2% pay raise in Oct 2020
09-04-2020 | 11:02 AM
#241
Gets Weekends Off
Joined: Nov 2005
Posts: 2,424
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From: 757 Capt
I thought people choose to Defer Upgrades to improve QOL, while realizing that impacts on career earnings?
09-04-2020 | 11:11 AM
#242
Line Holder
Joined: Jul 2008
Posts: 864
Likes: 50
From: B767
It’s hard to get your pancakes when you can’t get a seat at the table.
09-04-2020 | 11:17 AM
#243
Banned
Joined: Jun 2018
Posts: 1,838
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And they continue to talk circles around themselves just to trash "new ideas". All of the sudden they are Flat Dollar formula fans because hey, someone else has one so it must mean its good. Yet the other plan ALPA is looking into is garbage. I have to laugh at this long diatribe about what if the market does this or does that then the new A plan would tank. Well that's been addressed on the education material. What do they think our current A plan is invested in? Its funny because the modeling showed numerous market conditions and starting points modeled. They talked about how the new A plan would have give floor protections. Literally every negative point I have seen posted has been addressed in either the information that came out in 2017/2018 or the most recent stuff over the last month.
09-04-2020 | 11:18 AM
#244
Gets Weekends Off
Joined: Jul 2009
Posts: 1,224
Likes: 0
One result of this infantile fight and lack of real answers to important questions about risk and security is the postponement of other important discussions, such as the merits of changing the A plan to a purely productivity-based pension (VB/PSPP) versus one that is predominately based on longevity (current A plan).
For example, if a pilot takes the first upgrade and busts his behind or is awarded the 777 during indoc, it is possible to make high-5 type numbers (260k+) very quickly. Let's say in year 6, the pilot's spouse gets sick and the pilot spends 2 years taking care of her until she passes away and 3 years getting their kids back on their feet. During those 5 years the pilot drops or gives away most of his flying and does the minimum to stay current because that is what is best for him and his family. Now at year 11, the pilot has worked full schedules for 6 years and almost no schedule for 5 years. The results of this example are important and demonstrate one consequence of the new proposed pseudo-A plan.
In our current A plan, the pilot could go back to work when his family is ready and there will be absolutely no repercussions on the payout of his A plan at retirement and for the rest of his life. It is longevity-based for the most part, requiring only 5 years of heavy lifting. His B plan, which is purely productivity-based on flying credit hours, will suffer from those 5 years of very little paid at 9% by the company. The beauty of this diversified retirement system is that he will not suffer financially for his decision to take care of his family for the rest of his life and have to slave to make up for those 5 years.
In the proposed VB/PSPP plan where "every hour counts", the pilot will experience 5 years of almost buying 0 notional shares. Out of his 25 year career, this will result in only 20/25 years purchasing notional shares. Now, if I understand the VB/PSPP plan correctly, he will have ROUGHLY 80% of his pension due to those lost years, if the market has suffered and we are saved by a floor that somehow holds up to the court challenges, with give him .8 x 130 = 104k for his productivity-based A fund plus 80% of the B fund he could have earned if he had decided not to leave for those personal reasons.
This example demonstrates the pitfalls of 2 purely productivity-based systems. Having a traditional pension and a 401k style fund both supplied by one's employer is a golden setup, even more so after the current events taking place in our country and industry specifically. I know that if I work high 5 style for 5 years and then drop every other trip for the rest of my career (for the sake of argument), I can retire with a pension valued at several million dollars. There is no way I am giving that up for the promise of only breaking even while having lifetime consequences for dropping trips for any reason.
We haven't even scratched the surface of deferring our CURRENT pension for a few years to let it grow as though we were still working. That could yield payouts way more than 130k per year but is not talked about as a benefit of our current plan. I don't remember reading anything about deferment options with the VB/PSPP plan, are they available? My guess is not because "every hour counts" means not flying doesn't count. I could be wrong...
