kronan

UPS has a 12% B plan.
UPS A plan has two components, receive the highest of the 2. It's a flat rate times years of service, or a 1% pension. For Capt's-in 2021 the flat rate is 4200, FOs is around 3400 (don't quote me on that one, not bouncing over to check)

So a 30 Year Capt winds up with a 126k pension + the greater B plan (Age 35 hire, retire at 65)
A 25 year Capt winds up with a 105k Pension + a larger B plan than the FedEx pilot.
30 yr FO is 102'sh k pension, 25 is an 85k pension.

UPS B plan is also capped at the IRS limits. For Capt's-UPS guys get about 10k extra into the B plan, about 7.5k when our's bumps up.

Ballpark, a 30yr UPS Capt winds up with just slightly less cash flow than the comparative FedEx guy. But the value of the UPS guy's B plan will be greater. In another post somewhere, saw the greater value as approx 866k for a 25 year Capt--assumptions were Capt year 1 (to maximize the B plan differential I assume) and 6.5% return. (Used a web calc w/interest compounded monthly)

Nightflyer

"It should not be complicated?"

It should not be complicated to be paid for the amount of unused sick leave left in your bank at retirement!

The formula should be simple. Sick leave hours left times your pay rate at retirement.

But instead we've got this rube goldberg formula that is so complicated you need to be a tax attorney and attend a seminar twice to understand what you will get. On top of that, the old "I've got mine" guys, including some of the same "I've got mine" guys that got the $25,000 VEBA payment from 2006, get the biggest share, the younger guys get less, and if you are under 54 at the time of signing, you get screwed.

So, the precedent is set to screw part of the crew force, and the company will do everything it can to make it as complicated as possible, so that people really won't understand exactly how they are being screwed.

"Any change in retirement should be easy to quantify."

B-fund, let's talk about that for a moment.

What good is a B-fund increase, that doesn't include cash over cap? How could our NC have been so stupid as to agree to a B fund that does not include cash over cap? How could they sell that crap to the crew force with a straight face? The more the screw job of this contract sinks in, the more furious I am with our NC and the MEC that voted to send this to the crew force.

When the retirement committee has to send out a missive warning us that if we save over 5% in the OSP we are going to screw ourselves out of B-fund money, the retirement is too dang complicated!!!

So...

I've been trying to figure out how to compute how close I am to the $53,500 plus $6000 limit. Some things are on my pay stub, but can anyone tell me where I can find the cumulative B-fund money to date that I have received? Can anyone from the union, or the company tell me how to make sure I don't screw myself out of B-fund money? Oh, I know the company would love to see me screw myself out of my b-fund, but I expect "my" union to demand that the company provide a "B-fund amount to date" column on my pay stub.

The company will make any changes as complicated as possible. You can count on it. Past history is proof.

Overnitefr8

I believe the plan is to come up with 2, 3 or maybe 4 options. Allow each pilot to chose which option would be best for himself. Obviously a person just about to retire would want something different than the person who just got hired and has a long time to plan. People in the middle would probably have the hardest choice to make.

busdriver12

I think that certainly would be the best of all possibilities. Trying to pigeonhole everyone into the same category would certainly make some winners and some losers, and who wants that?

I think it is very complicated if one is trying to figure out every possible scenario, for every single person. But it doesn't seem that difficult for one to look at the options (when they're offered), and figure out if it's beneficial for their situation or not.

I believe that for many people, an increased B fund (particularly with cash over cap), would be optimal. But you'd have to have a heck of a lot of years left, and it would have to be a huge increase, to trade your entire A fund for it.

busdriver12

How can you screw yourself out of B-fund money? I've never had money from my LTD bank go into my retirement account, so I've never been close enough to worry about it. But if you go over the federal limit, doesn't the LTD just get paid to you as cash? Curious to know how you could do this one.

The Walrus

https://fdx.alpa.org/Home/Content/Co...e-2-26-16.aspx

busdriver12

Should have figured the Walrus would know how to screw himself.

Seriously, thanks! From a quick look at it, it looks like you could do that to yourself if you contribute more than 5% after tax. Since I don't contribute anything after tax, doesn't seem like it would be a problem. In fact, contributing anything after tax anyways, doesn't seem like the best of deals. Better to do a Roth, or a back door Roth if you need to.

Nightflyer

Back door Roth first, then max out the $53,500, then the $6000 extra if you are over 50.

All of the above if you can.

I've got 10 years left. The way I look at it, if I max out the $59,500, that is another $600,000 or so at retirement.

I've flown with many guys that don't max out their savings, but that is a personal choice.

I chose to save, but others live for today.

Nightflyer

Thanks Walrus!

Every crew member should read that article from cover to cover, so they can understand how best to maximize their 401K portion of their retirement.

kronan

Backdoor Roth from a Doctor (yes, Dr's are traditionally worse than pilots....but there are outliers in every profession)

Backdoor Roth IRA | The White Coat Investor - Investing And Personal Finance Information For Physicians, Dentists, Residents, Students, And Other Highly-Educated Busy Professionals

And the advantage of After Tax contributions to our B plan is that upon retirement you can roll them over into a Roth IRA. Benefits of a ROTH are no RMDs (and they make eliminate the tax consequences if you need a little extra buckage to help pay for the new Corvette)