For right now, FedEx's Retirement is still better than UPS, IMO. Especially if you're going to be a career FO.
Pension Values, FedEx, UPS Captain, UPS FO. Using 2023 FDA values of $4,400 and $3,520

20 years. $104k\$88k\$70.4k
23 years. $119.6k\$101.2k\$80.96k
25 years. $130k\$110k\$88k
28 years. $130k\$127.6k\$98.56k
30 years. $130k\$132k\$105.6k

The additional B fund contribution doesn't make as big of a difference as people assume, since we are both Capped at the same income level. But it is the Volume of earnings that drives the end value of our B plans, and, IMO, the opportunity to upgrade to Captain occurs earlier at FedEx than UPS. Haven't checked recently, but last year there were almost as many Captains at FedEx as there were pilots at UPS. And there are a LOT of "young" FO's on the 777 earning International Pay as well as the extra BKO.

One thing that FedEx has is the ability for excess sick leave to be contributed to our "B" plan. (It's part of our Defined Contribution pot of money, not truly the B plan. And it's Cash over Cap so those who max out Aft Tax Contributions receive it as taxable income).
Not sure if UPS has that, or how UPS treats unused Sick Leave.
Nor do I know if UPS allows Aft-Tax contributions into their 401k, which allows the Mega Backdoor Roth.
Nor do I know if UPS has an Advance Notice of Planned Retirement bonus, for those lucky enough to be healthy (rumor is that's roughly 60% of us)...it's a big, big chunk of money.
Nor do I know if UPS allows a Retired Pilot to Defer collecting their FDA calculated pension for a year to bump up the value. (For FedEx, deferring 1 year roughly changes your $130k pension into a $143k pension)

 

This is not a retirement benefit. I get paid the same 72 hours if I use my sick - you just flew and extra 72 hours at straight time to get that check at the end of the year. Stop promoting this fort something it is not.

 

Agree’d. I’d like to see the percentage of pilots who end up with a full bank every year. One medical event and that extra bump to your retirement is gone. So I definitely wouldn’t include it as a retirement tool.

 

UPS guy contributing to a FDX thread here, hope that one FDX guy can forgive me...

I would agree that FDX currently provides a better defined benefit for pilots with <30 years of service and PFOs. I would submit UPS provides a better defined contribution. I would also submit that with the value of combined DB and DC plans, pilots both places are doing pretty darn well and shouldn't need to wear an apron at Home Depot.

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The 3% difference in direct contributions has a value of $9150 at the 2022 401(a)(17) compensation limit of $305k.

At UPS, 71.5hr of sick time is accumulated annually. All sick leave accrued over the cap (which was 208hr last year and will be 218hr this year) is paid out at the crewmember's current hourly rate. Crewmembers can elect to be paid down to 148hr sick any year. Sick check can be contributed into 401k. 100% of remaining sick leave is paid upon retirement.

After-tax MPP contributions can be made up to the 415(c) limit. For 2022, a $36.6k DC (at the $305k compensation limit) and $20.5k max 401k contribution leaves $3900 in maximum after-tax contribution.

I am not sure if the defined benefit pension can be deferred and a crewmember receive an actuarily adjusted higher benefit.

 

If you are looking at the pensions by themselves, it could be said that the UPS version is better only for those who can and choose to work for 30 years. And the FedEx is better for career FOs. But until you show the math that includes the B fund, it’s hard to see which overall package is better. If you have that math, please show it. It would be interesting to see.

Also, business models should not be used in comparing retirement. We can negotiate improvements to the retirement. But we have zero say in fleet and will never have a say in that. The business models of both companies can change just as easily as a change to a new CEO with a “new” idea,. These types of business models assumptions should never be used to justify what we have or don’t have in our contract.

 

I like this.

 

Yes, that is a huge benefit. To actually be paid your sick leave at full pay, instead of half pay at retirement. Honestly, I have no idea why anyone at FedEx would even want to bring a single minute of sick time into retirement, at 50% on the dollar.

 

Anyone care to expand on the Advance Notice of Planned Retirement bonus? How does that work?

And career F/Os are mentioned. Are there a considerable amount at Fedex? And are you saying they still get the same pension as a captain?

 

I'm not too well versed on the Advance Notice thing, since I still have a bit to go, but I'm sure someone will be along with more specifics. Basically if you tell FedEx early enough (12 months?) that you're going to retire, there's a sizeable chunk of money that comes your way. It was all for planning. You could conceivably tell FedEx you're retiring last minute and just do it, with no notice. FedEx didn't like that for planning purposes, so they incentivized early notification.

I don't know how many career FOs we have, but they do exist, for many reasons. Yes, FOs and Captains earn the same retirement, as long as they both have made over $260,000 for 5 years during their career (and have the same years-of-service). The formula is 2% * YOS (25 max) * "High 5 earnings" ($260,000 max). So a Captain or FO with 25 years of service and H5 of 260k = $130,000/year.

 

My perception of FedEx vs UPS retirement is that FedEx retirement is more favorable for those who are hired later in life (retired mil, etc) due to the shorter timeframe required to max out the pension and less time for the time value of money to leverage UPS’ larger B plan. While UPS retirement is a better deal for the guy who is hired younger who will be able to get the slightly larger UPS max pension while also taking advantage of the better B plan. FedEx’s Advanced Notice of Retirement benefit is significant, but only really matches what a UPS pilot selling back their sick pay at retirement gets. UPS pilots can sell back sick bank over 148 hours or 218 (pilot choice) each year and contribute it to either their traditional or Roth 401k. We do not have the ability to do the Mega Backdoor Roth.

My conclusion, while both plans are better than pax peers, neither have kept up with inflationary pressures and we both need to make some big gains on the next round of contract negotiations. Both pilot groups are able to comfortably max out their B plans and 401ks, the only sizable tax advantaged retirement gains will have to come from increased pension benefits.