Hi all,

I keep hearing everywhere that Fedex and UPS have great retirement plans but Im not really familiar with how it works. All I see in APC Fedex page is $500/yr in 401k, A/B fund 2%/8%. I have always worked in places where they just give you 401k matching, and Im trying to learn more about the details on Fedex retirement.

So what does the $500/yr mean (401k)? What is the difference between A fund and B fund? does fedex offer defined contributions like AA’s 16% into the 401k?

Please excuse my ignorance, Im just trying to gather as much information as possible since Fedex is currently my top choice for my future and I want to understand all the details in case they decide to hire me one day.

Thank you!

FDX has basically three retirement plans:

401k, with a max of $500 company match

Defined Contribution “B-Plan” of 8%; basically 8% of your gross earnings (up to the are deposited into a brokerage account in your name up to IRS limits for annual compensation and defined contribution, which includes 401k. Often times referred to as a Money Purchase Pension.

Defined Benefit “A-Plan”; this is a traditional pension. FDX has a benefit of 2% final average earnings (“high 5” of last 10 years I think, not 100% sure) up to their contractual income limit of $260k, with a max years of service of 25 years.

What does this mean?

Lets assume you work 26 years at FDX, and average $320k in your “high 5” years.

Your defined benefit will be 2% of final average earnings (260k contractual limit), which is $5200/year of service. Max YOS toward the defined benefit is 25, so $5200 * 25 = $130k annual defined benefit.

Now lets say you work 18 years, with a “high five” of $240k. 240k * 2% = 4800/YOS * 18 YOS = $86,400 annual defined benefit.

Disclaimer: UPS guy, so hopefully I’m not off on anything. In case you care, we get no 401k match, a 12% defined contribution, and have a 1% FAE or (more lucrative) Flat Dollar Amount Defined Benefit that basically gives retiring Captains $4k per YOS (FOs get 80% CA amount) up to 30YOS. ERISA & IRS requirements make the flat dollar necessary to renew every contract negotiations.

Hope this helps...

Also, I believe Defined Contribution goes to 9% 2020 or 2021?

11/1/19 is when it goes up a percent.

Thank you for the information!

So for the A/B plans, could the company take it away in a financial crisis? I had an AA jumpseater the other day and he told me about how AA took away their pensions a while back. People who had over 2-3 million dollars saved for retirement, all of the sudden, gone. How could something like this happen?

It couldn’t. Money in your name (401k, defined contributions) are yours and a company can’t touch them. In bankruptcy companies CAN (and have done) void economic sections of contracts such as pensions (defined benefit plans).


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Question from an outsider hoping to apply soon, I’ve seen several other threads where it’s stated that many people retire on December 31st. Is that related to the “high five” calculation or something else?

If Fedex and/or UPS ever declare bankruptcy we all have much bigger problems!! Not full proof by any means, but pretty darn close. All the major pax carriers (except Southwest) went through bankruptcy to start over, clean slate. If did wipe out many people’s pension. Corporate America at it’s best.

No. Your years of service is calculated by month. So if I were to retire next week I would have 18 years 10 months or about 37.7% times my high five. the 31 Dec thing is a good deal that expires soon from our last contract, it allowed pilots who committed a year out to get up to 50 cents on the dollar of their sick bank paid out if they jump through enough hoops.

No, January 1, 2020. 28.D.4 in the contract.