StarClipper

Oh please stop with that BS scare tactic, I’ve heard that over and over again. There are only two ways the company can get rid of the A Plan.
1. If we voluntarily give it up.
2. The company declares bankruptcy

We all know it’s expensive to maintain, however ever we earn it and the company can afford it period. As long as upper management can keep their bonuses coming, I expect my A Plan to be funded. And if we can’t improve the A Plan, live it as is and increase my B Plan + give me bonus based on profit. I’m not asking for much, they make profit I get bonus, if they don’t then no bonus for me. I’ll even try to get them business while I’m on the road.

Noworkallplay

I have always made the tough calls. I call in fatigue if I’m fatigued. I call in sick when I’m sick. Yeh let’s pull out of an agreement in hopes the company will come crawling back, which would not happen and you darn well know it. The freight is moving in case you haven’t noticed partner. Oh and they ain’t in section 6 so they would tell you and the other cry babies to shove it where the sun don’t shine. Tell your buddies and you to step up and then they may look at this pilot group as something but a bunch of blowhards. We still have guys deviating and bailing out the company when flights are canceling left and right and they go on social media wondering what they can do. I just laugh. What a pathetic joke. The problem is our pilot group as a whole. We have guys that have been at this joint for 20 years and they still don’t understand when you deviate you have completely taken the whole risk. But it’s all about me me me and it bites them in the backside. Then I get a good laugh bc they are so ignorant.

Fr8Master

of course not, they don’t have time to be. They are too busy being Medical Professionals who specialize in global viral pandemics.

SaltyDog

We started with a 1% DBP, retroactive for 10 years when we started. By law, this required a substantial payment for funding. Retro is very expensive. Thus, unable to reach a 2% as FedEx. So ALPA FedEX pilots have a 2% "whole Life" DB and IPA UPS pilots have a 1% "Whole life" DB.
The workaround? A Flat dollar "Term insurance" plus up that extends beyond the amendable date and captures each group of older pilots. We have don this each successive CBA. Again on this next TA. I can assure you, no IPA pilot as they age will ratify a TA that does not continually increase the DB plan through the flat dollar increase of "term insurance" on top of the "whole life" DB plan.
You appear to think this is band aid approach is a failure. Not sure why ALPA FedEx does not consider this model for you all. It is all on UPS shoulders. I use a B plan for my own retirement risks. Even the "band aid " is absolutely known, even if go out on LTD. No different than current "whole life" DB.
You may think we are the dumb ones, but we have increased it every contract we have since its inception, and by its nature, it will be a required element of increase to pass any TA.
Cheers from a band aid guy.

DR K

Questions for the Variable (Stabilized) Benefit Plan fans in the audience -

1 - If, in a post-2006 PPA world, we are "now left with a pension that is massively expensive and the fundamentals were not built around the new regulations" and "It’s massively expensive to raise the benefit" of our current A-plan, could you please explain (or have our actuarial firm explain) how we can still have a 2006 PPA-compliant DB fund that qualifies as a PBGC protected fund based on its underlying investments and NOT be subjected to the same massively expensive funding requirements to improve it? Is it through the power of stock market investments? Would you be surprised to find out that from the time of the 1999 contract that is referenced in this discussion through March 23, 2019 the S&P/Dow/NASDAQ are essentially at REAL NEGATIVE RATES OF RETURN?? (This chart is from 2000 - March 18th, so the Dow is down another 2000 pts/10% from that although it's back up a bit until tomorrow) How is all of this future wealth possible with the V/SB plan without a much higher price tag without going to the casino? Is stock market exposure/risk really the missing ingredient that company is not properly utilizing to increase our retirement checks?




1a - The PBGC issue used to be a joke, like "if FedEx retirees are needing the PBGC payout then the country is going down the tube and civilization is coming to an end." Current events now dictate that PBGC protection needs to be understood beyond a doubt with a V/SB plan investment structure that relies more heavily on risky stocks. Will the V/SB plan even qualify as a DB plan because it does not have a "defined benefit" per se? If you read the PBGC website, this plan does not fit in the description of any DB covered plans. If our V/SB plan loses 30+% of its assets like is going on in the stock market as we speak, does the company have to make up the difference in cash to comply with funding requirements or pay much higher PBGC premiums? Even if we only get 30% PBGC retirement check for the remainder of our lives due to bankruptcy/plan termination, it is better than 0 amiright?

