New MEC Sales Video
03-24-2018, 07:49 AM
#371
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Joined APC: Jul 2006
Posts: 500
Originally Posted by pinseeker
Ok. This isn't hard. The model that the union is using is assuming future pay raises and caps. We already know what the caps and pay rates and market returns were from 1992 until 2017. We also know what hurdle rate was being used in the model, so why change that. By the way, the lower the hurdle rate, the better the return, so 4% would be better than 5%. So, again, what would a pilot who was hired in 1992 at 1992 pay rates and and using the known IRS earnings caps and 1000 X pay rate that the union used in their model get in retirement. We can even use their assumed historic upgrade time.
We know what our current A plan has paid out historically and we can certainly figure out what the proposed VB plan would have paid out using actual numbers. Let's compare those numbers.
We know what our current A plan has paid out historically and we can certainly figure out what the proposed VB plan would have paid out using actual numbers. Let's compare those numbers.
Additionally, for every pilot over 25 years of service, since the company will not be adding any new money for them, any gains they get from the new plan HAVE TO COME FROM THOSE WITH LESS THAN 25 YEARS. There is no additional money. That is the whole Union premise behind why we cannot increase the A plan. IF there is additional money, then we CAN increase the A Plan now.
03-24-2018, 08:37 AM
#372
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Joined APC: Nov 2005
Position: 757 Capt
Posts: 2,418
No One has Ever said the Company CANNOT increase retirement compensation.
No One.
What has been said is that changing to a VB reduces the Administrative Costs associated and reduces the Impact dramatic Stock Market Swings have on Pension plan funding.
And that cost savings should be passed onto us should the Company so desire.
Keep in mind, that the target is IRS limits, which is NOWHERE near the current WB Capt Salary
No One.
What has been said is that changing to a VB reduces the Administrative Costs associated and reduces the Impact dramatic Stock Market Swings have on Pension plan funding.
And that cost savings should be passed onto us should the Company so desire.
Keep in mind, that the target is IRS limits, which is NOWHERE near the current WB Capt Salary
03-24-2018, 08:48 AM
#373
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Joined APC: Sep 2006
Posts: 560
Originally Posted by kronan
...
And that cost savings should be passed onto us should the Company so desire...
And that cost savings should be passed onto us should the Company so desire...
Many pilots do not trust the company to do the right thing!
Many pilots do not trust the union to do the right thing!
03-24-2018, 09:58 AM
#374
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Thread Starter
Joined APC: Aug 2006
Posts: 1,820
It all comes down to the resolve of the crew force to get the retirement that we deserve. I am willing to wait until 202? to get the retirement I deserve. That is what the union should be preparing the crew force for. The only benefit of this VB plan to the company is that they now know what they have to contribute to the plan every year. The plan can't be underfunded according to PBGC rules, therefore, there would be no catchup payments or penalty payments. Our current plan is overfunded according to PBGC rules. There are no premium savings with the new plan.
The company didn't need to make a payment with the tax savings to fund the plan for 2018, they did so to get a bigger tax write-off. Think about it, they contribute $1.5B under the 2017 tax rate and get to write that off instead of waiting and writing it off later under the new lower corporate tax rate. The timing of that payment had nothing to do with required funding of our A plan, it was a tax savings measure.
The company didn't need to make a payment with the tax savings to fund the plan for 2018, they did so to get a bigger tax write-off. Think about it, they contribute $1.5B under the 2017 tax rate and get to write that off instead of waiting and writing it off later under the new lower corporate tax rate. The timing of that payment had nothing to do with required funding of our A plan, it was a tax savings measure.
03-24-2018, 01:03 PM
#375
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Joined APC: Nov 2005
Position: 757 Capt
Posts: 2,418
Pinseeker,
I don't think it works like you think it works. I don't think Pension Contributions work the way an IRA contribution works. Just like I don't think I can declare a part of my 401k Contributions made in 2018 should count towards 2017 limits.
In any case, what FedEx stated when they made the Pension Contributions this year was that they were doing so to take advantage of the Reduced Corporate Tax rates...which follows up on Something Alan Graf said Dec 19th during the earnings call.
Bloomberg also indicated Pension was 88% funded.
If you Truly want to Geek Out, Pension reporting is in the 2nd link. If that doesn't work, just use EIN 621721435 and search out Form 5500 at DOL
https://www.bloomberg.com/news/artic...r-tax-overhaul
https://www.efast.dol.gov/portal/app...xecution=e1s6#
I don't think it works like you think it works. I don't think Pension Contributions work the way an IRA contribution works. Just like I don't think I can declare a part of my 401k Contributions made in 2018 should count towards 2017 limits.
In any case, what FedEx stated when they made the Pension Contributions this year was that they were doing so to take advantage of the Reduced Corporate Tax rates...which follows up on Something Alan Graf said Dec 19th during the earnings call.
