I don’t think it’s a”play” by anyone. As I read it, they are implementing it this way to comply with an IRS rule they expect they’ll have to comply with anyway. I’m not totally confident on that analysis though. I’m glad they are putting it out for a vote and putting out pro and con letters.

 

Wouldn't it have been better to wait and get a definitive answer to that before potentially railroading something through that, at best, doesn't alter the status quo and at worst considerably reduces the options a pilot has to make decisions for themselves and takes away control over more dollars in their retirement?

I'm just not understanding what the rush is and who it benefits. I'd rather take the time and make sure it's done correctly than do something just for the sake of getting it done.

 

Use the RHA calculator to minimize spill? No more with this LOA. The 2025 401(a)(17) is effectively reduced from 350 to 273.5 with 46.5 cap. If you previously minimized spill, loa would reduce take home pay in under to reach 415c limit starting in 2025.
Appreciate negotiating committee looking for solutions to the old RHA limitations. Active rha was a good step. Mbcbp was another good step. However don’t agree with loa implementation and eliminating option to minimize spill. Let’s get IRS approval first before making the CBP rules.

 

This is my thought pattern as well.

 

This is pure speculation, but it’s probably because they are fairly certain that rule will apply, but if they don’t implement it starting in Jan they won’t be able to implement the CBP until 2026.
I’m mostly just playing devil’s advocate. I’m not particularly animated by this in either direction.
It’ll have a fairly minor positive effect for some, and a fairly minor negative effect for others. It’ll have next to 0 effect on me 🤷

 

If the IRS doesn’t approve this, what do we get in return from the company? I’m assuming we gave up negotiating capital for this and I’m also assuming we get nothing if it fails?

 

From the LOA:
“In the event the IRS does not approve the CBP and all parties hereto agree there is no longer a reasonable ability to receive approval of the CBP, the Company and Association shall, within a reasonable time, discuss unwinding the provisions of this LOA. In addition, any amounts in the CBP will be redirected with respect to each Pilot as determined by ALPA, subject to applicable law and the Company’s ability to reasonably administer.”

Pretty weak language if you ask me.

 

Harumph! I want choice, not a fund with 70% bonds.

 

Everybody wants their cake and to eat it too. The CBP by its definition in our UPA is literally ANOTHER choice from what we currently have (RHA only). It is the only way to get PRAP spill into our names and part of our estate. BTW, the “conservative” funds the RHA portfolio are in have returned 11.52% for me this year…

The IRS rule is what stipulates that the company contributions cannot be more than the total allowed (70,000) minus our pre-tax contribution (23,500). It has nothing to do with the LOA, it is an IRS rule for CBPs. As mentioned above, these are typically only allowed to go into effect on 1 January, so unless we want to wait until 2026 we need to lay the foundation now. Our UPA states it will be done in 2025, ALPA and the company have come up with a way forward to meet our contract while acknowledging we are beholden to the IRS.

 

My beef is being forced into a fund that is 30% equities. Not sure what that has to do with the returns for the RHA you posted, because you ain’t gonna be getting double digit returns with the CBP fund.