nightfreight

How about having the ability to opt in/out of Veba. If someone doesn't need it, why are they funding the other guys health care? This is a little different when it comes directly out of your paycheck.

mrzog2138

VEBA has nothing to do with when you retire. And by VEBA, I mean the VEBA contribution of $25,000 to your HRA. If you retire at 60 and have turned 53 by Jan 1,2007 you get $25,000 in your HRA. If you retire at 65 you get the same $25,000. THat is where I think most people are upset. The purpose of the HRA was to help fund your medical when you lost coverage from the company and until you received Medicare at age 65. But, for someone who retires at 65 they are fully covered. Basically we are paying for all their deductibles and their survivors deductibles and incidentals. I also think their the VEBA/HRA is VERY SUSCEPTIBLE to miss appropriated expenses. I do not know how well the union is managing this. But managing a $43 million account does take a lot of man-hours and incurs a lot of extra costs.

My biggest gripe is that the CBA sets an AGE for getting VEBA contributions. For example, if Pilot A was 52 on Jan 1, 2007 and had 25 years with FedEx. He was contemplating an early retirement at age 55 and had all his finances in order. Guess how much he would get contributed to his HRA from VEBA? ZERO, ZILCH, NADA. However, if Pilot B was 53 on Jan 1,2007 under the same scenario he would get $25,000 in his HRA. Is that equitable? Or if pilot C works until he is 68 he gets the same amount, as someone who retires at 60.

fdx727pilot

You're at least half wrong. There are two VEBAs. One is the one to fund HRAs for pre-medicare health care. That money's gone (the $25K per eligible pilot.) The other VEBA is for post-retirement post-medicare health insurance, and is the one that is funded with that $43M payment and by a $0.50 per credit hour payment. The post medicare coverage is only for post 65 year olds, and is not restricted to those now 53 or older.

Either way, I'm asking if you want to get rid of 1 or both, which take care of retiree health care, and then expect a pilot nearing 60 to happily retire, when mrzog2138 has gutted his retiree medical coverage? In case you forgot, that was one of our "cornerstone" issues for the last contract.

mrzog2138

Two VEBAs? Really. Okay. When do I see my contribution to my HRA. I suggest you read Section 27.H.7.B to see the qualifications for VEBA. IT IS SPELLED IN BLACK AND WHITE. And after reading explain to me why in the CBA we qualify only a small portion of the pilot force (those of the age 53 on Jan 1, 2007)? Why should someone who is turns 53 on Jan 2, 2007 not be eligible for the VEBA contributions when he retires? Why the arbitrary age of 53? Then show me how this contract guarantees someone who is my age (39) will receive any pre-medicare (VEBA) contribution in which I am paying into? The Retiree Group Health Plan is entirely different (which is a "cornerstone" issue of the contract). VEBA was designed for those retiring at 60 to cover until they qualify for Medicare. I suggest you read the contract. Please explain to me if I am mistaken

fdx727pilot

Gladly, since you are wrong. There are two VEBAs (this was pounded into my head during the TA voting period by FDXLAG.) One is the one mentioned by you in Section 27H. It covers the retirement guys from 60 to medicare age. According to 27. H. 7. b.

"b. For each eligible active pilot (i) having a seniority list number on August 25, 2006, (ii) who has attained at least age 53 before January 1, 2007, (iii) who is expected to meet the age and service requirements for coverage under the Retiree Group Health Plan as of his attainment of age 60 or older, and (iv) who retires on or after August 26, 2006, the Company will make a one-time cash payment of restricted signing bonus to the VEBA equal to $25,000. Such contributions shall be made no later than January 28, 2007 (90 days after October 30, 2006). The contribution and interest attributable thereto shall be transferred to the HRA established with respect to that pilot upon the date that the pilot attains age 59, or if earlier, as soon as practicable after the pilot dies. If a pilot attains age 59 or dies prior to the date that the Company funds the VEBA pursuant to this Section 27.H.7.b., the contribution and interest attributable to such pilot shall be transferred to the HRA as soon as possible after the date on which the Company funds the VEBA."

The company has made that contribution, $25K per eligible pilot, it is funded, and in no way other than possible lost opportunity, is it funded by you.

Now, since you recommend reading the contract, please turn to Section 27. I.

