How's our A Fund Doing? 10 year History
#1
How's our A Fund Doing? 10 year History
Much talk about our current A fund being too expensive and the risks of future default.
Let's take a look back at the numbers published by Fedex in the "Annual Funding Notice for Fedex Corp Employee's Pension Plan."
To keep it simple, let's cut to the chase and focus on the "Funding Target Attainment Percentage" (FTAP)
Federal Law requires the Plan Administrator to tell us how well the plan is funded using FTAP.
FTAP = Net Plan Assets / Plan Liabilities (expressed as a percentage)
In general, the higher the percentage, the better funded the plan.
All percentages as of June 1, 20XX
2008 - 83.19%
2009 - 90.38%
2010 - 80.00%
2011 - 82.72%
2012 - 99.09%
2013 - 95.16%
2014 - 101.22%
2015 - 105.35%
2016 - 100.63%
2017 - Not Yet Published
Note: Prior to 2008, a slightly different accounting metric was utilized and reported - the Funded Current Liability Percentage (FCLP)
2006 - 73.63%
2007 - 83.32%
Trends since 2009:
Regulated Age Change = Pilots retiring later + longevity constant = lower # of payments in retirement
High Stock Market gains.
(Note: The decline of 20% by mid-2008 was in tandem with other stock markets across the globe. On September 29, 2008, the DJIA had a record-breaking drop of 777.68 with a close at 10,365.45.
The DJIA hit a market low of 6,443.27 on March 6, 2009, having lost over 54% of its value since the October 9, 2007 high)
Let's take a look back at the numbers published by Fedex in the "Annual Funding Notice for Fedex Corp Employee's Pension Plan."
To keep it simple, let's cut to the chase and focus on the "Funding Target Attainment Percentage" (FTAP)
Federal Law requires the Plan Administrator to tell us how well the plan is funded using FTAP.
FTAP = Net Plan Assets / Plan Liabilities (expressed as a percentage)
In general, the higher the percentage, the better funded the plan.
All percentages as of June 1, 20XX
2008 - 83.19%
2009 - 90.38%
2010 - 80.00%
2011 - 82.72%
2012 - 99.09%
2013 - 95.16%
2014 - 101.22%
2015 - 105.35%
2016 - 100.63%
2017 - Not Yet Published
Note: Prior to 2008, a slightly different accounting metric was utilized and reported - the Funded Current Liability Percentage (FCLP)
2006 - 73.63%
2007 - 83.32%
Trends since 2009:
Regulated Age Change = Pilots retiring later + longevity constant = lower # of payments in retirement
High Stock Market gains.
(Note: The decline of 20% by mid-2008 was in tandem with other stock markets across the globe. On September 29, 2008, the DJIA had a record-breaking drop of 777.68 with a close at 10,365.45.
The DJIA hit a market low of 6,443.27 on March 6, 2009, having lost over 54% of its value since the October 9, 2007 high)
#2
Bumpty, Bump, Bump.
Research Broadly - Think Critically!
Demand that your elected representatives share the specific data, research all options, and be actively genuine regarding all aspects of what’s being proposed.
Research Broadly - Think Critically!
Demand that your elected representatives share the specific data, research all options, and be actively genuine regarding all aspects of what’s being proposed.
#4
Gets Weekends Off
Joined APC: Aug 2006
Posts: 1,820
Isn't it interesting that the "A" plan was funded in the 80% range until 2012, five years after the regulated age changed and added 5 more years until mandatory retirement. Seems like that was a bit of a windfall for the company.
#5
It doesn’t fit the narrative that only a big change can save us.
Economic conditions & airlines industry negotiating positions have changed from 2005/2006....to 2008/2009....to 2012/2013...to 2015...to 2017 and today.
Let’s recognize the financial health of our current A fund, the company and the industry.
The company can afford to make improvements to our current A plan
Any leadership, and crew force, which assumes otherwise is disconcerting
#8
Your statement is merely a statement of inflation.
These are two different issues.
Indexing our current A plan earnings limit to some measure of inflation would be an improvement and one way to fix the "inflation" issue.
However, the argument that we must change to a "variable plan" and take on the investment risk, along with losing our "High 5" based retirement mode, is NOT supported by a factual argument that the current A fund is underfunded.
Once 2017 results are included, I think we will find the A fund is even healthier.
Research Broadly, Think Critically
In Unity,
DLax
#9
The ANNUAL FUNDING NOTICE for FedEx Corporation Employee's Pension Plan is published each Sept
The last report was published in Sept 2017, showing the A Funds Target Attainment Percentage of Jun 1, 2016
It appears pilots will need to wait until Sep 2018 to publicly see the results thru "mid-year" 2017.
However in May, each pilot should received their annual, FedEx Corp Employees' Pension Plan Report of Traditional Pension Benefit Accrued Benefit
This is where you will see your "High 5" calculation
Under the proposed Variable Benefit plan, you can kiss this methodology GOODBYE!
Your accrued benefit will be a function of your "career earnings".
Yes - ALL Years Count - Even your LOW ONES!
This change alone is a major disadvantage of the proposed VB plan.
It will decrease a pilots accrued benefit, and will decrease the rate a pilot can increase his accrued benefit as he upgrades
The affect is being masked, by the union saying the current A fund limit cannot be raised at all, without changing to a VB plan
And that market rates of return, will increase your benefit greater than the accrued benefit.
If the later is true, why doesn't the company keep the investment risk and reap those extra returns?
The last report was published in Sept 2017, showing the A Funds Target Attainment Percentage of Jun 1, 2016
It appears pilots will need to wait until Sep 2018 to publicly see the results thru "mid-year" 2017.
However in May, each pilot should received their annual, FedEx Corp Employees' Pension Plan Report of Traditional Pension Benefit Accrued Benefit
This is where you will see your "High 5" calculation
Under the proposed Variable Benefit plan, you can kiss this methodology GOODBYE!
Your accrued benefit will be a function of your "career earnings".
Yes - ALL Years Count - Even your LOW ONES!
This change alone is a major disadvantage of the proposed VB plan.
It will decrease a pilots accrued benefit, and will decrease the rate a pilot can increase his accrued benefit as he upgrades
The affect is being masked, by the union saying the current A fund limit cannot be raised at all, without changing to a VB plan
And that market rates of return, will increase your benefit greater than the accrued benefit.
If the later is true, why doesn't the company keep the investment risk and reap those extra returns?
#10
https://www.bls.gov/data/inflation_calculator.htm
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