How's our A Fund Doing? 10 year History
05-08-2018, 03:14 AM
#31
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Joined APC: Aug 2006
Posts: 1,820
Originally Posted by Tuck
Huh? Why?
Save average pilot hired at age 35 here works 30 years (almost everyone going to 65 so let's not beat around the bush on that) - he leaves with a maximum of $130,000 benefit.
Same average pilot makes WB in 3 years, NB Captain in 8 years and WB captain in 13 years (this tracks exactly with someone hired in 2005 which was about the worst time to get hired for upgrades of current pilots on property). His benefit under the modeled VBP would be something like:
YEAR 1-3 average pay $140,000 - benefit $8400
YEAR 4-8 average pay $190,000 - benefit $19,000
YEAR 9-13 average pay $220,000 - benefit $22,000
YEAR 14-30 average pay IRS 401a17 limits indexed up annually - estimate benefit $107,000
Total benefit based on floor only $156,000 - it would actually be higher if you accounted for average stock returns in those years. Of course that's for someone hired around 2005. If you were hired after that the benefit is far greater. Now if you sat around on NBFO pay forever you could be negatively affected. Heck, most of the widebody FOs I know today are making close to $260,000 in pensionable earnings.
Correct my assumptions if I'm wrong.
Save average pilot hired at age 35 here works 30 years (almost everyone going to 65 so let's not beat around the bush on that) - he leaves with a maximum of $130,000 benefit.
Same average pilot makes WB in 3 years, NB Captain in 8 years and WB captain in 13 years (this tracks exactly with someone hired in 2005 which was about the worst time to get hired for upgrades of current pilots on property). His benefit under the modeled VBP would be something like:
YEAR 1-3 average pay $140,000 - benefit $8400
YEAR 4-8 average pay $190,000 - benefit $19,000
YEAR 9-13 average pay $220,000 - benefit $22,000
YEAR 14-30 average pay IRS 401a17 limits indexed up annually - estimate benefit $107,000
Total benefit based on floor only $156,000 - it would actually be higher if you accounted for average stock returns in those years. Of course that's for someone hired around 2005. If you were hired after that the benefit is far greater. Now if you sat around on NBFO pay forever you could be negatively affected. Heck, most of the widebody FOs I know today are making close to $260,000 in pensionable earnings.
Correct my assumptions if I'm wrong.
First of all, what happens to upgrade progression when your retirement is now calculated on career earnings vs. the current high 5 model? I would think that the historic upgrade model would be thrown out the window due to the fact that more pilots would try to upgrade sooner to try to increase their average salary and increase their retirement.
Another assumption in the VB plan is that the company is going to agree to increase their contributions every year, IE. it is more expensive, in order to eliminate their risk. I have asked the union several times how much more would it cost to raise our A plan vs the increase in the cost of the VB plan. So far the answers have been it's proprietary information, and the calculation is harder to make than you think. Hmm, they can't say that raising the A plan to say a high 5 of $340K would be 30% more expensive than the same benefit under the VB plan? I think that the costs aren't significantly different, or they would be including that it the sales campaign.
Also, what would the asset mix be in the VB plan. The company would still control the investments. And how about how a floor benefit effects the plan. The NC has stated that the floor may be less than $130K, that would have to be negotiated.
The problem with the comparisons that the union has been putting out between the A plan and the VB plan is that they are assuming that the A plan contributions are fixed and that the VB plan contributions are greater than the current A plan and will increase infinitely.
By the way, where are the models that we can use to plug in our own numbers? Those were almost ready back in March. I guess it takes time to adjust the models to make sure the numbers come out the way you want when you can't control all of the inputs!
05-08-2018, 08:13 AM
#32
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Joined APC: Sep 2010
Position: MD-11 F/O
Posts: 111
Originally Posted by kronan
That's because they are playing chess, not checkers.
The Company sure seems focused on improving efficiency, reducing costs, and outsourcing where available.
The recent change in telephone access to our auditors is one example.
Guess you’re thinking The Company is saving up these savings for CBA 202X[/QUOTE]
Behind Corporate doors they are high-fivin' and can't believe their good luck.....
“Never interrupt your enemy when he is making a mistake.”
― Napoléon Bonaparte
“The whole secret lies in confusing the enemy, so that he cannot fathom our real intent.”
― Sun Tzu, The Art of War
Chess, not checkers...
