Nightflyer

The real problem here is that some people, who were against the contract, said, "the lie flat clause is going to do away with first class seats", and the MEC and NC didn't listen, but said, oh no, nothing to worry about here. The MEC and NC were obviously wrong, but they didn't let that stop them from selling a bad CBA.

Kind of like some people saying, "the VB plan is going to destroy our retirement", and then the MEC not listening, again.

I wonder how that is going to work out for us?

kronan

Really,
the VB plan is Math. Actual numbers to be negotiated, but just math.
If the Salary Cap is tied to 401(a)17 limit, or 15yr WB Capt Pay * 1000, it's a number. So, would be kind of hard for the company to say X=Y instead of X=X.

If the Hurdle Rate is 5%, would be hard for the Company to say--no, Our Pension assets only returned 1% for the year. Pension Asset returns are something that's reported to the SEC, so "gamesmanship" not really in play.

If the Floor is 2%, again, kindof hard for the company to say 275*.02 is Anything other than 275*.02.

Again, it's just Math. And similarly, since 2013, our Traditional A plan has decreased in value. It's been a constant 130k, but 2018's 130k will buy less than 2013's 130k.

Arbitration
"Regardless of the class of service actually ticketed, a pilot’s
deviation bank shall be credited with the Baseline Fare for the
highest class of service which is authorized on the scheduled
deadhead flight, and which exists on that flight."

So, what an Arbitrator decided is that "Regardless" of what that clause says, historical practice, and SL's take...a Lie Flat Business seat fare is the Same as a Discounted FC Fare is the Same as a FC fare.

And, as best I can tell, there is Nothing in the CBA that would Preclude the Company from Scheduling Flights out of Memphis in at least Discounted FC flights as a gesture of goodwill.
The People who argued that the Company still had to Schedule Flights out of Memphis IAW the priority, well, that's an argument in line with those who argue the Company Shouldn't be Allowed to book in Coach and Waitlist for Business\FC.

Deviation Bank decision by the Arbitrator still escapes me. If Lie Flat is 3k, Discounted FC is 5k, Full Fare FC is 7k, and the Flight Isn't 100% Business Class, then how in the world can anyone say 3k is the same as 7k?

kronan

The dufuses who think they can beat the market can only do so in their B plan.
The VB plan creates a "notional" account in your name, but the money is a pooled account managed by FedEx. (Technically, the Pro's FedEx hires)
Just as the money in our current A plan is managed by people FedEx has hired. And reported to various Govt entities.

And, if there's a funding shortfall per Govt Rules, then FedEx has to pony up extra bucks to make the Pension fund whole.

If the Market continues to decline, then I'm thinking FedEx might actually decide to enter into Negotiations. FedEx just ponied up some major buckage to increase the funding levels versus existing obligations and gain reduced PBGC Premiums...and I'm sure at some level they're going dang, wish we'd waited until Friday to Invest

Flying Boxes

Please elaborate on this part of your post. I thought that the savings for the company is that it is "like" a DC plan for them financially. In other words, once they contribute the money to the plan it is no longer their risk. If market goes down, so does the benefit. They are responsible for managing the money....but are NOT responsible for the down side. Down turns simply mean we don't get as much. FedEx no longer is required to plus up the fund.

Unless there is some negotiated base value to the benefit, which the union has not elaborated on other than "it can be negotiated". Which is sounds a lot like what was said by the union about the arbitration they just lost!

kwri10s

NO, NO, NO. The entire premise for the company is they get to "fix" their costs year over year. That is what we are signing up for. In exchange for letting "US" decide the level of risk and maybe increase the return. The company gets to set their level of contribution going forward forever. No increase, no changes. If our VB plan falls below any required level, it's on us. Not them. Thereby the risk is now our risk, not their risk.

kronan

You Did see the part about a 2% Floor Right?
What do you think that means?

So, About 19:04 into Greg Readon's Video from our MEC meeting when he says "The Variable Benefit cannot decrease below the Floor Guarantee and the Floor Guarantee formula is 2% times Compensation...."

And then, about 24:48 when he talks about the yearly benefits and indicates that we'd get the Greater of the 2 Values...actual returns or the 2% floor benefit

What do you think That means?

True, all subject to Negotiation. And True, Mgt could come back with a 1% Floor....but why would we even entertain that?

Flying Boxes

It means that we should have a minimum contribution for any year is 2% of our pensionable income divided by total pilot contributions to determine how many shares (pancakes) we get that year.

Not a minimum payout during retirement.

DLax85

I disagree. It’s a floor accrural Benefit per year. The difference is you earn it each year...never to be replaced by a higher year.

It’s “career average earnings” vs “high 5”.

And any amount over the IRS limit, won’t count — that’s unlike, how current “High 5” is calculated.

Currently, the “High 5” average is capped at $260K - not any particular year

You can use $235K, $240K, $260K, $280K, $285K - that currently yeilds a High 5 average of $260K

Under the new VB, any one year can never exceed the cap

If Caps are the same, for any YOS up to 25 YOS, the VB “career average earnings” accrued benefit will BE LESS than the current A plan High 5

It’s just math

kronan

You are just a special kinda wonderful aren't ya.

What happens to our Pension Payouts when a pilot dies? Does the pot get bigger?

DLax85

Huh?

If the pension assets return 1% per year, they’d just report 1% that year, without any worry or concern

The failure of the pension fund to meet the Hurdle Rate is a RISK THE PILOTS (...and RETIRED PILOTS) take at that point

The previous years $1 in benefits would decrease about 4%

(...though I believe it’s 1.01/1.05 = 96.19....3.81% to be exact)

Have that happen for the first few years of your retirement, and you can dig a nice little whole pretty fast.