the increased costs were actually accurate.
He said that it was a 4:1 ratio -- for every dollar in benefit that the company gave to an individual's A plan, it cost 4 dollars in extra obligation required by the government.
He said that it was a 4:1 ratio -- for every dollar in benefit that the company gave to an individual's A plan, it cost 4 dollars in extra obligation required by the government.
Do I think that it is more expensive than a dollar for dollar expense, yes. But that is due to them dragging their feet in negotiations. My belief is that most of that expense is in catch-up contributions. If a pilot already has 25 years and can retire and you want to add $30K for life to his retirement, it is going to cost more than a one time $30K payment. Do you really think that for every dollar we get in retirement, the company pays $4 dollars in fees to the government?
Two years ago, the plan was overfunded by 15%. 15% of $130k is almost $20K. Why couldn't they have used the overfunding to pay for the increase and then fund accordingly after that?
Chuck said doesn't cut it for me!
#73
Gets Weekends Off
Joined APC: Nov 2016
Posts: 936
CD also said that we would be presented with the pro's and con's of different options when this whole thing started. That wasn't true. How many other things has the MEC told us that turned out to not be true?
Do I think that it is more expensive than a dollar for dollar expense, yes. But that is due to them dragging their feet in negotiations. My belief is that most of that expense is in catch-up contributions. If a pilot already has 25 years and can retire and you want to add $30K for life to his retirement, it is going to cost more than a one time $30K payment. Do you really think that for every dollar we get in retirement, the company pays $4 dollars in fees to the government?
Two years ago, the plan was overfunded by 15%. 15% of $130k is almost $20K. Why couldn't they have used the overfunding to pay for the increase and then fund accordingly after that?
Chuck said doesn't cut it for me!
Do I think that it is more expensive than a dollar for dollar expense, yes. But that is due to them dragging their feet in negotiations. My belief is that most of that expense is in catch-up contributions. If a pilot already has 25 years and can retire and you want to add $30K for life to his retirement, it is going to cost more than a one time $30K payment. Do you really think that for every dollar we get in retirement, the company pays $4 dollars in fees to the government?
Two years ago, the plan was overfunded by 15%. 15% of $130k is almost $20K. Why couldn't they have used the overfunding to pay for the increase and then fund accordingly after that?
Chuck said doesn't cut it for me!
#74
Gets Weekends Off
Joined APC: Aug 2006
Posts: 1,820
Do you think it costs the company $4 for every $1 increase in the DB plan for a new hire? The investment required to reach $160k over $130k is about 15% higher. So for every dollar put in now, a new hire would cost the company $1.15 to get to $160k.
Last edited by pinseeker; 01-01-2018 at 10:51 AM.
#75
We are big boys - show us the math!!
Speak specifically with facts?
Yes - DB Plan Return on Assets projections have been going down for years, making such plans more expensive
Investment return formulas are based on geometric growth, not simple linear growth
However, it’s also true pilots are retiring later.
How much later? They have the exact data - share it!
The # of payouts during retirement has been reduced.
Show us the exact mortality table assumptions FedEx actuaries use
If anything, they are less than the Federal Unisex tables because our pilot group is less than 10% females. Under federal law they can use different tables when they can show the covered work group has specific demographics
FedEx knows the actual mortality of All FedEx pilots who have retired and passed away. I think ALPA may have this data as well
Share it!
My guess (looking around the AOC), on average, we die earlier.
The health of our A plan is public knowledge and sent to every pilot every year
Yes - in 2006, our plan was underfunded
In 2016 - it was funded over 100%. They borrowed some money to plus up the plan. Public knowledge. But, that was prudent due to lowest interest rates and how well our earnings and our stock has been performing.
While I don’t believe the company will agree to raise $260K cap to current IRS limits, I believe there is an opportunity for an increase.
The new corporate tax breaks will significantly increase after-tax profits.
If you think pilots fly extra and fly longer now, just wait until the new Variable Benefit formula is released.
Remember “Every $ and Every Year Counts”
Say goodbye to the “High 5” concept
We will end up working harder and longer for the same benefit - and then be responsible for the investment risk as well
Speak specifically with facts?
Yes - DB Plan Return on Assets projections have been going down for years, making such plans more expensive
Investment return formulas are based on geometric growth, not simple linear growth
However, it’s also true pilots are retiring later.
How much later? They have the exact data - share it!
The # of payouts during retirement has been reduced.
