Retirement Question
 

I seem to remember getting some information prior to the switch to Fidelity that said we could have a 3rd party manage our retirement account instead of Fidelity. Has anyone done this or have any information on it.

Fidelity is the third party.

If you wish to take money out of your 401k and give it to a 3rd (4th) party to manage, you CAN take money from the portion of your 401 listed as SBA (Sick Bank Account) and move it to another company under a self-directed IRA. This has to be done "hands-off" by you to avoid any penalties or taxes. By doing this, you can have a portion of your 401k managed by another company other than Fidelity.

"Before investing, consider the investment objectives, risks, charges and expenses of the fund or annuity and its investment options. Contact Fidelity for a free prospectus and, if available, summary prospectus containing this information. Read it carefully.":D:D

Fees?
 

Are Fidelity's fees the norm?

Previously it wasn't quite kosher to hand off your login credentials to allow various folks to make changes in your Retirement funds.

Now it is, and there are a couple of vendors happy to sign up and manage your funds for you.

Via Fidelity, either the standard options or in the Universe of Investing via the Brokerage link

IIRC, Vanguard charged $7 for stock trade (brokerage account), Fidelity is $3.75.

Could someone explain the retirement contribution at FedEx? What is posted on the profile page doesn't quite make sense to me. I'm guessing the 500/yr match is a typo? Do they do match up to IRS limits? Do they contribute a % to 401k regardless if the pilot puts any in? Is this reirment better than or equal to what Delta offers? Some clarification would be appreciated, thanks!

401K:
up to $500/yr
401K Matching: Yes
A/B Fund:
2.00%/8%

Not a typo.. They contribute 500 bucks and you contribute the rest of your 401k.

Depends on age I think!
 

1). If a pilot contributes $1,000 to a 401K for the year, company gives a $500 match. Yes, that is it for employer match for 401K.

2). FedEx also contributes 8% of income up to IRS limit ($280,000 this year I think) into a B Fund. $280,000 * 8% = $22,400. (goes to 9% in Oct of this year or next, not sure which year)

3). Regular sick account (RSA) of 72 hours a year go into a Disability Sick Account (DSA) if not used. If DSA goes above 686 hours at the end of the year (about year 10 of not being sick...ever :rolleyes:), FedEx will deposit extra sick hours into retirement account at pilots hourly rate. 72 hours * $XXX.XX/hour = $XX,XXX. IF DSA payout exceeds the IRS annual limit ($56,000 under age 50 or $62,000 if 50 or older), it paid out as taxable pay.

4). Pilot can contribute $19,000 into 401K. And if IRS annual limit has not been exceeded, FedEx allows after tax contributions upto the annual IRS limit.

5). A Fund is 2% for each year of service up to max of 25 years * high 5 year average (limited to $260,000 by pilot contract). Max pay out is $130,000. Not part of IRS annual limit mentioned above.

Comparing to Delta, they contribute 16% of eligible earnings...upto the IRS limit of $280,000. (I don’t think they have cash over cap, which would put extra money into regular pay.) Delta has profit sharing as well. I think they are somewhat similar with our A Fund & b Fund if you are not “young” because FedEx allows pilot to max the IRS limit, but it is out of their pay. Time value of money may make Delta better if young enough to grow the retirement account.

FedEx Alpa is trying to sell the crew force on freezing the A Fund for a Variable Benifit retirement vehicle. Not worth discussing since it is currently being negotiated so NO ONE KNOWS what it really is yet.

Flying Boxes,
our B plan goes to 9% January 1st.

Delta DOES have Cash over Cap. And profit sharing is pensionable. One of our transitioned Delta Pilots pointed out that a Delta Pilot can use their Profit Sharing tool to have 100% of their profit sharing deposited into their DC as permitted under a 401(a) plan.
Asking a Delta Bud about the whole process and his confusion over the issue leads me to think not a whole lot of Delta folks make use of it that way. Some of whom have commented on the Delta forum here that doing so just makes the Cash over Cap start early. Others totally miss the deadline.

So, what else is new regarding pilots and $$.

The equivalent value of our current A plan. In general, if you wanted to generate 130k in cash flow without fear of outliving your savings, you would need to accumulate roughly $3.2M. Over a 25 year period, at a 6.5% return, that means saving $4,273 each and every month or $51,276 each year. If you don't do that well, or want to be a bit conservative and still hit the goal. Then at 5.5% returns you'd need to save $4,984 each month or $59,808 every year.