golfandfly

Yes, I did state that their 30 year Capt will have a higher benefit than our 25 year pilot (in 2023). Again, I’m not in any way say I would trade with them. I’m simply saying that their pension benefit has been increasing while ours has been stagnant. They continue to make gains, and if the trend continues, it will eventually overtake our pension.

I’ve been interested in this concept for years. I think it’s just something to seriously consider.

FXLAX

Fair enough on the comparison of the dollar amounts.

But I still don’t give too much credence in their gains and that supposed trend. If our pay rates were a lot lower than theirs and after one bargaining cycle we got up to 75% of theirs and then the next cycle got to 90%, I wouldn’t hail that as some great thing. Even if on the next cycle they finally matched it. Until they surpass it, then there will be a pattern to bargain off of. If anything, their lack of ability to surpass ours has hindered our attempts to make gains. And that will still be the facts as they exist on our current bargaining cycle. Management simply points to them and says, we don’t need to compete with them because ours is already better.

Noworkallplay

And as you can see everyone can find a way to pick at every type of A plan. Guess what? We have problems the rest of the industry would love to have with this debate. The way I see it is this:

1.) We asked our union to do work on investigating how we could make improvements to our A plan.

2.) They hired numerous outside consultants/professionals and spent tons of money researching this subject, as we asked them to do.

3.) They boiled it down to a few options and picked the best for what they thought suited our income and career.

4.) We all have the same amount of votes (1)

5.) We all have the ability to read/listen to the material and be involved. Its apparent some look at it and some don't. Either way its your dues money so might as well do your best to be educated.

6.) If you are unable to look at something new then you are not adaptable. In the business world if your not adaptable you go out of business. Look at our business for example. We are “All in on E commerce” according to Fred last earning call. This is an adaptation from last year when the brass was beating the “we are a B to B company” drum. They adapted because thats what the market required. Because they adapted FedEx won in these current markets. Now lets see if our pilots will adapt to changing markets.

kwri10s

While I appreciate that you are trying to get involved in the process, you need to hear what the union negotiators say and then remember that later when they change what they are saying. In time you will realize that if they are not just flat out lying to us, then they are grossly group-thinking the processes. They spend so much time dealing with issues that they miss the trees and the forest.

Just a few quick summaries for you. This last contract is the only contract where we did not address A fund improvements at all. Well, that's not entirely true, we did improve our B fund so while we did not improve the DB portion of our retirement package, our total retirement package was improved, sort of minus inflation. There were other more important issues on previous contracts and smaller DB tweaks were acceptable with comparable B fund improvements. (I'm not in the weeds enough to get the specifics of the incremental changes for the previous 06 contract, but there was effort and improvement for sectors of the crew force with the understanding that the complete package would be addressed in the next contract and the majority of the pilots that would retire under the 06 contract were improved). The 2015 contract was the first contract where A fund improvement was issue number one with the crew force and the ball was almost completely dropped. The worst part was our MEC preached to us repeatedly that "they got to see FDX books for the first time ever" so they understood where the company was coming from and they "now understood" how the retirement plan was funded. Of course, a year post signing the Neg chair told us that they "now really understand" how the retirement plans are funded when he trotted out the VBP for our enjoyment.

So let's examine the VBP or pancakes or whatever they want to call it and the option from the last contract to "split" the retirement into two options. First, the split retirement option. I think you'll find most guys think that the best way to transition from a total DB plan to a hybrid plan would be to "allow" the members to choose the method of retirement balance they want and are comfortable with. Four different options with different A/B mixes. Never to allow a fully Zero DB or fully Zero B. Then you choose what you want, or some option of choice. The plan proposed was for new hires to have a separate retirement scale. This industry has learned from years of experience that separate anything always leads to the younger pilots getting screwed. Always!! The "old guys" standing up for you is what they are supposed to do to save you from all of us that can be our own worst enemies even though we don't mean to be. You might not remember but it took years and years for the legacy unions to get rid of the B scale. Thousands of guys paid a lot of lost wages because something that saved money near term morphed into an industry standard for years and years. I have no idea how the new hires under a split plan would have gotten screw, but it would have happened. On this next contract, the majority might have agreed to drop the split guys from 17% to 12% if we got to improve the DB plan portion. It would have happened somehow, someway, on some issue. Just believe it was in your best interest in the long term. That's why it is still up to you to make sure we get it all fixed for the next new guys.