2 - Is it really that easy to "change the formula" we use to calculate our liabilities to circumvent the PPA funding requirements so the company doesn't have to contribute as much yet our lifetime annuity increases? Inconceivable! Seems like a pathway to fines or lawsuits or disqualification from "pension" status and disappointed retiring pilots. Seems like we might even disqualify ourselves from the 06 PPA requirements of pensions and possibly expose our legally protected fund to unknown risk. If this gets "Munsoned" does it expose anyone in particular to lawsuits for fiduciary negligence?

3 - Do you personally share the actuarial firm's threshold of acceptable risk, even after the seven sigma events of the last 2 months? If so, you probably wouldn't be as concerned as I am that their website tells employers that V/SB funds are great because employers can "Expect stable annual contributions because you share investment risks with covered employees." ie, you and me taking it in the wallet. Don't you like having an A fund that is as protected from stock market risk and a B fund that you can subject to all the risk you want? That chart above shows near real negative rates of return on those indexes over the last 21 years, and no fund manager can consistently beat those indexes and pilots are a million times worse than they are when it comes to investing! In many ways, a rock solid A plan protects us from ourselves!

4 - Don't you think that sometimes doing nothing is better than doing something in a panic? Shouldn't we let this carnage and cleansing of the financial system and airline industry that many of our friends are having to endure run its course before we put all our chips in on an untested retirement system? Please understand the MLB has nothing like this whatsoever and we would be the first "millionaire" test group of this thing. Maybe we should get serious about improving our current A plan and B plan and not go to the casino because the company said "no." If we are furloughed for multiple years how does that effect getting paid for every hour flown calculations in the V/BS plan? If the company has skated by since the 06 contract without having to improve our A plan thereby benefitting from inflation while we did took a hit, maybe it's time that they are asked to distribute some of that ROI towards maintaining our standard of living in our short retirement years. A-plans are expensive, no doubt about it. But isn't that a cost of moving high priority cargo to every corner of the world? Let the company fund our A plan improvements from our profits we can play day-trader with our B plans.

Those are questions for the supporters of the V/BS plan, and I hope you can explain it because I have not had those questions satisfactorily asked or answered by anyone.

Final question...
5 - Where did all of the V/BS literature from the actuarial firm go on the FDX Alpa website go? It used to be the most prominent topic but now it is completely scrubbed (or am I looking in the wrong place?).

Knibb High Football Rules! Dr K.

JB130

Good question....my answer is long but please stick with me through it. The A Plan is essentially an annuity, which is a type of investment vehicle that's been around for about a century. An annuity is a close cousin of a life insurance policy in that the underpinnings of both are based on actuarial tables and simple math. Roughly speaking in simplistic terms, the formula goes like this:

If the objective is to produce $130k in payments in a given year (or $10,833.33 per month) for life, what lump sum must be used to purchase an annuity contract for an individual of a specific age (actuarial) to produce said payment.

It's a simple product. It's a tried and true, proven method for providing lifetime pensions that has been used successfully for a long, long time in virtually every industry. In other words, it's kinda hard to mess that one up. The reason the Company and the rest of corporate America have fought to do away with such pensions is because of this simplicity. That simplicity being the lump sum they must cough up to produce the contractually obligated monthly pension payments. And by cough up, I mean it is real money they must transfer to someone else. They cannot use accounting tricks to make this lump sum payment....again, it costs them real money, right now! They'd rather not have to do that...they'd rather use accounting tricks to avoid having to spend real money. Regulations that flowed out of the last round of massive government bailouts a dozen years ago allowed corporations much more flexibility (wiggle room) in accounting practices in the area of pension solvency except annuity-type pensions. Annuity-type pension funding requirements were actually tightened. Instantly, other, more creative types of pensions became the prettiest thing in the room.

Remember talk many years ago about privatizing Social Security? Opponents of that idea in Congress waged a fear campaign by claiming such a move would result in lost pensions and destitute seniors homeless and hungry on the streets because folks would be losing money in the stock market. This fear campaign hid the real reason for the opposition and that was the "privatization" wasn't really about putting your SS funds into the stock market, it was about how Congress funded the pensions. The privatization part would have meant that Congress could no longer use accounting tricks to fund today's pensions. It would mean they would have to use real money, not "accounting money" to fund each individual's pension, in their own name....that's what was meant by privatization. The fallout from that battle are the Social Security Benefit statements we now get each year showing how much SS pension we have coming to us. These statements are cleverly designed to look just like our other financial statements but the numbers they print are merely accounting tricks. You do not have a true individual account at Social Security. The accounting tricks used by Congress function exactly like a Ponzi scheme in fact. The SS deductions from your check don't go into "your account," instead they get redirected to someone drawing SS payments today.

