Originally Posted by JustInFacts (Post 3961525)

So, the majority of the MEC votes to go a certain direction and they are dividing the union? In March 2024, 8 of the 15 reps at the time voted to ask the NMB for release. Were you on here talking about how they divided our union, I don't think so. So, just because you disagree with the majority, the majority are bad.

You keep saying that we had leverage going into peak while under 4a2bc. You said flights were getting canceled. So, why would the exit from 4a2bc change that. In November, the minimum line BLG was 76 hours, now it is 85 hours. There was plenty of room to add hours to the BLG and it wouldn't have counted toward an exit from 4a2bc. The same would go for December.

Go to the Delta thread and look at how they are having to fight to get the pay they think they are owed. Look at how their positive space commuting grievance turned out. So, tell us again how we were going to bring the company to their knees.

How many guys do you fly with that were hired after 2015 that are hard set about keeping the pension? I don't fly with many. I like the pension, but if the majority want to give it up for a 18% or more DC plan with cash over cap or some other vehicle, then so be it. I'm sure if that happened and we got Delta rates plus you would have some conspiracy theory about how the company was really cheating us.

JG and the TC8 have cost us 14 of the last 19 months of being on ice. In direct negotiations with the company, all that JG accomplished was getting some actuaries together to talk about costing formula's. So, we are 27 months from the failed TA and JG can't even agree on how to cost his proposals?

What about that direct line to the NMB that JG had that would allow us to restart negotiations quickly, as soon as he presented a new plan. Was that a lie, or did he not come up with a new plan. Trying to push us to an impasse isn't a plan. It's more like the toddler throwing a tantrum in the grocery store because they want a cookie. The toddler 5 are going to keep us in time out.

Originally Posted by KC10 FATboy (Post 3966882)

The problem is you and those FOs haven't done the math to determine what the company's contribution, ABOVE OUR ALREADY EARNED 9% CONTRIBUTION, needs to be to create a $130,000 return after 25 years. It's basic actuarial math. Anything near 18% is WAY TOO LOW !!! So yes, if we did that, I'm going to shout from the roof tops the company is cheating us!

Originally Posted by max8222 (Post 3966931)

I actually agree with KC on this! Been saying this all along that taking Delta’s 18% and C over C is a big give away. If we didn’t already have 9% bfund then just trading the A Plan for Delta’s plan would be close.

Originally Posted by NuGuy (Post 3966951)

It's not hard to model the costing of a very generic DB plan, but there are a bunch of variables to consider. In the current market, with relatively high interest rates (relative to recent history, that is), you can take a baseline of a 45 YO pilot lifetime payout at 65 of $12,000/mo ($144k/yr) w/survivorship benefits to spouse (about the same age) is about $850k, plus or minus.

If you want to pump it up to $15,000/mo ($180k/yr), you're looking at a current value of $1.1 million.

As the pilot gets older, the cost increases.
Increase the payout, the cost increases.
Lower the interest rates, and the cost increases...a lot (not linear).

If you are starting from scratch, you'd have a whole range of demographics to blend out the cost, but the number gets big in a hurry. IF you are going to replace the DB, ideally you want that money back on a rough equivalent of what the current dollar value of the plan would be. For a 30 YO, that'd be about $400k. For a 64 YO, that's $2.2 million.

There are a colossal number of variables to consider, but understand just dropping the DB would involve a ton of complicated costing, and if you want an equivalent benefit, some people are going to get giant checks, and others not so much, and sometimes that's tough to explain despite the math.

Originally Posted by KC10 FATboy (Post 3967328)

Under ERISA law and IRS rules, in a standard termination of a 100% funded defined benefit pension plan (like ours), every participant receives 100% of their accrued benefit, with no reductions.The plan’s assets cannot be used for company costs like general operations, salaries, or debt repayment. Pension assets are held in trust exclusively for participants’ benefits, and diversion for non-benefit purposes is prohibited by ERISA. The union can’t negotiate away the money, the company can’t take it

Assuming a pilot starts at $200,000 a year and gets a 3% pay raise every year, the company must contribute a minimum 20.1% of the pilot’s final-year salary (approximately $84,300 annually, escalating with salary, to the 401k for 25 years at 7% return to provide $130,000/year in retirement using the safe 4% rule withdrawal rate.

That exceeds the current IRS 415c overall annual addition limit of $70,000 per year.

We already receive 9%. To replace the defined pension and receive our already earned 9%, a new hire who can work 25 years would need minimum 29% with cash over the 415c cap.

Warning public math. Public retirement calculators used.

Originally Posted by JustInFacts (Post 3967437)

Your required contribution of $84,300 a year for 25 years at 7% return would net over $5,000,000, so well more than would be required using the 4% rule. You also fail to account for longevity and upgrades with your $200,000 salary increasing by 3% a year for life. For example, a 9 year FO made about 200/hour in 2018 and the next year as a 10 year WB FO, made $214/hour, or almost 7% more.

All of this, however, means nothing because pensions don’t work on an individual basis but on a large group basis. Pooled money and averaging of life spans allows it to be funded less than the highest benefit received. Why do you think that FedEx hasn’t been required to make a pension contribution since before 2020 despite hiring hundreds of pilots during that time frame? For example, if our pension fund has $25B in funds and earns your 7%, that would equate to $1.75B in yearly interest alone. Paying out $130,000 per retired pilot max, that interest would pay the retirement for over 13,400 pilots in a year without touching the principle. Economy of scales matter.

I hope this encourages you to take another look at math. The closest thing to financially comparing the cost of our retirement would be to look at the cost of a lifetime annuity purchased on the day you retire. Even that would cost more than what the cost to the company would have to fund for our retirement because the sellers of those annuities want to make money as well. Right now, that cost is around $2M plus or minus. So that would require less than $35000 a year at your 7% return for 25 years. Less if you stay longer.

Originally Posted by JustInFacts (Post 3967437)

For example, if our pension fund has $25B in funds and earns your 7%, that would equate to $1.75B in yearly interest alone. Paying out $130,000 per retired pilot max, that interest would pay the retirement for over 13,400 pilots in a year without touching the principle. Economy of scales matter.

Originally Posted by Maddog64 (Post 3967471)

For all those of you who say sunsetting the pension will save the company a ton of money, this is why you are wrong.