Anybody make today’s hub turn meeting? Anything of interest?

 

No I didn't attend, here is a brief summary. We are fulfilling our promise to improve retirement. We wont leave anybody behind. You'll love it. Cant tell you anything else because we don't want to give anything away or leave anything on the table.

 

Thanks. Does it start paying out right away after you retire or is there an age that it kicks in (like 65 for example)?

 

You can retire at age 55 with whatever accrued benefit you have at the time. The formula is the same, but the resulting benefit is reduced by 3% for each year you are under age 60. So if at age 55 your benefit was calculated to be 100K (just a number for easy math) your penalty would be 15% and you would get 85K. It starts the month after you retire unless you defer it to reduce the penalty.

Age 60 and beyond your benefit starts the month after you retire, again unless you defer it to increase the benefit amount, which is about an 8% increase I believe if you defer for one year. Not sure if you can defer it for more than a year after age 60.

Don't worry about any of this though, as our union is hellbent on giving away our defined benefit plan against the wishes of many of the crew force. So it is unlikely you will have to worry about an A plan by the time you hit age 55 or 60 at FedEx.

 

The Union would like to modify how our A plan benefit is calculated.

But no changes can be made agains the wishes of "many" of the crew force.

If it is changed, then I would be surprised if there is any penalty against retiring early since it would be a year by year accrued benefit.

 

Modeler results are why many FedEx pilots feel those who aren't vested in our current retirement plan shouldn't have a vote on modifying the A plan benefit calculation (Vesting occurs @ 5 years)

These results are calculated using Only the Floor benefit calculation, no potential market returns included.
These results are ALSO not as good as an Indexed Salary Capped Traditional A plan would be.

35 year old Newhire today retiring at:
55 (20 YOS) Current A plan 88k, VB model 96k
57 104/119
60 130/159
62 130/179
65 130/211

 

How can you post this? You have no idea what the plan will look like all you are doing is making assumptions.

 

Two things discussed yesterday which I really liked.

They hear us when we say we always get outdone by the company’s experts. They hear us when we say that we should hire outsiders to come in and help. In their opinion that have done just that. From the research I have done I think they have done that.

Secondly, this will absolutely have to be voted on by the pilot group.

What I didn’t like: they wouldn’t say how much they’ve spent on this project. I understand not negotiating in public but I don’t know why that’s a secret.

I am still in the camp that if this plan saves the company as much money as some speculate (they did say this solves the company’s accounting issues which to me means saves them money) that we should harness that leverage to address some other parts of the contract. They are very focused on negotiating this as a singular issue.

-UA

 

And what assumptions are built in the modeler? Pay raises, upgrade timeline, economy, taxes....???

 

Its a model based on words and numbers on a piece of paper and the notion of only positive stock market returns in perpetuity created by people trying to sell us some snake oil while getting their cut out of our pie. Its fantasy but Kronan and the rest of the drones in the union have taken it as the holy grail. Meanwhile, giving up completely on simply improving the best retirement plan in the industry with a few simple and proven ideas, ideas which would keep the market risk of the A fund where it belongs, with the company and not the pilots.

Index the benefit, raise the cap, increase the number of years of service, raise the multiplier. Also increase the B fund and add cash over the cap and call it a day. So simple even a caveman could do it.

And I don't give a rat's ass what it costs the company to do any of these. We gave them the 2015 contract on the cheap and they need to start to pay up if they expect people to continue to come here and fly their life away one night at a time.

Shame on the union leadership for selling us out by forwarding the 2015 contract for a vote and for chasing this unicorn of a retirement plan down this rabbit hole for so long.

And shame on Kronan and his ilk for defending a money grab by the over 25 group at the expense of the rest of us.

Age 65, VEBA for a few, lie flats, known reserve days, international hotel in lieu of, real time trip trading to preserve OTP so the wolf pack can run wild, yeah the union is really doing a bang up job of negotiating iron clad improvements so we should definitely let them negotiate away our defined A plan.

What could possibly go wrong? Folks better think about this pretty hard if this POS ever comes to a vote.