Correct. It’s about to go to $4300 January 1. And correct the captains number. FO is about 3300. I’m just trying to compare apples to apples. I’m just trying to understand why you guys would want to make a change so significant to your A plan.

Question. If you guys were able to get 4300-4400 and 30 years of service, would you still be looking to change? I love the idea of guaranteed money in retirement of ~4400x YOS. Plus whatever the company contributes to the B plan (currently 12%) and whatever a pilot saves in his 401k savings.

I just want to understand what is driving this change for FedEx Alpa. Let’s face it, what you get will be pattern bargained for on UPS’s next contract. Pattern bargaining works both ways, so curious about this subject for UPS’s next contract.

 

You’re just too naive or mentally challenged to understand that our consultants have made a ton of money off of us with their ideas (conflict of interest?). And when we proudly meet with the company and propose our plan, they had a great laugh! You might see where our consultants have a vested interest here. And you are going to believe them without question?

This plan isn’t popular with the majority of us. It just isn’t. Yet the union continues to push this concept on us. Do an unofficial study, just ask the guy flying next to you if they like the plan. I’ve found very few that do.

There are simpler plans. Let’s seriously explore them. Let’s poll the members with direct questions. Seriously, if the majority of pilots prefer the VB plan, then let’s go that direction.

 

I guess im “mentally challenged” for understanding that people don't work for free. I guess I'm one big dummy for being willing to look at different ideas. I find it funny that your calling everyone names who doesn’t fully agree with you, yet you cant seem to understand the new type of A plan because its “to complex”. I guess your the smartest guy in the building. So if your so smart why don't you step up and help with “the fix”. Im sure ALPA would love to have your overwhelming knowledge of this subject. Im sure the company would bow at your feet, due to your knowledge, during negotiations. Heck you should just run negotiations or better yet run for an Officers seat. Then you can fix all the nefarious deals that are taking place.

 

Nowork the union video explains nothing about the mechanics of this plan or its protections and that is what concerns people on these forums and on the line. The video says that the real problem is pilots are resistant to change and that we all need to unify behind their plan. It says that we are too weak to negotiate with the company on current A fund improvements but in a strange twist of fate we are able to get a whole lot more money from the company if we choose this other plan that no other company in the history of the world has ever had.

Notable quotes:

"The PSPP remains nearly fully funded in all market conditions, which really addresses the Company's concern with regard to funding and accounting liability. So the ups and downs and the risk of volatility associated with the current pension plan is reduced quite substantially. And you know, while the investment risk is shifted to the pilot, the plan does provide a guaranteed floor benefit feature to address that investment risk." ...What happens when the huge stock market correction happens and our stabilization fund is depleted? The real answer is we take the hit in retirement income - that is the only way a pension fund can be fully funded in all market conditions! How is there investment risk but the payout can never go down? This thing is risk free!

"The plan design in and of itself mitigates those risks and reduces the probability of finding ourselves in an adverse situation, underfunded and things of that nature. So while there is risk involved, this particular defined benefit plan design, the plan design in and of itself mitigates or hedges against that risk." ...I read a bunch of "mitigates" but no mechanisms as to how this happens in a world where payouts never go down despite tanking markets. The plan design is not explained, unlike our current A fund, which is explained in full and available to be scrutinized down to the penny and share in every investment vehicle they use to fund it. I note another day has gone by and nobody has produced the name of a single company now or in recorded history that has a variable plan such as this that also has a guaranteed floor so we can scrutinize their plan details and protections. It simply does not exist anywhere but we have to have it now or we are dumb pilots who will be destroyed by inflation tomorrow. That is the real fear mongering in the video!

"One more thing to remember about the inflation protection that the PSPP provides is also that due to your ability to maintain your shares in the plan you're able to capture market gains and possibly increase the value of your benefit after you retire. So you're not stuck with a single value in retirement and you may have a hedge against inflation." This thing is all about the stock market and these guys are day trading gurus that do not understand risk. Our A fund should be predictable and stable like it is now and the company is on the hook to make that happen if the underlying investments underperform and they cannot get out of it. These day traders are about capturing market gains of equities which is B fund stuff and destroys the beauty of our diversified retirement system. They are smart because they know that dangling a few extra bucks in front of pilots will get them to approve the riskiest of plans.