05-08-2018, 08:28 AM
#33
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Joined APC: Sep 2006
Position: MD11 FO
Posts: 1,109
Originally Posted by LunkerHunter
How many years after retiring at 65 would ths new benefit last at $156K per year? I heard that this whole proposal is based on an average life expectancy that Fedex won’t disclose.
05-08-2018, 09:59 AM
#34
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Joined APC: Aug 2006
Posts: 1,820
Originally Posted by Tuck
A lot longer than your $130k/year will....and in addition you can tie it to the stock market returns in retirement (just like your B plan will do) if desired
The $130K is for life. If you tie the VB plan to the market after you retire, your $156K may go up, but it can also go down. It could even go below the $130K.
05-08-2018, 10:41 AM
#35
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Joined APC: Apr 2018
Position: MEM HSBY
Posts: 166
Originally Posted by pinseeker
Really?
The $130K is for life. If you tie the VB plan to the market after you retire, your $156K may go up, but it can also go down. It could even go below the $130K.
The $130K is for life. If you tie the VB plan to the market after you retire, your $156K may go up, but it can also go down. It could even go below the $130K.
05-08-2018, 06:56 PM
#36
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Thread Starter
Joined APC: Jul 2007
Position: Gear Monkey
Posts: 3,191
Originally Posted by Tuck
A lot longer than your $130k/year will....and in addition you can tie it to the stock market returns in retirement (just like your B plan will do) if desired
Dial it up - heavy equities. Dial it down - heavy cash & bonds.
Pass it on to your heirs
You won’t be able to tie your VB benefits to the “stock market”
You will be able to tie (expose) them to the VB plans investment returns
These won’t (and shouldn’t) be just equities. They will be about a 50% equities / 50% bonds mix
Benefit plans can’t just focus on growth (in the way a young pilot may load up on equities). They must make payments to beneficiaries, and therefore typically match their bond and dividend paying stocks to those liabilities.
And remember, VB benefit plans go “up” or “down” compared to the negotiated “hurdle rate”
The retirement plan can actually make a positive return, but one less than the hurdle rate, and then your retirement benefit would decrease.
05-08-2018, 07:25 PM
#37
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Joined APC: Nov 2005
Position: 757 Capt
Posts: 2,418
Originally Posted by decrabbitz
Interesting...any other examples where The Company is doing pilots a favor and Not Reducing The Companies cost?
The Company sure seems focused on improving efficiency, reducing costs, and outsourcing where available.
The recent change in telephone access to our auditors is one example.
Guess you’re thinking The Company is saving up these savings for CBA 202X
The Company sure seems focused on improving efficiency, reducing costs, and outsourcing where available.
The recent change in telephone access to our auditors is one example.
Guess you’re thinking The Company is saving up these savings for CBA 202X
Behind Corporate doors they are high-fivin' and can't believe their good luck.....
“Never interrupt your enemy when he is making a mistake.”
― Napoléon Bonaparte
“The whole secret lies in confusing the enemy, so that he cannot fathom our real intent.”
― Sun Tzu, The Art of War
Chess, not checkers...[/QUOTE]
Yep-8+ months after this concept was presented to the Company...crickets.
It's absolutely astonishing how "quickly" the Company is moving to take advantage of this Mistake.
It's almost like watching a Soccer Game when the Goalie's not on the field.
Or a Hockey Team that pulls the Goalie in the 1st Period....
05-08-2018, 09:21 PM
#38
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Joined APC: Mar 2012
Position: Two Wheeler FrontSeat
Posts: 1,162
Originally Posted by kronan
Behind Corporate doors they are high-fivin' and can't believe their good luck.....
“Never interrupt your enemy when he is making a mistake.”
― Napoléon Bonaparte
“The whole secret lies in confusing the enemy, so that he cannot fathom our real intent.”
― Sun Tzu, The Art of War
Chess, not checkers...
“Never interrupt your enemy when he is making a mistake.”
― Napoléon Bonaparte
“The whole secret lies in confusing the enemy, so that he cannot fathom our real intent.”
― Sun Tzu, The Art of War
Chess, not checkers...
It's absolutely astonishing how "quickly" the Company is moving to take advantage of this Mistake.
It's almost like watching a Soccer Game when the Goalie's not on the field.
Or a Hockey Team that pulls the Goalie in the 1st Period....[/QUOTE]
What do you mean 8+ months. Wasn’t this suppose to be a research project by the union? Now you’re saying it was presented to the company?
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