The VBP or whatever we want to call it now has to be the worst idea a union has come up with ever. I don't think any company with a DB plan in the USA has ever changed from a DB plan to a VBP. So the thousand of companies that are overseen by Fidelity, Vanguard, ING, etc with the tens of thousands of professional money manager experts, no one has ever advised their companies to change. Why we think that our handful of pilots have managed to come up with some Magic Plan that none of all the professionals in the country combined ever came up with is crazy. There are a handful of organizations that have implemented something similar to a VBP, but all of them are either in bankruptcy talks or they are fraternal organizations. The Fraternal organizations are reorganizing what is closer to a B fund into VBPs. They are not covered by DB plans. The favorite of the Neg Comm to throw out is MLB which has a similar type of fund. However, it was initially funded by a 6 Billion $$ funding from the TV contract. Yes, their pancakes grow and mature. But the average MLB participant has 35 years for the pancakes to grow from that massive seed package, we don't. You like to dig online, feel free to dig into Chiron (sp?) and Blitzteen (sp?). They both tout that they "invented" the VBP. We hired Blitzteen to advise us on ways we could improve our retirement package and surprise, surprise he advised us that the best method was this plan that no one else has done and he invented. He then "proved" his theory by having Chiron crunch the numbers to "show" how well we could do under this theoretical new plan. This is an unproven plan at best and an unfunded plan at worst. Here's another screw the young guys thought, if the market has a down year or two, the guys who have retired will still get paid. You know who's going to have to continue to contribute to a shrinking fund...the young guys. It could be social security all over, with no government backstop to refund it. There are a whole lot of potential bad scenarios, but not a whole lot of really good outcomes. Call your professional money manager at Fidelity and try to explain the plan to him/her and see if they recommend it.

I know old guys can be afraid of change and we know that, but change is not always an improvement. Try to be more cynical in your watching of union videos and talks. Anytime you hear "proposed", "estimated", "forecast", "projected", etc it usually means they don't really have a handle on the numbers or they don't know. Try asking your block rep some simple questions like how many guys are currently retired? or what is the average death age of those that have retired? or what is the average number of years FDX pilots received A fund benefits prior to death? or think up your own. You'll be surprised by the lack of actual answers.

BoilerUP

As a Brown outsider...

Yes our defined benefit will not exceed the existing FDX defined benefit until 2023, and then only if you hit 30 YOS. That said, our defined contribution plan is still 3% higher than FDX which amounts to $7800 more into MPP each year at the FDX $260k compensation limit.

While this is your thread, we pattern off each other and gains for one can help provide leverage for gains for the other.

In order to maintain your existing 25 YOS $130k max defined benefit, you'd need a flat dollar amount of $5200/YOS, about 18% higher than the UPS 2023 rate of $4400/YOS for Captains. Of course you'd need to determine/negotiate if your FDA YOS rate would be for everybody or Captains only with a smaller rate for pilots who never flew as Captain, and while I'm no ERISA expert I'd be curious what funding requirements for that would look like vs. 2% FAE. Of course, it'd have to be negotiated every CBA...but that would provide an opportunity for incremental $100/YOS bumps to provide increased value/inflation hedge over time, and the change in mechanism could provide an opportunity to negotiate an extended YOS max to 30 for those who would be able to go beyond 25.

Purely academic...not sure there's a 'right' or 'wrong' way so long as the objective gets met or at least the needle moved in that direction.

Good luck!

HIFLYR

Well here is the rub the union did not actually have anyone run the numbers on different retirement scenarios, like simply increasing the B fund and getting cash over cap to see what the actual numbers would require. I personally asked this question and that was the answer, yes they discussed them internally but did not actually investigate them like the Variable Plan.

ColCargill

When do I get to cast my vote? After 2.5 years of negotiating? After 2.5 years of going down the wrong road; a road a majority does not want to explore?
I have taken all of the surveys and not one has asked whether I want the pancake plan part of the retirement strategy moving forward. I have never been asked what plan do I support. We are not asked these direct questions because the union already knows what the response will be. Maybe if they do a few more podcasts we will see the light.
The time is now for a web survey to determine the direction the members want this negotiating to go.

golfandfly

They fell in love with the variable plan and had tunnel vision. They didn’t seem to really look at other options, just lip service. Even though this plan was unpopular with the majority of us, they were hell bent on seeing this through. Unfortunately for them, the company laughed when we submitted this idea...

golfandfly

This is very true. Just ask the question, are you in favor of the pancake plan? My guess is the it would be overwhelmingly unpopular. They’ll produce a survey and ask “do you want the negotiating committee to try and improve your pension?” Of course, we’d all like a better pension. But the union will take that as an endorsement for their retirement scheme.

BlueAvi8tor

Can you stop it with the smart assed comments and ask them like an adult? This is important stuff and that nonsense is going to derail it like every other thread on this site.