DR K , 09-04-2020 04:53 PM
Line Holder
if you are a good steward of union dues you will consider a doomsday scenario.
HEY NOWORKALPA PLEASE ADRESS -
One result of this infantile fight and lack of real answers to important questions about risk and security is the postponement of other important discussions, such as the merits of changing the A plan to a purely productivity-based pension (VB/PSPP) versus one that is predominately based on longevity (current A plan).
For example, if a pilot takes the first upgrade and busts his behind or is awarded the 777 during indoc, it is possible to make high-5 type numbers (260k+) very quickly. Let's say in year 6, the pilot's spouse gets sick and the pilot spends 2 years taking care of her until she passes away and 3 years getting their kids back on their feet. During those 5 years the pilot drops or gives away most of his flying and does the minimum to stay current because that is what is best for him and his family. Now at year 11, the pilot has worked full schedules for 6 years and almost no schedule for 5 years. The results of this example are important and demonstrate one consequence of the new proposed pseudo-A plan.
In our current A plan, the pilot could go back to work when his family is ready and there will be absolutely no repercussions on the payout of his A plan at retirement and for the rest of his life. It is longevity-based for the most part, requiring only 5 years of heavy lifting. His B plan, which is purely productivity-based on flying credit hours, will suffer from those 5 years of very little paid at 9% by the company. The beauty of this diversified retirement system is that he will not suffer financially for his decision to take care of his family for the rest of his life and have to slave to make up for those 5 years.
In the proposed VB/PSPP plan where "every hour counts", the pilot will experience 5 years of almost buying 0 notional shares. Out of his 25 year career, this will result in only 20/25 years purchasing notional shares. Now, if I understand the VB/PSPP plan correctly, he will have ROUGHLY 80% of his pension due to those lost years, if the market has suffered and we are saved by a floor that somehow holds up to the court challenges, with give him .8 x 130 = 104k for his productivity-based A fund plus 80% of the B fund he could have earned if he had decided not to leave for those personal reasons.
This example demonstrates the pitfalls of 2 purely productivity-based systems. Having a traditional pension and a 401k style fund both supplied by one's employer is a golden setup, even more so after the current events taking place in our country and industry specifically. I know that if I work high 5 style for 5 years and then drop every other trip for the rest of my career (for the sake of argument), I can retire with a pension valued at several million dollars. There is no way I am giving that up for the promise of only breaking even while having lifetime consequences for dropping trips for any reason.
We haven't even scratched the surface of deferring our CURRENT pension for a few years to let it grow as though we were still working. That could yield payouts way more than 130k per year but is not talked about as a benefit of our current plan. I don't remember reading anything about deferment options with the VB/PSPP plan, are they available? My guess is not because "every hour counts" means not flying doesn't count. I could be wrong...
Couple all of these facts with the risk and regulatory issues that have yet to been addressed and the fake news about the prevalence of the plan in our country, and one can see why there are such important questions like cui bono and the absolute lack of trust in anything produced about the scheme. Please see past the extra $500/month or whatever it comes out to be a best and study all of the consequences if the plan goes right and all of the pitfalls if the plan goes wrong. Dr K.