I am absolutely convinced that anyone on this plan will have their standard of living negatively impacted by a market correction that reduces the VB/PSPP fund ability to payout. Read any of these pro articles about VB plans! All risk is on the employee because if the market corrects their retirement income goes down. If the company only has to pay the same amount into the plan per year regardless of fund performance, they'll never have to make up for a down year or two or decade. There is no way that a stabilization fund prevents this. What does the stab fund invest in and how does it never run dry???

https://corporatefinanceinstitute.co...-benefit-plan/
https://findley.com/wp-content/uploa...aper-Final.pdf


From the Congressional Research Service 2018 - "Alternative Plan Designs: Variable Benefit Plans ...As an alternative to stricter funding requirements, plans would not become underfunded if participants’ benefits fluctuated with the plan’s investment performance. For example, one plan design has a conservative assumed investment return (called a hurdle rate). Benefits are adjusted upwards if the investment returns are above the hurdle rate and benefits are reduced if the plan’s investment returns are below the hurdle rate. Employer contributions could be unchanged in either scenario. Although this plan structure is available under current law (and is referred to as a variable annuity benefit plan) they are not common among DB plans."

I also note another day has gone by and there is no information on what levels this plan would be covered by the PBGC. Would we get the max 65k per year if the plan terminates? Would it be less than that due to the variable nature of the plan and the risk we take on as employees? What exactly is the PBGC protection because that is a must know item that has yet to be revealed???

This plan could yield some very nasty surprises at age 72 in retirement, all for the possibility of a couple more bucks per month.

What we need are negotiators that use every tool at their disposal and fight to increase our A fund. The company says no, and we do things to make them say yes. That is how negotiations work with successful employee groups. Day traders will not improve our A fund and may very well destroy it. Hope you have a huge B fund from a previous employer or a doctor spouse or some investment properties if this thing passes.

Why would I volunteer at the union to be told shut up and get onboard with this subpar and risky plan???

Serious question nowork - are you a union sme or somehow assigned to apc to sway opinion or even just monitor things here? I ask because you seem to have a mission here beyond informal debating and vetting of this disaster. If so, please get our opinion about how we want to improve the A fund rather than try to give us our opinion. Dr K

 

That sounds a bit hyperbolic, Dr K. I’m not sure which video or union rep proposes day trading, etc. All of the questions you bring up, such as pbgc, hurdle rate, floor rate etc are answered in the comms. I see your point that there are no concrete numbers on what those values are, and the value of the proposed plan DOES hinge on those. They would have to be negotiated to be codified. Did you know that the union proposed a look back provision, wherein you could choose to stick with the old plan upon retirement?

At any rate, an online survey will be released soon, and available to all members, according to the recent PUB meeting. At the recent online PUB event, the leaders are asking for maximum participation so they have valid results. Then the MEC will know where we stand as a group, instead of relying on pilot anecdotes about “my cousin says it’s all a bad idea, and he makes a ton of money as a day trader”.

 

Not all of the questions about the PBGC have been answered. What the MEC has said is that if we go to a new plan, our current A plan would be frozen, but still remain a separate plan. They have also said that the new plan would be protected under the PBGC. What they have been asked, but refuse to address is that since the PBGC will only cover one plan, which plan gets covered and how is the other plan protected? One MEC officer told me not to worry about this, that my concern about the company dumping the unprotected plan in bankruptcy was not reasonable.

 

Sadly Chilitime it is not hyperbole.

There is literally no other variable plan with a savings fund on the side of it to weather market downturns in existence which guarantees a minimum floor value. Variable plans are attractive to financially weaker companies because they can payout less during market turns and the companies don't have to make up the difference. When this pointed out, our VB plan was rebranded as the PSPP. btw - Don't you think that sounds a lot like the PRSP which is our B fund? Intentionally confusion?

The comms stated that those who would have less in the VB also known as the PSPP (not to be confused with PSRP) will be bought up by the company with an annuity to be made whole. So the PSPP (not to be confused with PSRP) will cost more than the current A fund which we cannot get more company money for, and we are going to get even more from them in this new plan to make some pilots whole. Why is there so much money available for the new one and not to improve the old one? The only answer is ulterior motives.

