Retirement Plan Negotiations?
10-13-2018, 03:38 AM
#11
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Joined APC: Aug 2006
Posts: 1,820
Originally Posted by kronan
How this week would impact on the VB Benefit, hard to say. Will say that if negotiated we'd receive the Higher of Market Returns or the 2% Floor.
And, if negotiated as desired, every single pilot has a 260 FAE x YOS. (Soft Freeze)
And, if negotiated as desired, every single pilot has a 260 FAE x YOS. (Soft Freeze)
10-13-2018, 07:29 AM
#13
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Joined APC: Nov 2005
Position: 757 Capt
Posts: 2,418
Thanks for the Fix pinseeker
Newoldguy,
the Money is NEVER in our hands, until the Pension checks are cut.
Whether it's our current A plan or the VB plan. The Company is the sponsor and the $$ just isn't in our hands until after retirement. The Only retirement money that's in our hands is the B plan.
The VB plan is a Pension plan. Covered by ERISA and PBGC.
In the event of a long, or dramatic market down turn, FedEx is still obligated to meet Pension obligations. Barring bankruptcy, and even in Bankruptcy it Still takes Govt agreement to terminate a Pension plan.
Newoldguy,
the Money is NEVER in our hands, until the Pension checks are cut.
Whether it's our current A plan or the VB plan. The Company is the sponsor and the $$ just isn't in our hands until after retirement. The Only retirement money that's in our hands is the B plan.
The VB plan is a Pension plan. Covered by ERISA and PBGC.
In the event of a long, or dramatic market down turn, FedEx is still obligated to meet Pension obligations. Barring bankruptcy, and even in Bankruptcy it Still takes Govt agreement to terminate a Pension plan.
10-13-2018, 07:42 AM
#14
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Joined APC: Jan 2016
Position: B767 FO
Posts: 195
Originally Posted by kronan
Thanks for the Fix pinseeker
Newoldguy,
the Money is NEVER in our hands, until the Pension checks are cut.
Whether it's our current A plan or the VB plan. The Company is the sponsor and the $$ just isn't in our hands until after retirement. The Only retirement money that's in our hands is the B plan.
The VB plan is a Pension plan. Covered by ERISA and PBGC.
In the event of a long, or dramatic market down turn, FedEx is still obligated to meet Pension obligations. Barring bankruptcy, and even in Bankruptcy it Still takes Govt agreement to terminate a Pension plan.
Newoldguy,
the Money is NEVER in our hands, until the Pension checks are cut.
Whether it's our current A plan or the VB plan. The Company is the sponsor and the $$ just isn't in our hands until after retirement. The Only retirement money that's in our hands is the B plan.
The VB plan is a Pension plan. Covered by ERISA and PBGC.
In the event of a long, or dramatic market down turn, FedEx is still obligated to meet Pension obligations. Barring bankruptcy, and even in Bankruptcy it Still takes Govt agreement to terminate a Pension plan.
I understand that but what you fail to understand is that with the new program the VB plan becomes the bank account for “guaranteeing” the floor. Currently FEdex is the guarantor. In other words if Fedex doesn’t get the returns on the investment it hopes for, they have to make it whole to guarantee the current A plan payouts. Under the new program if the VB doesn’t get the returns on investments it needs to pay the floor Fedex doesn’t put more money in, the Money comes from within the VB plan to pay the floor guarantee. That’s what makes it a pyramid scheme. That’s what is attractive to Fedex is it becomes a fixed cost for them. That’s just one of the things that should be a red flag for us. Because if the market downturns, say for 5 years and doesn’t return enough to pay those guarantees, it comes from the fund capital. Which in turn lowers the re-investment capital (in an already down turned market) which reduces compounding gains putting the growth and guarantees at risk at some future point even though Fedex and the PBGC remain compliant. But you can’t get money from a fund which has exhausted itself. I believe (and this is only one of the many faults with this plan) you fail to see the Forrest for the trees in this case.
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10-13-2018, 07:56 AM
#15
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Joined APC: Nov 2016
Posts: 936
Originally Posted by NewOldGuy
I understand that but what you fail to understand is that with the new program the VB plan becomes the bank account for “guaranteeing” the floor. Currently FEdex is the guarantor. In other words if Fedex doesn’t get the returns on the investment it hopes for, they have to make it whole to guarantee the current A plan payouts. Under the new program if the VB doesn’t get the returns on investments it needs to pay the floor Fedex doesn’t put more money in, the Money comes from within the VB plan to pay the floor guarantee. That’s what makes it a pyramid scheme. That’s what is attractive to Fedex is it becomes a fixed cost for them. That’s just one of the things that should be a red flag for us. Because if the market downturns, say for 5 years and doesn’t return enough to pay those guarantees, it comes from the fund capital. Which in turn lowers the re-investment capital (in an already down turned market) which reduces compounding gains putting the growth and guarantees at risk at some future point even though Fedex and the PBGC remain compliant. But you can’t get money from a fund which has exhausted itself. I believe (and this is only one of the many faults with this plan) you fail to see the Forrest for the trees in this case.
