Nope...ALPA put out a benefits guide. Should be in the content locker I believe.

Thanks. That may explain why $4.5m was distributed from the RHA this year. Retirees and LTDs can use it.

I’ve heard several guys say to stay away from investing in the retirement target date positions offered by Schwab. Anybody mind explaining why? Also, can someone explain what the difference is between the B fund and C fund. I’ve tried to research it and all that I can come up with is that we’re being paid our 16% from two different sources??? Something like 9% coming from the B fund and the other 6% coming from the C fund??? How or if that effects my account... I don’t know.

For a post bankruptcy new-hire, the B and C are effectively the same thing in practice. (The C was added when the pension was obliterated.)

If you don't want to manage anything, ever, the target date funds are perfect. They are a basket of low-cost and automatically balanced index funds. Literally set it and forget it.

Individual index funds have lower fees, however, if you want to build your own portfolio. Fees can add up over time.

Compare:

PRAP 2040 Target Fund (pdf)

PRAP Total US Equity Index Fund (pdf)

One big knock folks have for the target date funds is the fact that they get 'conservative' early (the mix of stocks vs bonds vs cash). However, one can simply select a different target for a different mix as desired.

Thanks cadetdrivr. Low-cost, set it and forget it sounds like my cup of tea. I also don’t mind leaning towards the conservative side, but it’s good to know that switching the target date could be an option. I don’t know what I don’t know what I don’t know when it comes to this stuff.

Target Date funds are most assuredly NOT low cost. Those fees compound massively over the course of your life and lead to a massive opportunity cost. This is the primary argument against them.

Agreed, but it's also all relative and the lesser of many evils.

Our target date funds absolutely cost more than the pure index funds, but they are still far less expensive than traditional managed mutual funds or paying an outside advisor to do the same thing for you on TOP of the fund expenses.

Like you, I assume, I also manage my own investments and probably for the same reasons.

If I did not, however, the target date funds would be a far better choice than paying for active management. But yet we have pilots tripping over themselves to pay outside advisors big bucks to do something that is actually pretty simple.

This is similar to the response I received when I PDR'd the R&I committee. They said they could have combined it but wanted pilots to be reminded what was taken from them (pension), so they left it separate so you can see the dollars that that part of the match is worth.

The PRAP target date funds are about 40 Basis points (40/100 of 1%) because they are a mix of passive and active investing.

Industry average about 63 basis points.

Vanguard that RHA invested in about 9 basis points.

Schwab as two suites. Index funds for about 8 basis points and active management in the 40-60 range.

PRAP target date funds have performed well, both gross and net of fees.

Maybe I’m missing something, but I’ve only been charged $2.30 worth of fees from Schwab in 6 months. Are these fees linked to the size of the account? Can I expect the fees to get bigger as the account grows?

Also, flap you’re gonna have to dumb it down for me please. Define basis points and 40/100 of 1%? And if ya don’t have anything better to do, explain active and passive management. I know what it is, but I want to make sure you know what it is.