Couple all of these facts with the risk and regulatory issues that have yet to been addressed and the fake news about the prevalence of the plan in our country, and one can see why there are such important questions like cui bono and the absolute lack of trust in anything produced about the scheme. Please see past the extra $500/month or whatever it comes out to be a best and study all of the consequences if the plan goes right and all of the pitfalls if the plan goes wrong. Dr K.
For example, if a pilot takes the first upgrade and busts his behind or is awarded the 777 during indoc, it is possible to make high-5 type numbers (260k+) very quickly. Let's say in year 6, the pilot's spouse gets sick and the pilot spends 2 years taking care of her until she passes away and 3 years getting their kids back on their feet. During those 5 years the pilot drops or gives away most of his flying and does the minimum to stay current because that is what is best for him and his family. Now at year 11, the pilot has worked full schedules for 6 years and almost no schedule for 5 years. The results of this example are important and demonstrate one consequence of the new proposed pseudo-A plan.
In our current A plan, the pilot could go back to work when his family is ready and there will be absolutely no repercussions on the payout of his A plan at retirement and for the rest of his life. It is longevity-based for the most part, requiring only 5 years of heavy lifting. His B plan, which is purely productivity-based on flying credit hours, will suffer from those 5 years of very little paid at 9% by the company. The beauty of this diversified retirement system is that he will not suffer financially for his decision to take care of his family for the rest of his life and have to slave to make up for those 5 years.
In the proposed VB/PSPP plan where "every hour counts", the pilot will experience 5 years of almost buying 0 notional shares. Out of his 25 year career, this will result in only 20/25 years purchasing notional shares. Now, if I understand the VB/PSPP plan correctly, he will have ROUGHLY 80% of his pension due to those lost years, if the market has suffered and we are saved by a floor that somehow holds up to the court challenges, with give him .8 x 130 = 104k for his productivity-based A fund plus 80% of the B fund he could have earned if he had decided not to leave for those personal reasons.
This example demonstrates the pitfalls of 2 purely productivity-based systems. Having a traditional pension and a 401k style fund both supplied by one's employer is a golden setup, even more so after the current events taking place in our country and industry specifically. I know that if I work high 5 style for 5 years and then drop every other trip for the rest of my career (for the sake of argument), I can retire with a pension valued at several million dollars. There is no way I am giving that up for the promise of only breaking even while having lifetime consequences for dropping trips for any reason.
We haven't even scratched the surface of deferring our CURRENT pension for a few years to let it grow as though we were still working. That could yield payouts way more than 130k per year but is not talked about as a benefit of our current plan. I don't remember reading anything about deferment options with the VB/PSPP plan, are they available? My guess is not because "every hour counts" means not flying doesn't count. I could be wrong...
Couple all of these facts with the risk and regulatory issues that have yet to been addressed and the fake news about the prevalence of the plan in our country, and one can see why there are such important questions like cui bono and the absolute lack of trust in anything produced about the scheme. Please see past the extra $500/month or whatever it comes out to be a best and study all of the consequences if the plan goes right and all of the pitfalls if the plan goes wrong. Dr K.
09-04-2020 | 11:19 AM
#245
Gets Weekends Off
Joined: Nov 2005
Posts: 2,424
Likes: 0
From: 757 Capt
I think if anyone had said changing the Earnings Cap to $285k was a huge win and cost the company a ginormous amount of $$$, they'd have been laughed off of this forum.
So, Dr K. Let's assume that the PSPP was considered, adopted, and approved 5 years ago...with a delayed implementation-so first retirees hit the street in Dec 31st of 2018.
The nitty gritty that we know of the PSPP is that it requires an annual contribution into our newly split off Pilot Only Retirement Trust fund. Let's assume a 1% salary contribution for this example. Let's assume 200 pilots retire each year 2018-2020. Let's assume the stock market loses 30% each year.
Pilot payroll is in the 1.2B range, so that's a lot of zeros there 1,200,000,000
1% of that is $12,000,000
2018 the DC limit was $275,000
So at 200 per, that's $1,100,000 of pension payout (assuming a 2% floor)
So, at year end we wind up with $10,900,000 minus 30% is $7,630,000
Plus $12,000,000 gets us to $19,630,000
DC limit was $280,000 so that's $1,120,000.
