All good info. We currently have an HSA plan that the company puts 4k in annually and then you are allowed another 2,500ish pre tax contributions and a wellness benefit. So total of 7,200ish annually. The number you can put in annually goes up per IRS regulations. So having another account that can only be used for health care wouldn't be a huge advantage for many since we already have an account to do this in my opinion. I would be more interested in just doing cash over cap and having a C plan that way the money is not pigeon holed into only being used for healthcare.

We also have a disability sick account that has spill over once its full. Many outsiders don't know about this. You accrue 72 hours of sick time annually and it maxes out at 686 hours. It takes about 9 years to fill it up then 72 hours of pay every year after that is paid to you and you can front load you 401k with it. A WB Capt is getting 23,400k annually spillover from this. Then at the end of said pilots career they get paid 50% of its value paid in cash. At current rates thats 111,400k. So think if you have 30 years at purple and you fill it up the first 9 years you will on average get an additional 25k annually for the last 20 years plus the 110,000k plus at retirement. Do you guys have this at Brown?

 

I have to say I’m intrigued with the flat dollar plan. I’d like to know more about it. As you know, it’s been difficult for us to see improved A plan gains, but you guys have been able to get nice improvements. Your 30 year Capt plan pays more than our max pension now (25 year).

I’m told that flat dollar somehow lowers pension liability for the company. It might be a possibility for us. I’ve heard the big negative is that it has to be re-negotiated every contract. To me, that’s not a big deal. We negotiate pay and benefits every contract, so I just don’t see why it’s a show stopper. I think this could be a viable, achievable plan. It’s a very simple plan...

 

Just for some context, in today’s dollars, you will spend about $200,000 for you and another $200,000 for your spouse in after retirement medical expenses. Assuming you both retire at 65 and live to the age the actuarial tables say will live.

What he is talking about, we already have today (it’s different than an HSA). But that won’t even cover the entire Medicare B and D premiums. If cash over cap was used to more fully fund our PRP, it would go a long way in ensuring you don’t use retirement money to pay for your post retirement medical expenses.

As for HSAs, that’s only for people who do NOT have the buy up plan. And I’m not sure FDA pilots are able to have a plan other than the ones designed for them. And to clarify, the company funds it with $4,000. You get a $300 wellness benefit for yourself and if your spouse is on the plan, there is another $300 wellness benefit for her. A total of $4600, at most. For 2020, the IRS limits HSA funding to $7,100. So you can elect to have another $2,500 taken out of your paycheck, pretax. And with this HSA, you can use to pretty much pay for all medical expenses, except for premiums, during your pre-retirement years.

We can have both. And both would provide untaxed income that can be used tax free for medical expenses. It’s another way around the IRS funding limit to your 401k. The VEBA HRA has not funding limit. It’s a good thing to have the ability to fund both.

 

The IPA plan pays more than the FDX plan only if:
1. You are a captain when retiring
2. You have an extra five years accrued (it takes five more years than FDX)
3. You retire after January 2023.

This is probably why they’ve been able to negotiate increases each time. They have been behind FDX’s plan and continue to be even after 1/23 because it takes 30 years rather than 25. So it’s easier for them to point out ours and make the argument to their management that theirs needs to be improved.

 

Ding Ding DIng. Im sure the company would love to give us a caped 12% DC plan if we keep our current A plan frozen or a Flat Dollar Pension and increase the years of service to 30 for full benefit. They would scramble for a pen to sign it. Many wont even make thirty years of service at brown or purple but I can guarantee you most will make 25 years of service. Details matter. This isn't a rag on UPS just pointing out the clear differences. We both help each other in the bargaining game. Management isnt dumb they know these vast differences also and how it lowers the cost of the plan and the liabilities.

 

I never said I wanted UPS exact plan. Of course the benefit would have to be higher. I wouldn’t differentiate between Capts and FOs.

If indeed there is a lower pension liability for the company, it might make this a viable idea. Make it $6,000/year ((150k annually after 25 years and that’s a decent improvement). It’s just something that should be fully investigated.

Somehow, UPS has been able to increase their pension and we haven’t. With this trend, it won’t be long before they eclipse us.

 

Absolutely. Our only real peer in pattern bargaining is FedEx. We want you to knock it out of the park. Good luck guys.

 

By your same argument then why wouldn't you look at the new A plan our union put out? You literally are talking circles supporting a Flat dollar formula because it saves the company money and you may be able to get some of it but not supporting the new plan for the same reason. They did look at a plan like this because it was discussed as one of the 3 final products in early 2018 in the hub turn meetings and the material sent out. I specifically remember the variable annuity, our new plan and a Flat dollar type plan. A pro and con document was sent out. I find it amazing all the sudden a few of the nay sayers are all the sudden willing to look at something new. The crying call is lets look at something just because someone else has that formula. Well that’s interesting because by their same justification we shouldn't look at anything that isn't “very common” in our career field, but yet when UPS first got their A plan that formula (Flat Dollar) was a new idea. So by these same peoples outlook UPS shouldn't have ever done it. But now its a great idea. Man I cant keep up.

 

I guess it was just me stating my opinion that their 30 year captain plan does not pay more than ours, as you stated. If you just look at dollar amount, then that statement may be construed as true by $200, in about a year and a half from now (not at present time). But it does take 5 extra years to attainment that small improvement. I don’t see that as better.

As for their improvements, like I said, it’s easier to improve their plan during their negotiating cycles when they can point to ours and pattern bargain off it it. And despite their latest improvement, it’s still inferior to ours.

I wasn’t speaking to it’s viability or liability, etc. If we can attain that $150k plan using their methodology, I’m open to it.

 

The UPS Flat Dollar plan is a true Defined Benefit Plan where the amount is guaranteed. It’s not subject to stock market/bond market risk. It’s not variable. It merely determines the guaranteed benefit in an alternative manner.

Keep our Defined Benefit guaranteed

Keep High 5 FAE formula

Sure - tweak the cap, tweak the YOS beyond 25, if we can

The company is willing to give more B fund (defined contribution) because they don’t want more investment risk (...and neither should we)

Keep (improve/tweak) our True Defined Benefit A Fund....and take more B Fund (....with “cash over cap” if we can get it)