Saltydog

UPS method was considered. Many positives to it. IMO-the ability to never again negotiate for Pension Improvements was the deciding factor.
Based on 2017 model projections, VB plan would've resulted in the equivalent of a $6832 dollar FDA benefit after 25 years and a $7433 dollar FDA benefit for a 30 year career.

I would expect UPS numbers to be somewhere in that ballpark for your TA 203X, but who knows.

Nice thing about FedEx numbers is there's no disparity between FO\Capt. There are plenty of FO's at FedEx "earning" Capt pay+ on the 777. A portion of whom choose to retire as FO's. Very small percentage of FedEx pilots, but it's still a career choice for quite a few who simply like having total control of their destiny and being in the top 5% for equivalent dollars.

I don't recall the exact breakdown, but isn't the FO FDA amount at UPS roughly 80% of the Capt's?

 

Numbers moved over from a JF post, with permission.

PSPP what if's:
Let's assume we voted to approve the PSPP last year (Pilot Stabilized Pension Plan was the last iteration of the name following the adoption of an additional benefit calculation to protect those folks who choose to work 60% of their lines and stay Senior as FO's)

Pilot payroll roughly $1.3B

FedEx was formerly contibuting 5-8% of payroll to the FedEx Portable Pension plan to our non CBA fellow employees, something FedEx terminated last year and switched them over to an expanded 401k starting in 2020.
As Senior employees at FedEx, I'll use 8% as the contribution amount for 2019

$1.3B * 8% = $104M

Let's assume that $104M lost 30%

That puts the value of our PSPP Trust at $72M

Don't recall the total number of retirees last year, but if they were all Capt's their PSPP Pension Benefit would've been $5600,
At 200 pilots retiring that's $1.12M in benefits
At 300 pilots retiring, that's $1.68M in benefits.

So rounding up, that leaves $70M in our new Pension trust with another $104M rolling in for 2020.

Shoot, if all 5k of us earned the DC limits, that would've been a $28M in promised Pension benefits. Even at that level of promised benefits, our Pension Trust funding level would be in excess of 60%.

 

I don’t think that’s a valid positive to use in favor of our pension. It wasn’t negotiated that way and you’re comparing a pension negotiated 20 years ago to the one at UPS updated very recently. The only reason an FO has the ability to retire at maximum pension payout is because the pension has stagnated while pay rates have not and continue to increase.

 

Thanks for the background Kronan -


Some quick barnapkin math questions:


"PSPP Pension Benefit would've been $5600 - (I come up with $5600 x 25yrs = $140k/pilot retiring this year)

At 200 pilots retiring that's $1.12M in benefits - (I come up with $140k x 200 = $28M this year in new retirement payouts)

At 300 pilots retiring, that's $1.68M in benefits - (I come up with $140k x 300 = $42M this year new retirement payouts)


$104M trust - 30% loss = $72M - $42 in benefits = trouble, especially if the market stays flat or loses value in the coming years!


Also where did the numbers for payroll and A fund contributions come from?


Take a look at the IRS 5500 for our A fund filed May 31 of last year. There are 187,000 participants. its funding is broken down by currently retired participants, active participants, and deceased participants whose beneficiaries are all receiving benefits and all groups' lifetime liabilities funded at well over 100%. Its market and actuarial values are roughly $2B and it is insured and reinsured in multiple ways through Prudential and the PBGC. Because of these facts, this plan actually qualifies as a pension and even if we close up shop, the PBGC insurance policy will pay out enough to us to keep the mortgage paid and the lights on in your house. The Variable plan will never have enough assets to securely cover lifetime liabilities and I'm skeptical if a private insurance company or in the worst case scenario PBGC would cover the plan because it is just a big pooled stock market gamble. Nothing I read or watched included any info on corporate bond investments or insurance swaps or any other actuarial-based investments that protect pension funds while earning required returns. If this isn't a big 401k style fund, we should see some numbers on yearly liabilities and actuarial tables and assumed interest rates to be funded at 100% for all participants. I only remember seeing NAV's and market returns like a would in a B fund. Is this even a pension??


https://www.efast.dol.gov/portal/app...execution=e2s1 (enter 621721435 in the EIN field)


Read this and you will sleep better knowing about our A fund and you will feel like we can ask for an increase in benefits and the Variable fund will give you literal nightmares. (Make sure you read the 5500s for the FedEx Employee's Corporate Pension Plan and not the FedEx Employees Corporate Savings Plan since that is the B Plan)


Thanks! DR K

 

All great in theory. This assumes you get the "pie in the sky" version of VDB. This takes us back to the part about pilot negotiators...........

Pipe

 

Per the IRS on Defined Benefit Plans...If your plan is a money purchase pension plan or a defined benefit plan, has it complied with the minimum funding requirements of section 412? Check that appropriate contributions were made to the plan.


If your plan is a defined benefit plan, an enrolled actuary will have to compute the funding required for the plan and sign Schedule B of Form 5500 setting out the plan's funding status. If your plan is a money purchase pension plan, the contributions required by the plan document must be made in order to satisfy the minimum funding requirements of section 412.

How in the hell will the Variable Plan satisfy actuarial requirements of a DB plan if it only has 3 years of retirement payouts in the trust? Could it be that this thing is not a DB plan at all and will not be supported by any insurance policies for beneficiary pensions or even worse will evaporate if the company goes under unlike our current actual DB plan? Did the brochures and YouTube videos talk about actuarial funding requirements or just flash the big dollar sign checks that we pilots drool over?

 

Good thing we are not using pilot negotiators. Im told we spent a substantial amount on retirement professionals and actuarial firms doing this 3 year project. Its the same thing we did when we got the original A plan. Keep in mind ALPA national also has numerous staff (attorney’s and accountants,etc) that pilot groups use. If you went to any of the seminars you would have gotten this information.

 

When the new plan is young (3 years old) it only has a liability for 3 years worth of accrued benefits. Simple. As it gets mature it then has more liabilities.

 

Yeah, we spent over $1 million combined on one professional and one actuarial firm. The problem is, both entities specialized in this Variable BS plan. I'm sure we got totally unbiased information. And the accountants that you talk about are the same ones that let the NC tell us that the last pay raise exceeded 3% though the numbers clearly showed it was 2.9%. As they say, figures can lie and liars figure.

If this is so great for us and the company, then explain why the company said no thanks when this was first presented to them as and offer less than half way through the current contract. I mean, this was suppose to save them a lot of money, wasn't it? I guess when they keep disappointing share holders, they decided not to negotiate a deal that would save them money and instead decided they would rather spend extra money keeping the current plan.

 

Once again a false statement. In 2017 they had 3 different types of A plan types that they presented to the pilot group. They published the pros and cons of each. The MEC then decided on this particular one. They also added some extra protections such as “end of career look back”. If you went to any of the meetings or webinars you would have known this.

As for why the company didn't bite outside section 6. Well that should be very apparent. First, why would they give us anything outside section 6? Second, the “new A plan” was more expensive the first 8-10 years. Remember our stock price had fallen from 275$ to 130$ during that period. You think it may have been an issue (with other employees and shareholders) to sign on the dotted line for a massive pension increase (for pilots only) while they slashed pension for mechanics, dispatchers and cut management bonuses during that same period? Once again you are cherry picking and not looking at the big picture. Good thing is me, you and everyone else gets one vote. To each their own.