Sections 2 and 3 read
"2. With respect to pilots who retire on or after January 1, 2008, and their eligible dependents, the Retiree Group Health Plan shall provide solely for coverage for the retiring pilot and/or his eligible dependents for the period prior to their attaining Medicare eligibility age. The Association shall establish, sponsor and maintain a Post-Medicare Retiree Health Plan (“Post-Medicare Plan”) and Voluntary Employees' Beneficiary Association (“VEBA”), to be effective January 1, 2008. Pilots retiring prior to January 1, 2008, who have attained Medicare eligibility age may, if eligible, elect coverage under the Post-Medicare Plan described in this Section 27.I. (below). The Post-Medicare Plan and VEBA are collectively bargained for purposes of Internal Revenue Code Sections 419 and 419A.


3. The Company will make a lump sum contribution to the VEBA of $3.2 million, payable no later than November 30, 2006, with an additional $40 million contribution to be made to the VEBA no later than June 1, 2007.


As soon as practicable after October 30, 2006, but not later than January 1, 2007, the Company will contribute to the VEBA 50 cents of each paid credit hour for each pilot having a seniority list number (which would otherwise be paid to the pilot in cash) as the pilot's ongoing monthly contribution to the Post-Medicare Plan/VEBA. The Company shall remit such contributions to the VEBA no later than the 15th day of the calendar month following the calendar month during which the credit hours were actually paid. On the effective date of the Company's contribution of 50 cents per paid credit hour, the hourly pay rates agreed upon for pilots will be established as book rates. Actual pay rates will be 50 cents less per hour. All retirement and welfare benefits based on pay will be based on pay determined under the book rates. The purpose of this provision is to allow the ongoing monthly VEBA contributions of 50 cents per paid credit hour to be funded out of compensation that would otherwise be paid directly to pilots in cash.

Lump sum and monthly contributions will be placed in an interest-bearing escrow account until the VEBA is established."

So the $43M that you keep whining about, along with the $0.50 per credit hour contribution is for Post-Medicare Plan. I'm not sure why you think the new regulated age changes our Post-Medicare (i.e. 65 and older, as of now) insurance needs, but feel to rant on unintelligibly.

mrzog2138

Fx727,

THERE ARE NOT 2 VEBA funds!!!!! There is one VEBA fund. Yes it does fund the PRP. But what everyone here is miffed about is the VEBA contributions to your (assuming you are over 53) specific HRA. The only pilots eligble to receive a contribution to their HRA from the VEBA fund are those that are 53 by Jan 1, 2007, as of this contract. The HRA account can be used pre and post medicare, and can be given to your survivors upon your demise. It is a credit card. Everyone is eligible for the Retiree Healthcare Plan which is funded by the company. You can choose to be eligible for the post-Medicare Retiree Healthcare plan (PRP) managed by the union. The PRP is separate from your HRA account. My point is, if you read any of my posts, is that there should not be a qualifying age in the contract for VEBA contributions to the HRAs. It should read "ANY PILOT WHEN THEY REACH THE AGE OF 59 will receive (insert dollar amount) contribution from the VEBA fund into their HRA."

Here are my two contentions. Answer this.

1. Pilot A turned 53 on Jan 2, 2007 (regardless of seniority or years of service) and is pondering retirement at age 55. According to this contract he would receive NO CONTRIBUTION FROM THE VEBA ACCOUNT into his HRA to help with pre-medicare costs. However, Pilot B who turned 53 on 1 Jan 2007, can fly until 65 and get a $25,000 contribution to his HRA account from the VEBA fund to help with all his medical costs. FAIR? NOT. One day = $25,000.

2. Why age 53? The reason is that in the next contract when VEBA contributions are changed to reflect the AGE 65 retirement, those individuals who have turned 53 on 1 Jan, 2007 will receive the $25,000 contribution from the VEBA fund no matter what. They are grandfathered. Is it fair that close to 4100 pilots are not eligible in this contract to receive any VEBA contributions to their HRA, something that has to be rectified in the next contract. What if the PSP becomes under funded? Is it just that the VEBA fund gave $25,000 contributions to individuals in this contract and in the next contract zero.

Finally. Should someone who flys to 65, has a fully funded A and B fund, and eligible for Medicare receive a $25,000 supplement to their HRA account courtesy of the "4100 or so pilots who were not 53 on 1/1/2007" and at the same time receive benefits from the PRP.

fdx727pilot

Whatever. Since you can't or won't read the contract or talk to the R and I folks, rant on.

nightfreight

I'd like to see VEBA as optional.

pdo bump

i think some of his points are VERY "intelligible."

by the way, was DW "coincidentally" age 53 when the contract was signed?

makes you go hmmmmmmmmmmm.

FDXLAG

I think his post were accurate also. There is one VEBA fund although there are two types of benefits that it supports. One of those benefits is BS for anyone working past 60.