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Sent from my iPhone using Tapatalk
10-13-2018, 08:08 AM
#16
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Joined APC: Aug 2006
Posts: 1,820
Originally Posted by kronan
The VB plan is a Pension plan. Covered by ERISA and PBGC.
In the event of a long, or dramatic market down turn, FedEx is still obligated to meet Pension obligations. Barring bankruptcy, and even in Bankruptcy it Still takes Govt agreement to terminate a Pension plan.
Under the VB plan, the company wouldn't have any defined benefit obligations in the event of a long or dramatic market down turn. Wouldn't we, the pilot group suffer all of the losses under that scenario?
10-14-2018, 06:51 AM
#17
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Joined APC: Nov 2005
Position: 757 Capt
Posts: 2,418
Originally Posted by pinseeker
Quick question Kronan. Since all of this still needs to be negotiated, what happens if the company refuses to accept a floor guarantee and the union sends this for ratification and it passes?
Under the VB plan, the company wouldn't have any defined benefit obligations in the event of a long or dramatic market down turn. Wouldn't we, the pilot group suffer all of the losses under that scenario?
Under the VB plan, the company wouldn't have any defined benefit obligations in the event of a long or dramatic market down turn. Wouldn't we, the pilot group suffer all of the losses under that scenario?
2nd Question. How long does it take investments to snap back from the typical downturn?
3rd Question. Assuming there's No Floor....why would there be a hurdle rate?
4th Question. You seem to be implying that there's no Bottom to the value of the notional shares the VB plan creates. But if there's no Bottom, exactly what does the PBGC guarantee? And why should FedEx pay premiums if the PBGC insurance is worthless?
5th Question. If I believe the Internet rumors of "Not a Single Person I've talked to is Pro VB plan"...how on Earth would something that anecdotally 90% of FedEx pilots are opposed to with a 2% floor, pass without a floor?
10-14-2018, 07:49 AM
#18
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Joined APC: Aug 2006
Posts: 1,820
Originally Posted by kronan
Quick question. Why on earth would the Union do that?
For the same reason the union sold the last contract with misinformation.
2nd Question. How long does it take investments to snap back from the typical downturn?
It has taken as long as 13 years since I have been here.
3rd Question. Assuming there's No Floor....why would there be a hurdle rate?
Look at the presentations to see why there is a hurdle rate.
4th Question. You seem to be implying that there's no Bottom to the value of the notional shares the VB plan creates. But if there's no Bottom, exactly what does the PBGC guarantee? And why should FedEx pay premiums if the PBGC insurance is worthless?
The PBGC doesn't guarantee what the plan is worth. They guarantee if the plan goes under, that they will assume payments, at a discounted rate usually.
5th Question. If I believe the Internet rumors of "Not a Single Person I've talked to is Pro VB plan"...how on Earth would something that anecdotally 90% of FedEx pilots are opposed to with a 2% floor, pass without a floor?
Because the union will convince enough people that their plan is so secure, it doesn't need a floor. Just like they convinced enough people that they knew what lie flat seats and known reserve days meant.
For the same reason the union sold the last contract with misinformation.
2nd Question. How long does it take investments to snap back from the typical downturn?
It has taken as long as 13 years since I have been here.
3rd Question. Assuming there's No Floor....why would there be a hurdle rate?
Look at the presentations to see why there is a hurdle rate.
4th Question. You seem to be implying that there's no Bottom to the value of the notional shares the VB plan creates. But if there's no Bottom, exactly what does the PBGC guarantee? And why should FedEx pay premiums if the PBGC insurance is worthless?
The PBGC doesn't guarantee what the plan is worth. They guarantee if the plan goes under, that they will assume payments, at a discounted rate usually.
5th Question. If I believe the Internet rumors of "Not a Single Person I've talked to is Pro VB plan"...how on Earth would something that anecdotally 90% of FedEx pilots are opposed to with a 2% floor, pass without a floor?
Because the union will convince enough people that their plan is so secure, it doesn't need a floor. Just like they convinced enough people that they knew what lie flat seats and known reserve days meant.
10-14-2018, 07:59 AM
#19
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Joined APC: Jun 2015
Position: Fetal in the hub
Posts: 406
Originally Posted by kronan
Quick question. Why on earth would the Union do that?
Originally Posted by kronan
2nd Question. How long does it take investments to snap back from the typical downturn?
Originally Posted by kronan
3rd Question. Assuming there's No Floor....why would there be a hurdle rate?
Originally Posted by kronan
4th Question. You seem to be implying that there's no Bottom to the value of the notional shares the VB plan creates. But if there's no Bottom, exactly what does the PBGC guarantee? And why should FedEx pay premiums if the PBGC insurance is worthless?
Originally Posted by kronan
5th Question. If I believe the Internet rumors of "Not a Single Person I've talked to is Pro VB plan"...how on Earth would something that anecdotally 90% of FedEx pilots are opposed to with a 2% floor, pass without a floor?
I am against this plan. I think the entire thing is a fools errand. It would have been an entirely different matter if the company had come forth and said we would like to propose an alternative to the A-plan and its would look like XYZ. But instead we've gone to them cap in hand with a proposal that we're arguing is going to be "mutually beneficial" for all parties and no downside risk to the pilot group.
If its too good to be true it probably is.
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