Bloomberg also indicated Pension was 88% funded.
If you Truly want to Geek Out, Pension reporting is in the 2nd link. If that doesn't work, just use EIN 621721435 and search out Form 5500 at DOL
https://www.bloomberg.com/news/artic...r-tax-overhaul
https://www.efast.dol.gov/portal/app...xecution=e1s6#
03-24-2018, 01:09 PM
#376
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Joined APC: Nov 2005
Position: 757 Capt
Posts: 2,418
Seems I was wrong on the increased Tax Deductibility
This is a clipping from our Most Recent earnings call
"Before I talk about the operating results for the segments, I'd like to mention the tax benefits in our GAAP results, since they were significant this quarter. We recorded a benefit of $1.53 billion from the TCJA. This primarily includes a provisional benefit of $1.15 billion from the remeasurement of the company's net U.S. deferred tax liability for lower tax rates, which we have excluded from adjusted earnings; a benefit of approximately $200 million from an incremental pension contribution made in February and deductible against the company's prior year taxes at 35%; and a benefit of approximately $170 million, attributable to the phase-in of the reduced tax rate applied to the company's year-to-date earnings."
The contribution to our U.S. pension plans of $1.5 billion was debt financed. Our U.S. pension plans are currently fully funded. While the funding shows up on the financial statements as a reduction in operating cash flow, they provide a tremendous immediate return in terms of tax savings, as well as lower PBGC premiums versus funding the plan at a later date."
CFO Alan Graf
This is a clipping from our Most Recent earnings call
"Before I talk about the operating results for the segments, I'd like to mention the tax benefits in our GAAP results, since they were significant this quarter. We recorded a benefit of $1.53 billion from the TCJA. This primarily includes a provisional benefit of $1.15 billion from the remeasurement of the company's net U.S. deferred tax liability for lower tax rates, which we have excluded from adjusted earnings; a benefit of approximately $200 million from an incremental pension contribution made in February and deductible against the company's prior year taxes at 35%; and a benefit of approximately $170 million, attributable to the phase-in of the reduced tax rate applied to the company's year-to-date earnings."
The contribution to our U.S. pension plans of $1.5 billion was debt financed. Our U.S. pension plans are currently fully funded. While the funding shows up on the financial statements as a reduction in operating cash flow, they provide a tremendous immediate return in terms of tax savings, as well as lower PBGC premiums versus funding the plan at a later date."
CFO Alan Graf
03-24-2018, 03:35 PM
#377
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Joined APC: Jul 2007
Position: Gear Monkey
Posts: 3,193
Originally Posted by kronan
Seems I was wrong on the increased Tax Deductibility
This is a clipping from our Most Recent earnings call
".....The contribution to our U.S. pension plans of $1.5 billion was debt financed.
Our U.S. pension plans are currently fully funded.
While the funding shows up on the financial statements as a reduction in operating cash flow, they provide a tremendous immediate return in terms of tax savings, as well as lower PBGC premiums versus funding the plan at a later date." CFO Alan Graf
This is a clipping from our Most Recent earnings call
".....The contribution to our U.S. pension plans of $1.5 billion was debt financed.
Our U.S. pension plans are currently fully funded.
While the funding shows up on the financial statements as a reduction in operating cash flow, they provide a tremendous immediate return in terms of tax savings, as well as lower PBGC premiums versus funding the plan at a later date." CFO Alan Graf
I don’t recall seeing these statements in any recent MEC messages to the crew force.
Now, how do I change this paragraph to ALL CAPS, BOLD and Italics to make sure the MEC lurkers read it.
Our assumption of: woe is them, so woe is us, really needs to change
Look what happened at Delta and Southwest during their last round of negotiations.
Both pilot groups were told to vote for TAs that did not reflect the economic reality that their companies were in fact very profitable.
Both crew forces didn’t buy it. They said no. Held out - and yes, got better TAs on the renegotiation.
Our assumptions and approach on retirement should change.
Pilots are working longer, their retirement payouts are shorter, the economy is better, the A fund is fully funded, and the tax environment is favorable.
The new, incoming MEC leadership could acknowledge these new dynamics and reevaluate their assumptions.
They could change their approach that’s it’s VB or nothing.
Last edited by DLax85; 03-24-2018 at 03:45 PM.
03-24-2018, 07:01 PM
#378
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Joined APC: Aug 2012
Posts: 711
There was something interesting to me in your post Dlax that I hadn’t thought of before. The MECs sending out TAs—especially the Delta MEC. Shows the MECs can be out of touch with their constituents. Is there a group think that wraps up some MECs. Is it perpuated by the staff lawyers that provide continuity? I don’t know if this is true, but I’ve always thought our MEC was too business-like, too “company is too powerful”. The attitude I feel seems to have survived several MEC changeouts over the years. Why are we so meek in enforcing our contractual rights? Why has the language in our CBAs and LOAs always been so poor? I’ve read other airline’s CBAs and it’s amazing how some seem to be much more iron clad.
