Noworkallplay

They used the fund performance numbers from our current DC plan not stock market returns. Like Tuck said, very conservative numbers. Our current DB plan had a 12% earnings last year. This was in the mailer we all received at the end of the year. FedEx corp thanks you for funding your own pension stagnation.

Noworkallplay

I just found the mailer and the information is also in the 10K 2020 report. The current pension plan has an expected return rate of %6.75. In 2020 the plan made 15%. That is after all fees are taken out!!!

Once again you got nothing for the fund performing well. FedEx corp thanks you for funding your own liabilities.

Another interesting data point is that the pension, post retirement healthcare and benefits liabilities reduced from 5.01 Billion to 4.77 billion.

So those who say that 6.75 is way to high to expect for fund performance are not well educated. So yes the variable plan would work very well if the hurdle and floor rates got set correctly. Numbers and historical data don't lie.

Over the last 15 years the fund has made an average of over 8%. Let that sink in. So in this period of time you would have increased your pension substantially in the variable plan.

opt0712

There's already MDs that don't go sometimes daily because of a lack of crews.

kronan

They used the actual stock market returns for a balanced fund from 1999-2016 (don't quote me on the 2016 though, could've been through 2015)

Think the actual long term performance of our Pension Investment trust is at 6.5%-7% right now, and is predicted to be about 6% going into the future. (As Tuck noted, the actual performance of our Investment Trust is why FedEx has been able to forgo making ANY contributions into our Pension Trust over the past few years, and why they can often skip years)
The returns over the past year will likely be eye-opening to those who fear the market. I'm quite confident that our Pension Trust managers didn't go all cash last March, and more than likely transitioned a bit heavier into stocks. But that report will be off in the future.


Now, shifting to another comment.
The PBGC and "insuring" our Pension. 1st-"We" as the employees don't get to choose which Pension is insured. The insurance will only kick in if FedEx is failing and approaches a bankruptcy court with a request to Terminate the pension. A Bankruptcy court has to agree that suspending Pension Trust contributions is required for FedEx to survive as a company, and even then, the PBGC gets involved a little with the math as well.

Then, the Pension Assets for that specific Pension get turned over to the PBGC and the PBGC then makes Pension payments to us based upon the Maximum Value the Govt sets, and that's dependent upon age.

SInce TonyC is so adamant that we shouldn't modify any Pension Plan to promote continuing to work past the normal Retirement age of 60.
At 60 the PBGC Pension would be $47.1k (no survivor benefits, Joint life is about $4.8k less)
Defer collecting your Pension for a year and the PBGC max benefit rises to $52.1k

(retire early at 55 and your PBGC is $32.6k)

kronan

Bottom Seniority number is 5329, certainly doesn't reflect retirees and definitely doesn't reflect future hires (an extra class was added for May)

So, $8,3333.33 times 5329 is $44,408,315.57 times 12 which is $532,899,786.84

Of course, that's not how a Pension Trust works, but even if it was a year by year thing...FedEx could afford it. After all, 2021 3rd quarter Express segment earnings were $514M (non-GAAP)

PeterGriffin

...which is why they can easily raise the FAE!! Don’t be scared to negotiate with the company!!

USMCFDX

This is not a true statement, although they have been making large payments that they were not required, performance of the fund is not the reason they were not required to contribute.

kronan

Interesting,
FedEx has made Voluntary Contributions to our Pension Trust...umm, doesn't Voluntary mean not a required Contribution. And by a Required Contribution, isn't that a Contribution required by EIRSA to insure that our Pension Trust has the assets to meet all Pension obligations?

But if FedEx doesn't HAVE to make contributions, isn't that in part a result of the Performance of the Investments held in Trust.

So, if Performance of the Trust has absolutely no bearing, please elaborate why FedEx hasn't been required to contribute funds to our Pension trust for such a long, long time.

kronan

I'm not scared (I'm going on a bear hunt) :-)

They could've easily raised the FAE for TA2015 as well.
Might be astonishing to some, but 777 Capt's back then were making a lot of coin too. Typical BLG for a 4 week month was in the mid 80s (not counting the hidden BKO) and a 5 week month was in the 110 range.
And restoring that International WB Capt Pension replacement value was the #1 thing our then MEC Chairman talked about. (Have to kind of wonder if he decided to return to the line due to the intransigence of the company to even budge, at all, on FAE then)

I think a PSPP style plan is more likely to be achieved than a significant FAE improvement.
And that's what I've said in the web survey as well as communications with my reps.

If the majority of my peers are an FAE or nothing, well, I can quite happily live on my current pay for as long as it takes to achieve that goal.

For me, my preference is a substantial improvement to the B plan (Cash over Cap or bust and hopefully up to 12% to match Oooops) and the modest A plan improvement ala PSPP (FAE up to 300k is a value on par with a transition to a PSPP benefit formula)

Noworkallplay

Agree Kronan. Last quarter the corporation made another 500 million contribution to the plan. Not because they had to but because they needed a place to put money. Its all on the 10K.