Fedex Retirement Plans
#1
Gets Weekends Off
Thread Starter
Joined APC: Dec 2007
Position: Brazilian Left Seat Driver
Posts: 197
Fedex Retirement Plans
Hi all,
I keep hearing everywhere that Fedex and UPS have great retirement plans but Im not really familiar with how it works. All I see in APC Fedex page is $500/yr in 401k, A/B fund 2%/8%. I have always worked in places where they just give you 401k matching, and Im trying to learn more about the details on Fedex retirement.
So what does the $500/yr mean (401k)? What is the difference between A fund and B fund? does fedex offer defined contributions like AA’s 16% into the 401k?
Please excuse my ignorance, Im just trying to gather as much information as possible since Fedex is currently my top choice for my future and I want to understand all the details in case they decide to hire me one day.
Thank you!
I keep hearing everywhere that Fedex and UPS have great retirement plans but Im not really familiar with how it works. All I see in APC Fedex page is $500/yr in 401k, A/B fund 2%/8%. I have always worked in places where they just give you 401k matching, and Im trying to learn more about the details on Fedex retirement.
So what does the $500/yr mean (401k)? What is the difference between A fund and B fund? does fedex offer defined contributions like AA’s 16% into the 401k?
Please excuse my ignorance, Im just trying to gather as much information as possible since Fedex is currently my top choice for my future and I want to understand all the details in case they decide to hire me one day.
Thank you!
#2
Fedex Retirement Plans
FDX has basically three retirement plans:
401k, with a max of $500 company match
Defined Contribution “B-Plan” of 8%; basically 8% of your gross earnings (up to the are deposited into a brokerage account in your name up to IRS limits for annual compensation and defined contribution, which includes 401k. Often times referred to as a Money Purchase Pension.
Defined Benefit “A-Plan”; this is a traditional pension. FDX has a benefit of 2% final average earnings (“high 5” of last 10 years I think, not 100% sure) up to their contractual income limit of $260k, with a max years of service of 25 years.
What does this mean?
Lets assume you work 26 years at FDX, and average $320k in your “high 5” years.
Your defined benefit will be 2% of final average earnings (260k contractual limit), which is $5200/year of service. Max YOS toward the defined benefit is 25, so $5200 * 25 = $130k annual defined benefit.
Now lets say you work 18 years, with a “high five” of $240k. 240k * 2% = 4800/YOS * 18 YOS = $86,400 annual defined benefit.
Disclaimer: UPS guy, so hopefully I’m not off on anything. In case you care, we get no 401k match, a 12% defined contribution, and have a 1% FAE or (more lucrative) Flat Dollar Amount Defined Benefit that basically gives retiring Captains $4k per YOS (FOs get 80% CA amount) up to 30YOS. ERISA & IRS requirements make the flat dollar necessary to renew every contract negotiations.
Hope this helps...
401k, with a max of $500 company match
Defined Contribution “B-Plan” of 8%; basically 8% of your gross earnings (up to the are deposited into a brokerage account in your name up to IRS limits for annual compensation and defined contribution, which includes 401k. Often times referred to as a Money Purchase Pension.
Defined Benefit “A-Plan”; this is a traditional pension. FDX has a benefit of 2% final average earnings (“high 5” of last 10 years I think, not 100% sure) up to their contractual income limit of $260k, with a max years of service of 25 years.
What does this mean?
Lets assume you work 26 years at FDX, and average $320k in your “high 5” years.
Your defined benefit will be 2% of final average earnings (260k contractual limit), which is $5200/year of service. Max YOS toward the defined benefit is 25, so $5200 * 25 = $130k annual defined benefit.
Now lets say you work 18 years, with a “high five” of $240k. 240k * 2% = 4800/YOS * 18 YOS = $86,400 annual defined benefit.
Disclaimer: UPS guy, so hopefully I’m not off on anything. In case you care, we get no 401k match, a 12% defined contribution, and have a 1% FAE or (more lucrative) Flat Dollar Amount Defined Benefit that basically gives retiring Captains $4k per YOS (FOs get 80% CA amount) up to 30YOS. ERISA & IRS requirements make the flat dollar necessary to renew every contract negotiations.
Hope this helps...
Last edited by BoilerUP; 09-16-2019 at 08:25 AM.
#5
Gets Weekends Off
Thread Starter
Joined APC: Dec 2007
Position: Brazilian Left Seat Driver
Posts: 197
FDX has basically three retirement plans:
401k, with a max of $500 company match
Defined Contribution “B-Plan” of 8%; basically 8% of your gross earnings (up to the are deposited into a brokerage account in your name up to IRS limits for annual compensation and defined contribution, which includes 401k. Often times referred to as a Money Purchase Pension.