We keep playing checkers and I’ve not ever seen what I feel like is a chess move from our union, contract enforcement, etc. Fool me once, shame on me. Fool me a dozen times, I’d be an idiot not to think we would be outplayed again. From what I’m seeing, in the short to medium term, this VB plan is only incremental and not awesome. Why should I take on this enormous risk when I feel that a simple maneuver by the company would hose us? Just look at what they did changing when money is paid out to retirees. After years of historical practice paying out in January, this giving us more B fund payment and reducing retirement year tax obligations, they make a change hat has very significant detrimental impact. If our “top notch” lawyers can’t game this and put in preventative language, I really have very little faith something similar won’t take place in a potential, new VB plan.
While I’m willing to look at a VB plan, I really do feel that there will be such emotional investment in it at the MEC and NC and R&I level that there will be group think and a sell. If released to the crew force, I think just about anything will Pass these days. We saw it in the horrible FDA LOAs and the less than stellar 2015 CBA.
I’m worried.
We keep playing checkers and I’ve not ever seen what I feel like is a chess move from our union, contract enforcement, etc. Fool me once, shame on me. Fool me a dozen times, I’d be an idiot not to think we would be outplayed again. From what I’m seeing, in the short to medium term, this VB plan is only incremental and not awesome. Why should I take on this enormous risk when I feel that a simple maneuver by the company would hose us? Just look at what they did changing when money is paid out to retirees. After years of historical practice paying out in January, this giving us more B fund payment and reducing retirement year tax obligations, they make a change hat has very significant detrimental impact. If our “top notch” lawyers can’t game this and put in preventative language, I really have very little faith something similar won’t take place in a potential, new VB plan.
While I’m willing to look at a VB plan, I really do feel that there will be such emotional investment in it at the MEC and NC and R&I level that there will be group think and a sell. If released to the crew force, I think just about anything will Pass these days. We saw it in the horrible FDA LOAs and the less than stellar 2015 CBA.
I’m worried.
03-24-2018, 07:14 PM
#380
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Joined APC: Mar 2012
Position: Two Wheeler FrontSeat
Posts: 1,162
Originally Posted by Raptor
There was something interesting to me in your post Dlax that I hadn’t thought of before. The MECs sending out TAs—especially the Delta MEC. Shows the MECs can be out of touch with their constituents. Is there a group think that wraps up some MECs. Is it perpuated by the staff lawyers that provide continuity? I don’t know if this is true, but I’ve always thought our MEC was too business-like, too “company is too powerful”. The attitude I feel seems to have survived several MEC changeouts over the years. Why are we so meek in enforcing our contractual rights? Why has the language in our CBAs and LOAs always been so poor? I’ve read other airline’s CBAs and it’s amazing how some seem to be much more iron clad.
We keep playing checkers and I’ve not ever seen what I feel like is a chess move from our union, contract enforcement, etc. Fool me once, shame on me. Fool me a dozen times, I’d be an idiot not to think we would be outplayed again. From what I’m seeing, in the short to medium term, this VB plan is only incremental and not awesome. Why should I take on this enormous risk when I feel that a simple maneuver by the company would hose us? Just look at what they did changing when money is paid out to retirees. After years of historical practice paying out in January, this giving us more B fund payment and reducing retirement year tax obligations, they make a change hat has very significant detrimental impact. If our “top notch” lawyers can’t game this and put in preventative language, I really have very little faith something similar won’t take place in a potential, new VB plan.
While I’m willing to look at a VB plan, I really do feel that there will be such emotional investment in it at the MEC and NC and R&I level that there will be group think and a sell. If released to the crew force, I think just about anything will Pass these days. We saw it in the horrible FDA LOAs and the less than stellar 2015 CBA.
I’m worried.
We keep playing checkers and I’ve not ever seen what I feel like is a chess move from our union, contract enforcement, etc. Fool me once, shame on me. Fool me a dozen times, I’d be an idiot not to think we would be outplayed again. From what I’m seeing, in the short to medium term, this VB plan is only incremental and not awesome. Why should I take on this enormous risk when I feel that a simple maneuver by the company would hose us? Just look at what they did changing when money is paid out to retirees. After years of historical practice paying out in January, this giving us more B fund payment and reducing retirement year tax obligations, they make a change hat has very significant detrimental impact. If our “top notch” lawyers can’t game this and put in preventative language, I really have very little faith something similar won’t take place in a potential, new VB plan.
While I’m willing to look at a VB plan, I really do feel that there will be such emotional investment in it at the MEC and NC and R&I level that there will be group think and a sell. If released to the crew force, I think just about anything will Pass these days. We saw it in the horrible FDA LOAs and the less than stellar 2015 CBA.
I’m worried.
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