Year 1 folks would draw $1,100,000
So that puts our Trust at $17,410,000 minus 30% = $12,187,000
Plus $12,000,000 gets us to $24,187,000
DC Limit this year is $285,000 so that's $1,140,00
Year 1 folks another $1,100,000
Year 2 folks another $1,200,000
That puts our Trust at $20,827,000 minus 30% = $14,578,000
Rinse and repeat.
Hopefully it's a no brainer that year after year after year after year of 30% losses is going to eventually cause some liquidity issues in our Pension.
But how likely is that?
Or better yet, how likely is FedEx to survive an economic implosion like that. Painful for me to imagine how deep the furloughs would actually go.
So, Dr K. Let's assume that the PSPP was considered, adopted, and approved 5 years ago...with a delayed implementation-so first retirees hit the street in Dec 31st of 2018.
The nitty gritty that we know of the PSPP is that it requires an annual contribution into our newly split off Pilot Only Retirement Trust fund. Let's assume a 1% salary contribution for this example. Let's assume 200 pilots retire each year 2018-2020. Let's assume the stock market loses 30% each year.
Pilot payroll is in the 1.2B range, so that's a lot of zeros there 1,200,000,000
1% of that is $12,000,000
2018 the DC limit was $275,000
So at 200 per, that's $1,100,000 of pension payout (assuming a 2% floor)
So, at year end we wind up with $10,900,000 minus 30% is $7,630,000
Plus $12,000,000 gets us to $19,630,000
DC limit was $280,000 so that's $1,120,000.
Year 1 folks would draw $1,100,000
So that puts our Trust at $17,410,000 minus 30% = $12,187,000
Plus $12,000,000 gets us to $24,187,000
DC Limit this year is $285,000 so that's $1,140,00
Year 1 folks another $1,100,000
Year 2 folks another $1,200,000
That puts our Trust at $20,827,000 minus 30% = $14,578,000
Rinse and repeat.
Hopefully it's a no brainer that year after year after year after year of 30% losses is going to eventually cause some liquidity issues in our Pension.
But how likely is that?
Or better yet, how likely is FedEx to survive an economic implosion like that. Painful for me to imagine how deep the furloughs would actually go.
09-04-2020 | 11:22 AM
#246
Banned
Joined: Jun 2018
Posts: 1,838
Likes: 0
I’m pretty sure you know I was referring to the most restrictive seat movement language in the industry. It’s not the people who are choosing to stay senior in a lesser paying seat, good for them as they fully understand the implications, my issue is the inability to advance to a high paying position due to our restrictive language.
It’s hard to get your pancakes when you can’t get a seat at the table.
It’s hard to get your pancakes when you can’t get a seat at the table.
09-04-2020 | 11:28 AM
#247
Line Holder
Joined: Jul 2008
Posts: 864
Likes: 50
From: B767
We have bids every 1-1.5 years. Because they are so big means quicker movement in a lot of cases just do to the scale of the bid. I don't think this stifles peoples career movement like you insinuate. Just because companies have bids every 3 months doesn't mean they will have vacancies. Having more bids doesn't directly correlate to faster movement.
Very few of our pilots understand how Sec 24 works until a “gotcha” has an impact on their QOL or earnings potential.
09-04-2020 | 11:43 AM
#248
Line Holder
Joined: Mar 2018
Posts: 95
Likes: 0
kronan there is a large difference between having money in the fund and being fully funded per actuarial liabilities. this scheme does not do that at all, as a matter of fact the benefit of variable plans is that they do not have to fund based on actuarial science because the employer has no risk and the employee takes on all the risk. there is no guaranteed payout to meet. your example shows that the fund does in fact have money in it, but will never meet the actuarially derived funding requirements of the present value of future retiree liabilities. that is why variable funds never pay variable pbgc premiums, because they are never underfunded because they have no definite future liabilities. the savings account stabilization fund does nothing to change that. it's like we are trying to have our cake of a fully funded traditional pension fund with only the crumbs required to fund a variable plan. we cannot have both. if the plan ever terminated we would get pennies when the pbgc took over your example versus the 65k i believe we would get now. but i do thank you for taking the time to put an example forward and being constructive. what do you think about about this argument?