Show us the exact mortality table assumptions FedEx actuaries use
If anything, they are less than the Federal Unisex tables because our pilot group is less than 10% females. Under federal law they can use different tables when they can show the covered work group has specific demographics
FedEx knows the actual mortality of All FedEx pilots who have retired and passed away. I think ALPA may have this data as well
Share it!
My guess (looking around the AOC), on average, we die earlier.
The health of our A plan is public knowledge and sent to every pilot every year
Yes - in 2006, our plan was underfunded
In 2016 - it was funded over 100%. They borrowed some money to plus up the plan. Public knowledge. But, that was prudent due to lowest interest rates and how well our earnings and our stock has been performing.
While I don’t believe the company will agree to raise $260K cap to current IRS limits, I believe there is an opportunity for an increase.
The new corporate tax breaks will significantly increase after-tax profits.
If you think pilots fly extra and fly longer now, just wait until the new Variable Benefit formula is released.
Remember “Every $ and Every Year Counts”
Say goodbye to the “High 5” concept
We will end up working harder and longer for the same benefit - and then be responsible for the investment risk as well
#76
China Visa Applicant
Joined APC: Oct 2006
Position: Midfield downwind
Posts: 1,920
Just because they've changed their mind since CD spoke doesn't mean that he was telling a lie when he said it. Nor does a change in effort mean that datapoints discussed in those meetings are at all questionable. There were more than one MEC member in those Hub meetings who had the actual dirty details of the 4:1 ratio, and I'm sure if you were actually interested in knowing more of the mechanics behind that number, you could ask the MEC for specifics rather than casting doubt around on APC without specific basis.
Again, instead of having an unfounded suspicion about what the root behind that 4:1 ratio is, why not actually ask the guys who saw the company's books? Repeatedly, the MEC has said, "if you have questions, ask us." So why not take 'em up on the offer if you are suspicious of the explanation?
#77
Gets Weekends Off
Joined APC: Nov 2016
Posts: 936
I think you've got that backwards. They have almost 25 years to put away enough money to raise the limit for the guys that have been hired in the last 2 years. The guys that can retire in the next 0-5 years require a much hire contribution per pilot to keep the DB plan funded.
Do you think it costs the company $4 for every $1 increase in the DB plan for a new hire? The investment required to reach $160k over $130k is about 15% higher. So for every dollar put in now, a new hire would cost the company $1.15 to get to $160k.
Do you think it costs the company $4 for every $1 increase in the DB plan for a new hire? The investment required to reach $160k over $130k is about 15% higher. So for every dollar put in now, a new hire would cost the company $1.15 to get to $160k.
Can the company afford to increase our pension, you bet. Can they afford to double our salary, you bet. Will they is the question.
#78
New Hire
Joined APC: Aug 2015
Posts: 5
Chuck said in both of his Hub briefings that, when the MEC was granted access to the company books, that the numbers management quoted during contract negotiations regarding the increased costs were actually accurate.
He said that it was a 4:1 ratio -- for every dollar in benefit that the company gave to an individual's A plan, it cost 4 dollars in extra obligation required by the government.
He said that it was a 4:1 ratio -- for every dollar in benefit that the company gave to an individual's A plan, it cost 4 dollars in extra obligation required by the government.
The 4:1 ratio is a benefit that we have already negotiated. As the train has already left the station, cost neutral should be a dramatic increase in our benefit based on the companies numbers. This is a benefit that we have already negotiated and the company has already agreed to, I don't want it frozen, I don't want it negotiated away and I certainly want a greater benefit (cost to the company) than we already have had.
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#79
Gets Weekends Off
Joined APC: Mar 2006
Position: Crewmember
Posts: 1,381
Nope, Don’t have it backwards. They have already funded my pension at 100%. Adding a 25% increase in payout will certainly cost the company money. But adding a new guy increases the liability of the fund by much more. Particularly if they have to project how much your knew cap will be in 30 years. I don’t know what the 4 to 1 ratio involves. I do know that the IPA and UPS went to a gimmick to get around the PGBC funding requirements.
Can the company afford to increase our pension, you bet. Can they afford to double our salary, you bet. Will they is the question.
Can the company afford to increase our pension, you bet. Can they afford to double our salary, you bet. Will they is the question.
This is a money grab by the guys with over 25 years, plain and simple.
Anyone that does not have their 130K on the day the A plan is frozen is getting screwed out of what we were promised when we signed on.
Screwed so the "we've got ours" crowd can get some more.
It is time to rise up and tell the MEC no, hell no, no effing way!
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