Tony; My point was that under the DB plan you and your spouse (if you take the survivor option) could collect only a small portion of the true value of the plan if you were to both pass away shortly after starting retirement. There is nothing left for your estate. I do agree that for now the best of all worlds is an A Fund with a B Fund and the 401(K) plan. It covers all of the bases.

I think Tony's point was what does the spouse need money for after you are gone.

If my spouse and I die shortly after beginning retirement, I doubt I'll be concerned about unused retirement benefits. We'll be dead. We'll no longer have any use for retirement benefits.

If your goal is to leave a big estate, you should plan to die the day after you retire. Also, instead of taking vacations and enjoying hobbies, put every dime you earn in investment vehicles.


Me, I'd prefer to enjoy my life as much as possible, now and many, many years into retirement. My retirement funds are for me and my spouse. My kids can take care of themselves. They received the gift of independence.






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I'm not THAT cold!

I'll take care of her, but the kids are on their own.






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[QUOTE=PurpleToolBox;1822540]Have you looked at this on a spreadsheet? Does ALPA have one?

I played with some numbers, assuming a FO for ten years, maxed out his retirement, average salary of 130,000. Then a CA for 15 years, average salary of 260,000, maxes out his contribution, but no catch up. I came up with $2,445,000 assuming 8% return. There are mutual funds with long term records who meet or exceed that. Sure it goes up and down. That's why you need to be diversified. I don't know what $2.4M gets you after taxes though. I'm not that smart. If you took 6% of that $2.4M a year out, that's roughly $140,000 a year. That's not too bad in retirement.

I get $3.5M if you go to the 16.5% B-fund.

Public Math Warning ... I'm an engineer by trade, not a financial professional or mathematician.[/QU

Our own ALPA reps did a quantitative analysis, and qualitative summary. It was given to the block & MEC reps after the vote to consider a bigger B fund was narrowly defeated. One of the best publications on the topic I've ever seen.

That being said, there were two flaws, one was seat progression (too optimistic -mid 2000's hires won't see NB CAP until year 12-13, WB CAP 17-18 & that's best case at 100%), and another was the average annual rate of return too optimistic. Sure there are a few mutual funds that might have come close to 8% for a while, but what was their asset allocation? Will you be fully vested in equities up to retirement day? Most retirement managers see average portfolios of 4-6%

The company would have to offer a B fund in excess of 25% to approximate the A fund. Google immediate annuity. Click on any of the sites. Plug in what annual income stream you want/expect to have. Click enter. based on your age, you will see a number between $1.7-$2M+. Do you have that in your b fund? What if you're 4 years out from retirement & there is a bear market- say like 2008/2009. If you lose 50% you now need 100% return to be back even- ready to risk that at -3 years? If you diversify assets prudently, you're not going to achieve those "aggressive " rates of return.

We are protected by ERISA law and collective bargaining agreements, the company can't just "decide" to terminate the pensions. They can petition a BK judge for a distress termination only if they meet certain funding criterion. As long as the company remains profitable and out of BK, the only way for the DB plan to go away is if ALPA consensually "gives" it away in negotiations. IMHO, "giving" away the DB, is about as bad as the concessionary PBS proposal.

The company has recently bought back $5B in stock and continues to consistently raise the dividend, revenue and profits are UP! They can afford it. A rising tide does NOT lift all boats, and their attitude reminds me of snake oil salesmans' economic fallacy of trickle down economics.

[QUOTE=olly;1824038]Nicely said +1

The A Plan is part of my diversification strategy. I don't want everything in equities or other risk based assets

That was my interpretation of the Union article as well. I particularly loved the old adage "How do you get a pilot to make a million $ in the market..start him with 2 million"

"Device availability is also driving our new hire process. We will recommence hiring based on the availability of training slots. As we have done historically, we will hire from our successful internal applicant pool and then from our external pool. We do not require any pilot, including new hires, to bid or accept an FDA position."

Translation: No new hires because Feds wont let us send them to HKG, but it was our idea, yeah that's the ticket.

Was at the schoolhouse this week and was told that many of the flex guys are working "overtime" (read draft) to keep up with demand. I'm not in that group and I personally haven't met a flex that wasn't a good egg so I don't want to spread a bad rumor if not warranted.

Seems like that very powerful cadre of folks could really let their displeasures be known about our mediation situation should they unify and move in a common direction. Hopefully the rumor isn't true....which I would tend to believe if I wasn't told of this by a flex himself.

Don't look for any help from the flexes. They will do whatever is best for them to keep their "preferred" status. In other words, they will crawl over each other for any draft that is available. In the past, it has been the FO's on the Airbus and 11 that have gotten the deal done. It would be great if the school house slowed to a snail's pace due to lack of available instructors, but don't count on it.

Don't paint all the flexes with the bad broad brush.

Had training late last year, in my grace month. Skeds was scrambling to fill it, finally found a guy. In the brief I asked him how he got the sim, he said it was one of his R days. He asked who we had tomorrow, clucked, checked the schedule then said "Yeah, he is on draft. Not helping anyone."

My memory on dates and names is of course fuzzy, but I remember the gist of it.

It might mean something like people sucking up draft are hurting our contract negotiations.

I could be wrong, though. Everyone is free to come to their own conclusion.