New Video-Every $ Earned & Yr Worked Matters?
#21
It was the “at risk” portion of my total FedEx retirement
But I found much comfort that my A fund benefits didn’t decrease at all - they just kept building as my YOS and High 5 increased
Only someone who had already totally maxed the A Plan in YOS and High 5 didn’t gain A fund benefits in 2008
And of course, this is the beauty of our current DB & DC plans - prudent diversification of risk
Moving to a VB + DC plan lowers that diversification, and may force pilots to become more conservative in their DB plans
#22
A VB is NOT a Defined Contribution plan.
A DC, like our B plan, accumulates a set value and when you start Spending out of it...when it’s gone, it’s gone.
The VB is Still a Pension plan. “Your” funds never run out.
Which is why they are still covered by the PBGC, where our B plan is not.
A DC, like our B plan, accumulates a set value and when you start Spending out of it...when it’s gone, it’s gone.
The VB is Still a Pension plan. “Your” funds never run out.
Which is why they are still covered by the PBGC, where our B plan is not.
#23
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Joined APC: Mar 2017
Posts: 100
A fund = Defined Benefit Plan. They take the investment & mortality risk
B fund = Defined Contribution Plan We take the investment & mortality risk
We are currently well diversified. It’s prudent. The Certainty of the A fund allows you (if you chose) to take increased risk with your B fund
New idea...
New A fund= Variable Benefit Plan. We take the risk & they take mortality risk. (It’s a defined contribution plan, but individual pilots can’t individually control the risk)
B fund = same. Defined Contribution Plan. We take the investment & mortality risk
Add up the investment risks? “New idea” is higher total investment risk, but individual pilots can’t control the risk in the VB Fund is taking for them.
New idea total mortality risks are the same
Bottom line - in order to maintain equal total investment risk a pilot would actually need to invest his B fund more conservatively
I don’t think you will see that discussed in any company literature or reflected in their models
But it’s true - talk with any investment advisor
B fund = Defined Contribution Plan We take the investment & mortality risk
We are currently well diversified. It’s prudent. The Certainty of the A fund allows you (if you chose) to take increased risk with your B fund
New idea...
New A fund= Variable Benefit Plan. We take the risk & they take mortality risk. (It’s a defined contribution plan, but individual pilots can’t individually control the risk)
B fund = same. Defined Contribution Plan. We take the investment & mortality risk
Add up the investment risks? “New idea” is higher total investment risk, but individual pilots can’t control the risk in the VB Fund is taking for them.
New idea total mortality risks are the same
Bottom line - in order to maintain equal total investment risk a pilot would actually need to invest his B fund more conservatively
I don’t think you will see that discussed in any company literature or reflected in their models
But it’s true - talk with any investment advisor
But if we go with the VB Plan, we have no baseline. Both of our investment vehicles (VB and DC Plans) both require us to carry all risk. Sure we might make more during the good times but the opposite is true as well. They keep mentioning this "shock absorber". So, are they going to guarantee a minimum 130k benefit for life as a baseline? I don't think so.
#24
Gets Weekends Off
Joined APC: Mar 2017
Posts: 100
A VB is NOT a Defined Contribution plan.
A DC, like our B plan, accumulates a set value and when you start Spending out of it...when it’s gone, it’s gone.
The VB is Still a Pension plan. “Your” funds never run out.
Which is why they are still covered by the PBGC, where our B plan is not.
A DC, like our B plan, accumulates a set value and when you start Spending out of it...when it’s gone, it’s gone.
The VB is Still a Pension plan. “Your” funds never run out.
Which is why they are still covered by the PBGC, where our B plan is not.
VB is still a pension plan: True
"Your" Funds never run out: Really? I guess it is all in how you define funds. Sure, you might get a check a month for life. The question is...how big will that check be? I know what my A Plan check will be. And short of bankruptcy, it is guaranteed.
#25
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Joined APC: Nov 2013
Posts: 2,756
I haven't heard an explanation yet of how they plan to make people whole, who go out on disability, though I admit I haven't read or listened to every single thing about it. Whether there is a minimum of dollars earned credited. Anyone could go out on disability for awhile, whether for a couple of months, years, or permanently. At least your high five still count, and at least you're still accruing longevity. With this plan, you could potentially get nothing credited for that time.
#26
And, if we negotiate a 130k floor to the VB, or a 120k floor. You’d also have guidance regarding your A plan check will be, barring bankruptcy.