Sorry for the long explanation but I think context is important here.

To address your question again. Our negotiators back then asked for a standard annuity pension and that's what we received. There's no wiggle room in that type of product. They didn't have to come up with any formulas beyond standard actuarial tables and a final salary plus years of service. Simple! They didn't have to negotiate floors or convert any money into shares of a fund and then re-convert them to real money. They didn't have to reconcile how the formula might change with LTD or any other contingency. It was simple....if we max out the plan, we get $130k per year for life.

The Company, understandably, is balking at improvements for the same reason certain members in Congress opposed SS reform and the same reason the rest of corporate America has coerced labor away from them....it costs them real money, right now.

If I owed money to someone and was given a choice, I'd much rather give a "promise" to pay them rather than actually pay them.

And if anyone thinks the PBG is our savior and will catch us if all else fails....just ask any of our brethren at Delta and United how that worked out for them....ask them how many pennies on the dollar they are receiving. I'm quite certain they would dispel any notion that our pension is fully insured.

Gloriousprofits

https://www.pbs.org/wgbh/frontline/film/retirement/

I very respectfully say that many long time FedEx pilots may lack some perspective as those that have been on the outside. Bankruptcy is a corporate strategy and leaving your money with someone else under the promise they will pay you later is a tough one for a guy who’s airline vanished after 9/11, worked under concessions for a decade, and was furloughed after 2008. I am now very thankful to be here at FedEx but I would prefer to have my check than be promised a payment later.

SaltyDog

So no Pension plans at all? Profit checks? Sincerely Curious your wish. Pay checks at max tax rates? DBP has benefited many pilots thus far. Myself, wanted to work at only three profitable airlines when was in job hunting mode decades ago, FedEx, UPS, Southwest. Least likely to go under under reorganization. Very fortunate it worked. Now many years into the profession, those three still well positioned financially and market wise. The DBP has good odds being around along time at FedEx and UPS.

The goal is increasing it for future. Delta profit sharing just cratered unfortunately. FedEx and UPS still have a DBP. FedEx and UPS still have good hourly pay. The market is the market, We are all hourly pay bench marked by NMB. This include the non DBP airlines.

Don't expect extra increases to paychecks to cover loss of DBP funding. Facts are facts based on ratified contracts in the airline world. because the non DBP airlines do affect our ability to negotiate. These non DBP companies do keep our pay similar. So extra pay to cover your DBP loss isn't likely to pass FedEx management with a tacit NMB agreement.
Cheers

dckozak

I find the timing of this discussion interesting. True, Fedex is in a good position relative to the greater aviation industry, and will expolt it best they can, as long as they can. As armchair capitalists, working for Fedex, we applaud that. As part of labor, whereas our brothers on the pax side are (soon to be) displaced and banging on the door at Fedex, we can expect nothing less than blank stares from Executive management as they have us under contract for another year than (based on all past practice) a couple more years of delays, counter negotiations, legal maneuvering, etc, till we wear down and accept a sub par contract. Do we have anything in our past history to suggest otherwise??

The A plan WAS the crown jewel of our contract in the past. Favorable governance at the federal level has allowed industries in general and Fedex in particular to decimate various safeguards, pay protections and other negotiated "good deals" of organized labor contracts. Fedex's beancounters have seen the annuity based retirement we (uniquely within Fedex) have and seen to it that if we won't negotiate it away, time and inflation will do their job for them. We thought (naively) that we could avoid an A scale, B scale retirement within our pilot force and instead of protecting the pilots on the property with an improvement in our current plan; we have settled for a withering A plan for all pilots, old and new at Fedex.

Yes we did it to ourselves, those of you in the 50% + who voted for it (and would bet many would not admit to it). We all love draft, VAC buytback and many other goodies that are a good deal for the individual, but hamstring the collective. We are our own worse enemies, and Fedex thanks you for it.

golfandfly

A lot of us have been through major airline furloughs, and I am one of those. Great to have a A and B Fund. It’s a great plan, we just need to improve it. I’d really like to see them look hard at the flat dollar concept. It might be a way to increase our pension but limit the company’s cost. Not saying it will work, but it’s definitely worth a serious look. I don’t care if it needs to be renegotiated. UPS has successfully improved their retirement this way and continues to increase their retirement. I’m not advocating the exact UPS plan, but maybe see if we can make a similar plan work here...

Just to be clear, our union does some great work for us. Our negotiators try. But we continually make poor deals, like our CBA and OIM.