AF OneWire,

1) Nobody has said that the compnay doesn't contribute the same amount.
2) You speak about the investment mix in a PRAP. I have my "safe" dollars in my PRAP in SGOV. It's liquid in my PRAP. It's accessible in my PRAP. I can borrow against it in my PRAP if I were buying another gome and needed some extar cash for a better down payment. Money in the PRAP and money in the CBP are not the same.
3) My vote on this is based on our overall UPA. We didn't ratify UPA23 with the thought of having to contribute more of our own dollars to max out our best "vehicle."
4) There isn't anyone here that does not want to leave more money for their heirs. We all do. But most of us want this language to be right. We're not trying to avoid leaving more money for our heirs. We all want the CBP. We want to get this language right because the effects of this will be permanent. Irreversible action switches are guarded for reason.

 

"Problem solved?" I answered part of this in my previous post. Money in the CBP and money in the PRAP are not the same. You don't want to find out the hard way. The CBP is a defined benefit plan. Not a defined contribution.

You're in your mid 40s? I'm in my 50s. Closer to 59.5 than you. And still have a stronger desire to get this right than you do.

 

There is already an IRS imposed cap on company PRAP contributions, does everyone already know this? Many on here seem unaware of that. And how many of us contribute $0 to our PRAP? Not many.

The status quo in this specific area is crap. The end-state CBP will very likely look extremely similar to this LOA due to company interpretation and IRS rules. I’d much rather get another venue to shelter from taxes now than wait another 2 years for virtually the same thing.

This should be a literal no brainer. Massage your overall portfolio to recognize CBP money as your conservative bucket. This isn’t hard, it’s not some silly conspiracy, it’s trying to get a 90% CBP solution to the pilot group 2 years early.

 

So it seems the main opposition people have is that now they would have to contribute some of their own dollars to the PRAP. Unless you like paying taxes every pilot should contribute to their PRAP. You are leaving a $23000 tax deduction on the table if you don’t.

Yes the CBP is less liquid. However the vast majority of your retirement $’s are still going toward the PRAP. So if you need to borrow from it (terrible idea BTW), you still can. In a year or two when the IRS gets around to it you can do the RHA thing if you want. For me (mid 40’s FO), the CBP is good opportunity to get 10s of thousands of dollars tax differed. I’d much rather have that than more RHA dollars. Most importantly it’s not some money grab from the rich WB captains as is being portrayed.

 

1) LJ Driver, yes, there is a cap on the PRAP. That cap isn't set by our UPA. It's set by the IRS. And that cap for 2025 is 59.5K, not the 46.5 we'd be agreeing to.

2) AF OneWire, I contribute to mine. And the ROTH 401. I’m not leaving 23K in tax deductions on the table. That said, I don’t want to implement an LOA that’s lacking in several areas that have already been written about. You’re in such a hurry for tax savings that you’re ignoring other several “gives” to the company. We currently don’t have a 46.5K cap on our PRAP. We can do this the right way. Delta has. Let’s try to get this right after the membership has spoken through voting.

3) Borrowing from the PRAP is not a good idea if you’re just going to blow the money. Housing is expensive. We have tons of young, newer, pilots that are at that age where they’re starting families. In general, yes, borrowing from the PRAP COULD BE a bad idea. In my case, I borrowed against mine when I came back from flying overseas while on furlough. I was a Guppy FO. I bought a house by using 50K from my PRAP as a downpayment. That allowed me to buy a larger house for the family while not having to sell our old house. Now both homes are worth triple what they were when I was a Guppy FO and we’ve been earning income for over a decade through rental income on the other home. I turned the money into something. And this is a tool that every UAL pilot could use if need be.

4) Of course you’d much rather have more CBP dollars than RHA. You have Tricare. Not every pilot here has that as an option.

 

Some of us prefer an aggressive portfolio in our PRAP without having to get somehow more aggressive due to MBCP. Again strangely Delta does not have this problem...

 

ok, side question for anyone…for those of us with Tricare, how useful is RHA? How much should be targeted?

 

At a minimum I would look at the Medicare rates and add some price increases.

 

Just a clarification, there isn’t a cap on the PRAP per se, it’s on the amount that can be matched by an employer. So different percentages will raise or lower the amount that can be contributed. The only limit on the amount to the PRAP itself is the 415C limit.

It’s an important difference to understand particularly when negotiating.

 

70K combined and 59.5K for those that aren't able to, or choose not to, contribute to their PRAP in 2025. 46.5 max PRAP company contribution if the LOA passes. The Annual Compensation Limit in 401(a)(17) is an IRS cap.