Higher the floor, lower the upside. eg. 130 floor 140 ceiling, 120 floor 150 ceiling. (hypothetical examples, in no way intended to be taken as exact numbers)
Might be just me, but if we negotiate a 16-20% Cash Balance plan I think there will be a lot of people willing to accept the additional risk.
And benefits of that 16-20% is that it All grows tax free.
Then the next major goal in S6 is Cash over Cap B plan as well as increasing the 9%
Higher the floor, lower the upside. eg. 130 floor 140 ceiling, 120 floor 150 ceiling. (hypothetical examples, in no way intended to be taken as exact numbers)
Might be just me, but if we negotiate a 16-20% Cash Balance plan I think there will be a lot of people willing to accept the additional risk.
And benefits of that 16-20% is that it All grows tax free.
Then the next major goal in S6 is Cash over Cap B plan as well as increasing the 9%
#27
A VB is NOT a Defined Contribution plan.
A DC, like our B plan, accumulates a set value and when you start Spending out of it...when it’s gone, it’s gone.
The VB is Still a Pension plan. “Your” funds never run out.
Which is why they are still covered by the PBGC, where our B plan is not.
A DC, like our B plan, accumulates a set value and when you start Spending out of it...when it’s gone, it’s gone.
The VB is Still a Pension plan. “Your” funds never run out.
Which is why they are still covered by the PBGC, where our B plan is not.
True, Your “Variable Benefit” never runs out - but the company’s contribution is most certainly “defined”
Your “Variable Benefit” only increases when the plan overperforms, decreases when the plan underperforms
FedEx only loses when our collectively, FedEx pilot, longevity overperforms
Work harder, work longer = greater longevity ??
Man, I wished it worked that way.
#28
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Joined APC: Aug 2006
Posts: 1,820
It reminds me of the Obamacare saying, "we have to approve the bill to see what's in the bill."
#29
And, if we negotiate a 130k floor to the VB, or a 120k floor. You’d also have guidance regarding your A plan check will be, barring bankruptcy.
Higher the floor, lower the upside. eg. 130 floor 140 ceiling, 120 floor 150 ceiling. (hypothetical examples, in no way intended to be taken as exact numbers)
Might be just me, but if we negotiate a 16-20% Cash Balance plan I think there will be a lot of people willing to accept the additional risk.
And benefits of that 16-20% is that it All grows tax free.
Then the next major goal in S6 is Cash over Cap B plan as well as increasing the 9%
Higher the floor, lower the upside. eg. 130 floor 140 ceiling, 120 floor 150 ceiling. (hypothetical examples, in no way intended to be taken as exact numbers)
Might be just me, but if we negotiate a 16-20% Cash Balance plan I think there will be a lot of people willing to accept the additional risk.
And benefits of that 16-20% is that it All grows tax free.
Then the next major goal in S6 is Cash over Cap B plan as well as increasing the 9%
Wow, that was FORCED upon the rest of the non-unionized employees at FedEx years ago.
Please ask them how it worked out for them - especially those who’ve now retired under that plan
I believe the company offered a “cash balance” payout for our A fund as early as the 2006 contract negotiations
I recall the union leadership saying it wasn’t even close to an equitable #. The implied discount rate was way too high.
#30
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Joined APC: Mar 2012
Position: Two Wheeler FrontSeat
Posts: 1,162
And, if we negotiate a 130k floor to the VB, or a 120k floor. You’d also have guidance regarding your A plan check will be, barring bankruptcy.
Higher the floor, lower the upside. eg. 130 floor 140 ceiling, 120 floor 150 ceiling. (hypothetical examples, in no way intended to be taken as exact numbers)
Might be just me, but if we negotiate a 16-20% Cash Balance plan I think there will be a lot of people willing to accept the additional risk.
And benefits of that 16-20% is that it All grows tax free.
Then the next major goal in S6 is Cash over Cap B plan as well as increasing the 9%
Higher the floor, lower the upside. eg. 130 floor 140 ceiling, 120 floor 150 ceiling. (hypothetical examples, in no way intended to be taken as exact numbers)
Might be just me, but if we negotiate a 16-20% Cash Balance plan I think there will be a lot of people willing to accept the additional risk.
And benefits of that 16-20% is that it All grows tax free.
Then the next major goal in S6 is Cash over Cap B plan as well as increasing the 9%
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