Check annuity calculators and quicken.

To have the same payout as the max A fund requires a net present value of over $2M. Can you save & invest that well?

A 35 year old pilot would have to contribute an average of $43000 annually thru age 65 to reach the sum that would enable him to have an annual payout equivalent to the A fund cap. (max qualified pensionable earnings now $265 & 25 yos- Doesn't matter if your FAE is $3XX the cap is $265k now. the retirement office stated that the IRS has historically raised the cap about $5k every 3 years- ). This $43k annual contribution assumes earning 6% ROI each and every year, 2% inflation. The pilot assumes ALL risk factors, market, portfolio, systemic, inflation etc. So a bear market just prior to retirement could be devastating, a conservative portfolio would limit the necessary ROI- The Schwab financial planner that ALPA is coordinating with used 5.2% ROI for my plan, and I'm pretty heavy in equities.

To accumulate this necessary sum would require a B fund of ~22%. However the IRS caps limit how much the company can contribute- so once he is a wide body capt he will reach the IRS limit before the end of the year, so even if he did have a contractual 22% B fund he would not be able to get the full amount into his tax sheltered 401-Bfund (unless he had cash over cap- but then it would be taxable and still couldn't go in the 401k anyway- an post tax ira possibly).

IMHO, there is no realistic way that we can replace the value of our contractual DB plan by a DC plan. The $$ required+ IRS caps/restrictions + all risk is on the pilot.

There are only two ways the DB A fund can go away. 1) Distress termination approved by a Federal judge and the PBGC iaw Federal ERISA laws in a bankruptcy court. 2) we give it away in contractual collective bargaining negotiations. The federal ERISA laws mandate contribution levels based on the number of annuitants, actuarial factors and more. The company cannot just take it, nor arbitrarily decide not to fund it. Additionally executive management's DB plan is with ours, so they have a collective interest in resourcing it and staying in compliance with the fiduciary responsibilities.

There is a valid point that the IRS caps limit the future DB payouts value wrt inflation. But as long as the IRS continues with increasing the max pensionable earnings cap $5k every 3 years (~2-3%) that will provide some downside protection. (i.e. $265k in 2016, 270 in 2019...)

The math is nice but really all you need to ask yourself is: Would the company prefer to drop the A-plan and go with an increased B-plan?
You then have your answer of what is best for the employee.

+1,000,000

Therefore, if they tried to freeze and get rid of it, and we fought that off successfully, that would be a.......

.... a miserable failure.

Not increasing our A fund by either an improved multiplier or FAE number was a complete fail. This was quite possibly the best opportunity we will ever have to improve this area. Hundreds of pilots short. Peak. And we are patting ourselves on the back for keeping a 1998 benefit.

That, again, is why we fail. It's basic negotiations. They will alway "come after" what we really think is important. This time it was retirement and PBS. Next time they'll probably go for vacation. They know their chances of getting concessions in these areas are next to impossible, but people like you will think we scored by just keeping them..

It would be fun to watching you purchase a car....

Sure the company would prefer a B fund. It's very difficult to forecast costs in regards to the AFund. I doubt they are concerned so much about those of us on property, but what about the next generation? It's not impossible to believe that our life expectancy will greatly improve over the next 30-50 years. Actuarial tables do a pretty decent forecast, but it's hard to go that far in the future. And you'll need to when you hire a thirty year old tomorrow. Will he live to 80 or 100?

Some people think the best way to effectively kill off Social Security is by eliminating cost of living adjustments. We just did that to ourselves. 130k today is a pretty decent amount of money. What will it be worth in 35 years when the 30 year old retires (the retirement age will probably go away by then)?

There was a time when we thought companies like GM would always rule the world. I doubt people thought they'd lose pensions years ago. A funds are great if they are there when you retire. Renewing money is a great thing. Ask all the people that are receiving checks from the PBGC which plan was best for them? You'd get differing responses, but if you were getting 130k in retirement, and now getting 30k, you may have opted for the B fund. B funds can swing wildly with the stock market depending on your investment choices. You can assume a nominal rate of return, but it's really just that, an assumption.

I'm looking at retiring in about 10 years, so my outlook isn't as long term. But if planned retirement date was 2050, I have to say I'd take the cash. You'll only know which choice was best when you die.

Aaaaand you let me know when Delta gets another TA. They got the company right where they want em!

Big deal. They wait a year or two. We waited a long time here for this POS. With our pilot shortage, I think it wouldn't have been too long. Of course we'll never know. It's not like we would be on strike now, we'd just work under our current contract...

Meanwhile, Delta pilots are cashing their profit sharing checks. Ones that were going to be greatly diminished with their new contract. So were they idiots for voting it down?

So, if Delta pilots voted a TA down which diminished their profit sharing, and in the next TA they get to keep the profit sharing they have now, they've lost, right?

Do you want to bet if Delta pilots' profit sharing formula gets better, gets worse, or stays the same in the next TA presented to the membership?

Ok, let's put it this way. They had a TA, they turned it down. If they would have approved said TA, their profit sharing would be less.

I never said every part of our contract had to be improved. Much of it wasn't. We still get 6 hours of sick leave per month. We still get the same vacation days. I could go on and on with this, but much of our contract is exactly the same. We definitely lost by capitulating on retirement.

I'll bet you this. Their pay will go up significantly. I can't tell you about every piece of their contract including profit sharing.

Hopefully, we'll all live a long time. Hopefully, we'll collect many years of retirement. We left a very significant part of our contract virtually untouched. Again, the B fund increase will net me 40k over the next 10 years, assuming I hit 265k every year. Bumping FAE up to 320k would add 30k/year assuming I could average 320k. Think I'd take the A fund improvement.

I read the lawsuit from the guys suing ALPA. I'm not going to remotely consider suing our own organization, but they do make some very good points.