If the market undergoes a prolonged period of lower or even negative returns, and the language codified in our PSPP (not to be confused with PSRP) only requires the company to contribute x% each year to the fund, how will not have a reduced payout when the savings account is depleted. As it stands now, if our pension trust underperforms, the company has to contribute (x+y)% to make it work. In the new plan they never have to make us whole in the event of a huge market correction. Not hyperbole, it will pay you less in retirement and affect your standard of living. In our new plan, there is never an underfunded situation, to there is never a +y% from the company like there is now to get the fund to 100% funded, so who will be on the short end when that happens?

I say "day trading" because the proposal 100% relies on the performance of the stock market to make the payout. The company will never have to contribute more than the codified x% to the fund, even if the fund yields insufficient returns to pay our hurdle rate.

Have you read anything about VB funds anywhere else? It doesn't sound like you know what a VB fund is designed to do from an employer's standpoint If so, do you think a savings account on the side will accomplish the same thing our A fund does now?

It is not hyperbole to say get prepared for the first plan of this type in human history and get ready to have all kinds of decisions by the IRS and PGBC as to how it is protected in the event of plan termination. None of this has been settled by any regulatory agency, and if you are not prepared for a ruling when you are in retirement (planning on this fund to pay you), then this might not be the plan for you. The bet here and the stakes are huge for you and your surviving spouse, and it isn't needed to be made because the union has demonstrated they plan to get significantly more money from the company for the new plan and buy up requirements to make pilots whole. Why not ask for that money to improve FAE or yos improvements? DR K

 

How dare you not agree with him!! You must be “mentally challenged” or you just don't understand. You must be one of those union crooks “trying to sell snake oil”. You must be “making money off of this”. Your part of this whole conspiracy going on!! Are you a mole sent from the inside to “sell” this plan? HAHA SARCASM

Little does this group against the new plan realize, the silent majority may not have the same feelings as them. This scares them to the core that we may be open minded to look at new ideas. So when you respond they will respond with paragraph after paragraph of “personal opinion” mixed with a lot of conjecture. Be ready to be accused of everything after that post!!! Haha

 

So many simple questions you will not and cannot answer. Look at my last few posts I have asked probably 20 important questions. The published papers and videos do not answer them either. Another day with no companies to compare this to. No answers to what happens if the stabilization fund runs dry and the company does not have to contribute more to the fund because of the codification of the plan. No answers to the level of PBGC assumption of our pension in the event of a termination. But plenty of jokes in response to real questions.

you are willing to subject our retirement to an experiment that has a high Probability of failure. I was hoping the 25+% stock market correction in the spring would save us from the folly of a variable plan overly reliant on the stock market. It did for a bit, but easy money out of thin air has resurrected the market and this VB plan with a savings account on the side just won’t die.

please answer at least one of the questions posed in the previous pages and we can move the ball forward. Many of them are in bold so they should be easy to find. Otherwise your lack of answers will probably keep growing the numbers in favor of improving our current fund vice conducting an experiment on the economic livelihood and lifestyles of the remaining 25 years of our surviving spouses in retirement. That is who this will affect the most so we want answers and if you understand this plan as much as you say then you should provide them or show us where they are instead of telling us that it was covered somewhere. Just read the literature or duh is not sufficient to pacify our risk assessments. Dr K

 

It’s not that we are against anything new, most of us don’t want to be the first to adopt this new pension scheme. As I mentioned before, it’s incredibly complex. If you’ve been around here awhile, you know we get our asses handed to us on a regular basis by the company in regards to contract language. It’s just not that difficult to think we’d totally mess this up.

I listened to the latest podcast. See how long they spoke about other pension ideas and then see how long they raved about the pancake plan. They had a hard time finding a weakness in that plan, it was just misunderstood. They have been selling this concept for years and most of us still don’t want it (neither does the company).

Let’s just get real polling out and pick a direction. No vague questions. It’s a subject that we all care about and want to improve. If the majority want this plan, then let’s go that direction. If not, let’s move on.