DLax85

To increase the A fund benefit under our current formula you can only raise three variables:

The High 5 Cap - currently $260K

The multiplier - currently 2%

The total YOS - currently 25 yrs

We’re told the company refuses to raise the Cap, though I think they may except it indexed to a moderate metric within our pay system

Our multiplier already exceeds our closest competitor (UPS multiplier is 1%)

Our YOS is less (UPS max YOS is 30 years)

Many guys are already staying beyond age 60. I’ve heard the avg retirement age at FedEx is now 64.

Everyone has a right to make their own choice.

Allowing 1% multipliers for years 26-30, would increase max benefit from 50% to 55%, which is a 10% increase ($143K vs $130K)

Allowing 1% multipliers to 35 years, would increase max benefit to 60%, which is a 20% increase ($156K)

These would be immediate significant improvements which would help offset inflation worries for those retiring soon

This increase in a YOS would recognize the fact many pilots are already working longer (past 60), which gives FedEx more time to fund their retirement, while shortening their retirement payout

Combined with a slowly increased indexed cap, the A fund could increase in value across the spectrum in the longer term

Providing additional B bumps could help everyone as well, in the long term

I think the idea that wide-body, International Captains who make $400K per year are going to get a 50% income replacement gaurunteed during retirement is a bit far fetched

Is there a more moderate goal that will help alll of us?

An improvement in our “Total Retirement” can address many valid issues.

It doesn’t need be devisive or decrease pilot QOL vs pay flexibility

It doesn’t need to involve wholesale changes which increase investment risk

The whole point of all of this debate is to point out there are many innovative ways to improve our retirement which our leadership should explore fully, then present to the membership for discussion and feedback

This simply hasn’t been done.

StarClipper

And how does this help the guy who is not willing to go past 60 or Work Till You Die age.

DLax85

A multifaceted approach to improving our Total Retirement addresses different pilot cohorts in different ways, and prevents the unions sole focus on freezing the current plan & restarting under a new variable plan

It may provide different size winners, but not divide the crew force into winners & losers

It wouldn’t renege on the benefits formula expected by our current A plan

Listen to the different arguments for wanting improvements in the A plan (...larger cap, inflation hedge, recognition of those who are hired younger and/or work younger)

They are varied, but can be addressed with a mixed solution using our current plan structures

I believe indexing the A fund and increasing the B fund percentages will also be critical to this multifaceted approach

This will also benefit those who want to maintain pilot career path flexibility, or not fiy beyond age 60, or not beyond 25 YOS.


Different cohorts will benefit in different ways from the different improvements, but none will be directly penalized in order to increase the benefits for other demographic groups

pinseeker

I think your numbers are a little off. The most that Delta can contribute each year to a pilots 401k is $42400. If a pilot got that contribution every year (they wouldn't get the $42400 until their income reached $265K) for 25 years at a 7% ROI, they would have $2.6 million in their 401K. That's about what it costs to fund our A plan. Now they get cash over cap, which everyone talks about, but which cap? Our B plan using the same numbers would be worth about $1.6 million, $900K more than what you say their profit sharing is worth. Does the cash over cap make up that $900K?

The point is, our current plan is not worse than Delta's plan. And our $130K is guaranteed. Can you guarantee a 7% ROI? The DOW has averaged 7% since 1988, but that is using the big gains the DOW made this year.

kronan

Some people are a special kind of stupid.

But here goes, for our troll,

At 25 years our hypothetical new-hire would have a ballpark 2.7M or approx 108k a year.

Again, that assumes NO raises over the last 27 years of his\her career.

Why would FedEx go for a 20% fixed cash balance plan...because it reduces uncertainty. That's why many\most Fortune 500 companies have transitioned to a Cash Balance pension, if they haven't frozen them entirely and transitioned to a 401k Defined Compensation plan.

QOL--as a 50% NB Capt, can tell you my QOL is great. As an 80-90% QOL NB Capt, I can tell you my QOL was great. 80-90% WB Capt, all I can tell you is my buds love it-and think their QOL is great.

We are hiring, and forecast to continue to hire, close to 100% of the NB FO manning for quite awhile. The Upgrade timing a 2006-2014 folks have experienced will be radically different from our current newbies, just as it was for the Postal new hires.

