What income are you expecting to shelter in the cash balance plan? Excess 401 money is not likely to be a significant dollar amount for most pilots I would think. if its an optional plan, I guess each pilot can make their choice.

If you’re purely looking to shield taxes from money stuffed under a mattress the MBCP is a good vehicle. If you’re looking to grow your money and wealth efficiently IMO the MBCP is a poor vehicle. Glad to see the union is pursuing it as optional only

Current 415c limits allow for 56k of contributions, provided those contributions are based on no more than 280k of earnings. Our contract provides for DPSP Cash beyond both of those limits. Raising the company contribution percentage and contributing personal money via 401K could create the opportunity to shelter some money. Please just make it optional rather than a mandatory confiscation of DPSP Cash into MBCBP.

Exactly. Its why I asked the whole life insurance question.

Substandard returns.

yup. Some smart guy once told my you can go broke (or to jail) focusing on how to avoid taxes....instead of how to make money.

I dont think what the union proposed is a good idea, I do like that it could be “optional”. But, I do believe in the infinity banking system.

One is tax deferred, the other is tax free as far your insurance doesn’t go into Modified Endowment Contract and you don’t let it lapse. The government imposed limits in the late 1980s, because people were sheltering money in them. You can’t pass a line, if you do, it becomes taxable.

Mutual insurance companies have been around before the wall street.

I'm confused by the additional plan being optional. Could have sworn the R&I committee said in a road show that IRS regulations would force excess DSPS money into the new plan instead of being paid in cash. Anyone else remember that being said? It wasn't on a slide, but a response to a question.
Optional would be nice, but I was under the impression it wasn't possible.

Thought I read that in their study materials of a year ago. I’ll look for it.


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As far as I know the plan would be mandatory until the IRS says it’s not (like the VEBA). My guess is that this upset enough people that they put the word “optional” in the opener. Nobody knows what the plan will be until the company agrees and it’s set up with the IRS. Beware of buy-in on negotiating an “optional” plan that becomes mandatory in the end.