Yes, you are correct. After 2014 when the IRS limit and the FedEx cap were equal did away with any non-qualified pension payout.

Actually, I think even before then, there was some 'slight of hand' magic that was done that would allow for a fully qualified pension if you had the $260K high five. The calculation required a CRAY computer to handle it. But I recall the ALPA retirement folks talking about it during one of the retirement seminars.

MG2

The retirement folks run the numbers for you. The multipliers come from the charts in the Pilot Benefit Book. It has to do with longevity, multipliers before 1999 and after 1999, some factor for international, etc., etc. One of the formulas actually lowered my monthly pension.I tried to look them over when I got my retirement statement but I finally just gave up and said they looked pretty close to what I was expecting.
I was very happy to get a nice lump sum check rather than a few hundred dollars extra every month, especially since I self insured my pension. Oh well, my ship has sailed and it is what it is.

Jeez this sounds way more confusing than I thought it was. To clarify this for us simpletons....if you retire now, you are age 60 or over, with at least 25 years of service and have made at least 260K for your five year average, you should end up with 130K annual pension, right? For your average pilot, no extenuating circumstances. Right or wrong?

Yes, if you are single or take 0% Joint Survivor (separate life insurance). If you take 50% Joint Survivor, expect about 10% less depending on spouse's age, etc.

My understanding it there is also now an option from the new contract that is the 50% Joint Survivor with a flex back option. This option if selected would allow you to snap back to the 130k amount in case your wife passed away before you. Like all things this too will cost you a fee taken from your 50% JS amount. Three years to go, so I guess I need to start looking at this stuff.

Let me add my 2 cents. The answer is 'yes, if'. The 'if' being that you take the straight line annuity, that is the 0% J&S option. There are quite a few options to consider, but everyone of them but the straight line annuity will reduce the amount you receive from the $130K.

MG2

Glad to know it was what I thought. From talking to people, it sounds like it's generally better to take the straight line annuity and get a life insurance policy if you feel you need one. That is, if you are in good health and your spouse is the same age as you.

I started about four years before I retired and ordered an estimate from the pension people. I am assuming you can still do this. I always waited until after March 30th so all of the previous years earning would be included in the statement. I just made up a date towards the end of the year as my estimated retirement date so I knew I would get full credit for that year. It gave me some time to try to understand all of the numbers and educate myself on just what all of these different options involved especially the survivor benefits.
My wife is six years younger than me and I was really amazed at how large a chunk they took to provide a survivor option. It was over 14% for the 50% survivor option and almost 25% for the 100% option.

Maybe yes. Maybe no. If you take the 130K with no survivor benefits that works out to about $10.833 bucks a month before any taxes or deductions are taken out. Each marriage is different but my wife is a year and a half younger than me. In talking to a few of my buddies that have gone before me, they say there deduction for taking a 50%SB was around 10%. So now that number is roughly 117K per year or $9750 a month. Again this is all very rough and I have not talked to the benefits folks yet. Add in my military retirement, social security for me and my wife and that 117K number goes up. Now if you've had a 25 year career here at FedEx and invested well your 401k could be well north of a million dollars. More like two. I have other investments that are substantial too.

I learned a long time ago from an old Eastern captain to live within your means. Pay cash most of the time. Don't buy every friggin toy you see. Stay away from the crazy quick rich investments. I still live in the same house. Still the same wife (BIG PLUS). I have the airplane, boat, cars, and motorcycle. Not the latest and greatest of anything but all free and clear.

Also at age 70 and a half you have to begin withdrawing funds in increments from your 401K so that Uncle Sam can get his cut in taxes. I guess you can either live on what's left or reinvest it.

I was asking my brother who is a financial advisor with Merrill Lynch
the bit about getting an insurance policy and he certainly understood the practice but pointed out one facet for the policy to pay off. You have to die within the policy time frame. If your lucky enough to out live that time frame than you payed all that premium but get nothing for it. The last thing I want to do is to give my wife a million dollars on top of the well provided life she has. It would be like Ramada getting 2000 dollars from Charlie Sheen in Hot Shots and now she can just blow it all on hats.

Bottom line to all of this is that each one us needs to look at all the factors to determine what's best for him and his family. Cheers.