As a postal new hire, I could've held 72 Capt about 4 years in. Would've been bumped back to WB FO, but still could've been a Capt for 2-3 years prior to the Age Change downgrades flowing to completion.

And, Compensation\QOL is dependent upon many,many variables. Quite possible as a WB FO to earn more than a NB Capt and enjoy great QOL. Similar is true from the NB FO to WB FO, 1 step upward segment.

Greatest QOL\Earnings potential is living in Memphis and avoiding First Fly...and if you don't get launched, being willing to suck up the odd Draft trip each month. Or bid Carry-over R days and then not protect min days off.

Also great QOL is the ability, if you're lucky, to hold trips that layover at home as a commuter. Especially if you can hold CO. Especially if you are fortunate enough to have a Weekend Layover possibility. If you've got that, why wouldn't you want to minimize your Vacation usage and sell up to 40% of it back (can be pretty painless to do so in some circumstances)

As to Investment return at 6% being Unrealistic...I'd suggest we immediately write our FC's and point out how idiotic our company is for reducing it's expected return on Pension assets to 6.5%

Professional Investment companies don't tend to chase returns the way many private investors do, which leads to higher returns over time.


FedEx - FedEx Corp. Adopts Mark-to-Market Pension Accounting

kronan

Add in the potential for a lump sum payout...and I'd think you'd gain all of the folks who have opined they'd much rather have a 16% cash over cap B plan only as well. (Pay absolutely no attention to the fact that such a plan in NO Way comes close to matching the benefits of our Current A plan\B plan mix)

But again, I've read time over time that at least the $$ would be in their names vice company hands and available as an inheritance

FXLAX

To improve the total retirement package they can increase the cap on the YOS, increase the multiplier, increase the high five cap of 260, index the high five, cash over cap, increase the company b fund contribution, or a combination thereof. But the only one which incentivizes pilots to stay longer is increasing the YOS. Even if it only increases average longevity one year, isn’t that something we are trying not to incentivize? All the other choices, combined or not, would provide an immediate improvement to everyone without incentivizing increased longevity.

dckozak

And any of these would make all Fedex pilots winners. Only improvements to the A portion of the plan will have any meaningful effect of near term retirees.

And it ain't gonna happen......

All or any of these improvements will cost $$$. WE signed an agreement that goes another, what 3 years (or is it 4? ?) that bake in the companies crew costs. They made it very clear that they were not going to improve the A plan. It is static, which in a world which some inflation is the reality, it is regressive. Several posters here think just because they haven't hit their 25yos that no changes should be made to the A plan. I guess after they reach thier caps than they will support some other change to make up for the diminishing value of this plan.

I don't see any way the company agrees to change the A plan that costs more money than contract 2016 agrees to. Despite what some have alluded, no one near retirement stands gain much or anything from changes to the current A B setup we currently have. The company in no way is going to continue to give years of service credit and provide an alternative path to supplement the variable (B) portion of our retirement. I get that guys with multiple years of service left are worried about how freezing one part of their retirement will jibe with a new plan with more risk baked into the crew portion of your retirement. One way or another, do something or do nothing, your going to be affected. I wish truly that Fedex would improve the cap on the high 5, it would affect all positively, near term retirees and everyone junior with years to go. We voted in the POS contract that froze the A plan and now we all need to do something to improve it. I personally have only a small dog in this fight.

For those who want no changes because you haven't reached 25yos, be careful what your wish of. Your going to be living on the diminished A plan benefit longer than I. You better hope your B plan money grows as it has without a hiccup. Looking at the past, I think its a poorly placed bet.

Fdxlag2

I am a little confused you can be worried about B Fund performance but not concerned about variable benefit performance? You’re betting on the same pony.

dckozak

Yes I worry about all facets of our plan. I think a gold standard A plan which truly provides a 50% of my final best 5 years for a lifetime is truly what made Fedex retirement a standout above all others. Obviously Fedex doesn't see having the best retirement in the industry the same way we do. I don't want a variable plan (for you ) I'd want all of us to have a great A plan where the company carries the risk and pays me till death. WE agreed to the currently status quo, not me, but the majority here.

This fix is mainly to help you. Not raising the 260K cap affectively hosed the near term retirees..

Thank you