also do you care to answer my example above and concerns about taking 5 years of work off due to family issues and earning 0 notional shares for five years and its effect on your retirement? Thank you. Dr K
also do you care to answer my example above and concerns about taking 5 years of work off due to family issues and earning 0 notional shares for five years and its effect on your retirement? Thank you. Dr K
09-04-2020 | 12:35 PM
#249
Gets Weekends Off
Joined: Sep 2007
Posts: 1,506
Likes: 0
From: 777 Captain in Training
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”.
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”.
Ok if we cannot or do not have the collective will to get the company to raise the Cap on our current pension? What on earth makes you think we can hold out for good negotiated funding rates for good hurdle or floor rates with the same company that will not raise or current cap? This is like the comedy of our elected officials “we have to vote for it, to know what’s in it” statement. Remember all the actual numbers etc will have to negotiated with the company after we the crew force have voted for it!!
I talked to a MEC officer and I too personally think they are all in on the VB plan and I will bet we will never see a simple survey question such as “are you in favor of the VB plan”. It will be like age the 60 survey and similar to if we cannot raise the Cap are you in favor of other options to improve retirement. Which we are but probably most are not in favor of the VB plan being that solution.
This contract is going to be very interesting and I think we have been bit too many times with secretly agreed to interpreted language or side deals. We need to demand that all language and any agreed to implementations have to be fully disclosed to us before the vote. Remember the first class, lay down seat change implementation was supposed in the notes and we were covered! We see how that played out.
I support the union buy they work for us not us for them.
09-04-2020 | 03:34 PM
#250
Gets Weekends Off
Joined: Jan 2016
Posts: 195
Likes: 0
From: B767 FO
And they continue to talk circles around themselves just to trash "new ideas". All of the sudden they are Flat Dollar formula fans because hey, someone else has one so it must mean its good. Yet the other plan ALPA is looking into is garbage. I have to laugh at this long diatribe about what if the market does this or does that then the new A plan would tank. Well that's been addressed on the education material. What do they think our current A plan is invested in? Its funny because the modeling showed numerous market conditions and starting points modeled. They talked about how the new A plan would have give floor protections. Literally every negative point I have seen posted has been addressed in either the information that came out in 2017/2018 or the most recent stuff over the last month.
Yes the A Plan invests in the stock market. But if it underperforms, Fedex is on the hook to add more money. (That’s one reason they don’t like it...they can’t forecast that performance and cost.) The PSPP would be a pyramid scheme where those shortages are taken directly from our fund in the idea that there’s time to make it up. IF they can get Fedex to guarantee the floor that would be different, but Fedex isn’t going to do that because that wouldn’t improve their position either and they wouldn’t even have control of where the fund is invested.
The biggest downfall with the VBP/PSPP is that it WILL erode our future negotiating power. You yourself already have been on here complaining about guys flying draft (even while we’re not in negotiations?). What do you think they’re gonna do when their forecasted retirement is tied directly to every single dollar they earn? We already know 51% of every pilot force at every company already votes based on “Pay in the pocket”. In our case it was 54. What do you think is gonna happen in future contract negotiations when Fedex is willing to drag their feet for years. When the Union leadership hard sells this is as good as we think it’s gonna get or it might take a protracted amount of time. Not only will pilots want the raises (which I’m not against in general, but certainly don’t want them to override all QoL issues), but when they find out their retirement projections will go down the drain (because a catch up does nothing for compounding gains/interest in the market) as well. We’ll find 51% flying draft during negotiations to protect that retirement forecast and voting for the first contract offer that meets the raises they need for that forecast. We’ll have PBS on property in no time and be playing right into the company’s hands!
Increase the A Plan (at least fight hard for it!) and increase the B with cash over cap. The B plan is your cola/inflation protection. The A plan is a fixed income to cover fixed costs. The best of both worlds. We’re one of the last few to have it and you’re so anxious to “try something new” you can’t see the forest for the trees!
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