With a training department that is pretty busy already, why do you think the company would do a huge realignment bid? Do they care that a senior FO is upset that he chose to not upgrade when he could have? They don’t care. It’s not in their interest to incur all that extra training. That being said, upgrades on future bids will go more senior even though the MEC and negotiators insist it won’t. Every year your upgrade is delayed by VB that is money out of your pocket NOW. Money that won’t be made up by a possibly slightly bigger pension.

 

I'm a new guy, but was I misunderstanding what Chuck said in one of the Hub meetings when he stated it was a 4:1 ratio due to the newly-mandated funding guarantees?

What I got out of the info was that certain members of the MEC had been read-in to the company books on the A-plan, and although they were not able to divulge the actual numbers due to the NDA, the 4:1 number was accurate. That for every dollar increase in the cap, it would cost the company 4 to fund it.

If that is the case, then this should be pretty simple math.

What am I missing?

 

What is the ratio that the company uses to fund our current A-plan?

Is it 1:2, 2:1, 3:1, or 4:1?

If you don't know that ratio, how can you say it is unreasonable to increase the cap.

Without context, a statement such as "it costs the company 4 dollars for every dollar increase to raise the A-Plan cap" is a statement meant to steer you to the speakers side.

 

I mean a bump and flush bid should be part of the negotiations. The company does not care. They see this as we all see this. It will instill much more "I'm getting mine" then they've ever seen. Now instead of being guaranteed a 50% of high 5 whenever you get those 5, everyone will have to max up every month. IF you don't maximize then you will loose retirement money as your percentage of the total will be less. So your buddy will be taking some of your retirement money.

The 2% floor is not the minimum an individual pilot can return, it's the minimum return rate for the whole bucket (fund). Since every pilot will only be getting "their percentage" of the total, if you work less than the average pilot you will receive less than average. So if the average pilot works more and you only work BLG you will be receiving less pancakes than what you had projected in your forecasting model. It won't matter if you return 2% if your pancake is only 85% of a average share. You already lost 15% and you will not make that up.

 

I understand why a senior FO who chose not to upgrade would want a realignment bid if this goes through. I don’t think everybody in our union will agree though. A junior captain who might lose his seat will not support that. An unaffected senior captain might not care either way. WB FOs who might become NB FOs won’t support a realignment bid because senior FOs have buyers remorse. The senior FO had a chance to upgrade and chose to not upgrade. Their seniority was honored and will be honored on any future bids. We don’t do a realignment bid with every new contract. Each contract has had a B fund increase which means a captain will get more contributed to his DC plan but we didn’t bump and flush then so why now? This is a valid argument.

Your point is not wrong either. This redefines our A fund. The union swears that they don’t see folks needing to upgrade at 100% to do better with VB compared to our existing plan and they all BELIEVE bidding behavior won’t change as senior FOs can max out the 415c income limits which apply to VB. I don’t necessarily agree. But every union person I’ve talked to swears bidding behavior won’t change in the long run???

What I do know is that either senior FOs who chose to delay upgrade or junior captains who get excessed or WB FOs who end up on the 757 will be very angry and they will all be justified in that anger. Our union will turn into a circular firing squad as we enter contract negotiations. Support for or against a realignment bid will be a function of its impact on the individual and certainly won’t be unanimous. Absence or presence of a realignment provision as part of a VB transition might be enough to keep it from being voted in. 🤞Either way the impact on unity must be considered when evaluating VB.

Big changes tend to have big winners and big losers. Incremental changes tend to be less divisive. I hope neither senior FOs or junior captains end up ****ed because we will all lose.

 

When you totally change the rules on how someones retirement is calculated, i.e. a high 5 years vs average income over your career, then yes, there should be a realignment bid.

You say that their seniority will be honored in any future bid, but what if they try to move, but there aren't enough vacancies. Then the Captain who is 5 years junior to the other senior pilot increases their retirement while the senior pilot can't.

As far as captains getting more with the B fund increase, most captains make over the IRS limit, so unless we get cash over cap, the 1% or 2% increase is pennies compared to what could be lost in the VB plan.

 

Like I said, support for or against a realignment will depend on how it impacts you. Some will agree. Some won’t. We all made bids based on the info we had at the time of the last bid. Seniority was honored. If we vote in VB, hopefully not, we all will be impacted and we will bid in seniority order either on realgnment or vacancy bids. We will be divided. Not everybody will want the realignment bid no matter how hard you scream and stomp your feet for or against it. The company and union may or may not want to do that. It will be a calculation and we will be stuck with the fallout.

OBTW a 1 or 2% increase compounded over many years is not pennies. That too depends on where you sit and how many years you have to take advantage of the increase.

Continue to tell everybody you fly with that this will affect them in more ways than their retirement check.

 

My guess is you were not a fan of the age 65 realignment bid even those guys were all senior to you. Did we honor seniority then by doing a realignment bid or should they have just let them upgrade if/when there was a vacancy bid?

 

The VB annual salary for benefit earned is limited by the IRS limit. So there is incentive to fly extra only for those that make less than the IRS limit. Just like the B Fund contributions stop after the IRS limit. There is no cash after cap on the B Fund. There is no mention of cash over cap on the VBP. So a captain is not really incentivized to fly extra by the VB retirement plan! But the FOs are.

BTW, the annual expense of the VB is less than 2% of pilot payroll. That is the cost of the VB. (not including fixed costs like mgt fees & PBGC fees, etc.)

So, we want to give up the A Fund out of section 6 to relieve the company from the A Fund burden for less than 2% cost to the company. ALPA hasn't fully explained the difference in fixed costs between the A Fund & VBP.

I don't understand why we are willing to give up the security of the A Fund for a retirement plan based on a 2% of salary that only grows with the stock market. That sounds more like the increase in the B Fund that was part of Contract 2015. So we are essentially giving up a guaranteed DB plan for the same B Fund increase we got in our last lack luster contract. Keep the A Fund, create a third retirement vehicle!

 

Agreed. Much less divisive. No big winners at the expense of others.