Defined Benefit “A-Plan”; this is a traditional pension. FDX has a benefit of 2% final average earnings (“high 5” of last 10 years I think, not 100% sure) up to their contractual income limit of $260k, with a max years of service of 25 years.
What does this mean?
Lets assume you work 26 years at FDX, and average $320k in your “high 5” years.
Your defined benefit will be 2% of final average earnings (260k contractual limit), which is $5200/year of service. Max YOS toward the defined benefit is 25, so $5200 * 25 = $130k annual defined benefit.
Now lets say you work 18 years, with a “high five” of $240k. 240k * 2% = 4800/YOS * 18 YOS = $86,400 annual defined benefit.
Disclaimer: UPS guy, so hopefully I’m not off on anything. In case you care, we get no 401k match, a 12% defined contribution, and have a 1% FAE or (more lucrative) Flat Dollar Amount Defined Benefit that basically gives retiring Captains $4k per YOS (FOs get 80% CA amount) up to 30YOS. ERISA & IRS requirements make the flat dollar necessary to renew every contract negotiations.
Hope this helps...
401k, with a max of $500 company match
Defined Contribution “B-Plan” of 8%; basically 8% of your gross earnings (up to the are deposited into a brokerage account in your name up to IRS limits for annual compensation and defined contribution, which includes 401k. Often times referred to as a Money Purchase Pension.
Defined Benefit “A-Plan”; this is a traditional pension. FDX has a benefit of 2% final average earnings (“high 5” of last 10 years I think, not 100% sure) up to their contractual income limit of $260k, with a max years of service of 25 years.
What does this mean?
Lets assume you work 26 years at FDX, and average $320k in your “high 5” years.
Your defined benefit will be 2% of final average earnings (260k contractual limit), which is $5200/year of service. Max YOS toward the defined benefit is 25, so $5200 * 25 = $130k annual defined benefit.
Now lets say you work 18 years, with a “high five” of $240k. 240k * 2% = 4800/YOS * 18 YOS = $86,400 annual defined benefit.
Disclaimer: UPS guy, so hopefully I’m not off on anything. In case you care, we get no 401k match, a 12% defined contribution, and have a 1% FAE or (more lucrative) Flat Dollar Amount Defined Benefit that basically gives retiring Captains $4k per YOS (FOs get 80% CA amount) up to 30YOS. ERISA & IRS requirements make the flat dollar necessary to renew every contract negotiations.
Hope this helps...
So for the A/B plans, could the company take it away in a financial crisis? I had an AA jumpseater the other day and he told me about how AA took away their pensions a while back. People who had over 2-3 million dollars saved for retirement, all of the sudden, gone. How could something like this happen?
#6
Gets Weekends Off
Joined APC: Sep 2006
Position: MD11 Captain
Posts: 364
Thank you for the information!
So for the A/B plans, could the company take it away in a financial crisis? I had an AA jumpseater the other day and he told me about how AA took away their pensions a while back. People who had over 2-3 million dollars saved for retirement, all of the sudden, gone. How could something like this happen?
So for the A/B plans, could the company take it away in a financial crisis? I had an AA jumpseater the other day and he told me about how AA took away their pensions a while back. People who had over 2-3 million dollars saved for retirement, all of the sudden, gone. How could something like this happen?
It couldn’t. Money in your name (401k, defined contributions) are yours and a company can’t touch them. In bankruptcy companies CAN (and have done) void economic sections of contracts such as pensions (defined benefit plans).
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#8
Banned
Joined APC: Jun 2014
Posts: 311
Thank you for the information!
So for the A/B plans, could the company take it away in a financial crisis? I had an AA jumpseater the other day and he told me about how AA took away their pensions a while back. People who had over 2-3 million dollars saved for retirement, all of the sudden, gone. How could something like this happen?
So for the A/B plans, could the company take it away in a financial crisis? I had an AA jumpseater the other day and he told me about how AA took away their pensions a while back. People who had over 2-3 million dollars saved for retirement, all of the sudden, gone. How could something like this happen?
#9
Gets Weekends Off
Joined APC: Nov 2016
Posts: 936
No. Your years of service is calculated by month. So if I were to retire next week I would have 18 years 10 months or about 37.7% times my high five. the 31 Dec thing is a good deal that expires soon from our last contract, it allowed pilots who committed a year out to get up to 50 cents on the dollar of their sick bank paid out if they jump through enough hoops.
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