FDXLAG

And with the DC plan their is no punishemnt for going longer than 25 years.

Or I could not touch the principal and safely take out about 100K per year. What is the take home difference between 100K and 130K anyways? Would you save/invest that much to guarantee 1.8 million in the bank?

I would bet this is a myth. I would bet pilots have a better track record than the public at large.

Depends on with who and how you invest.

I concur that their is no right and wrong. I am some what nuetral on the subject but you pro DB guys seem to think the rest of us are morons. There is a number where a DC contribution plus pay raise equals DB plan. But you guys never want to talk about it.

Busboy

GOOD GRIEF, man!!! That is exactly what I've been talking about!! But, I'm done.

Sorry, everyone.

PastV1

Instead of "discussing" so much about whether or not our A plan will be here why doesn't someone call the union and get the answer on what our A Plan is... a Qualified plan or an Unqualified. I believe ours is a
"Qualified" DB plan. Also, Pilots and some management people are the only ones left in the FDX DB plan. Most employees were moved over to a cash balance plan a few years ago.

RedeyeAV8r

Your painting things with a broad brush.

What you state might hold truth if (did I say if).

1. The pilot is young enough (has enough years of longevity left) to allow future DC contribution increases to grow to a size or value of the numbers being bantered here. (130K)

2. The Pilot has already been lucky enough to come close to maxing out his/her DB plan and any increased in DC amounts is icing.

It is not true for the majority of us who will not or cannot max out the DB plan. I do not think the JR guys want a policy change that will encourage guys to hang around after 60.
A majority of us have 10 years or less (again depends on what age a pilot will choose to retire between 60 and 65) but in those 10 years or less we have left a large increase in DC contributions will not make up for a capped or reduced A-plan.

Also another aspect to think of.

If a pilot goes out on LDT until retirement, he continues to accrue longevity for his DB plan and due to the AGE change has the option of remaining on LDT until 65.

That very same pilot loses all 401K and DC (B fund) contributions while on LTD. He loses nothing or very little from his A plan.

Something to consider.

Gunter

Guys are sticking around to 65. Few leave sooner. I don't think guys will change their minds based on a few dollars gained or lost. Those that leave at 60 have long term plans and value their health.

Often those that stay till 65 have no life. The extra money (or money lost if they downgrade to SO) is usually only a secondary consideration. They just want to hang out with the boys because there's no where else they'd rather be. If you ask them they'll say it's about the money because they don't want to admit the truth and risk ridicule.

Tuck

How do you figure you can take out $100k per year and not touch the principal? Most economists recommend you only take out 4% a year at retirement to make it last - that's even a bit more conservative than $130k/yr but don't think for a second that you're making more than about 3% in interest at that point - you'll be (if you're smart) in a VERY conservative mode by that point. Money markets were making about 1% last year or less with no inflation.

Pilots might have a better track record than the public at large but you need to compare them to professional hedge fund managers - that's where the DB plan money is. You won't compare to them.

I think this is a great discussion (except for the husband and wife he said/she said part). It's definite thread hijacking but very interesting.

As far as calling the union, for what? There's nothing listed here that can be "clarified" by the union.

Busboy

Our DB plan is qualified up to the ERISA limits. The excess amount is part of a non qualified plan.

But, just because the majority of our plan is "qualified", that doesn't mean it's completely safe. I'm sure that every undefrunded airline A-plan lost in bankruptcy, was qualified.

A qualified plan only makes it safe from creditors, not from being terminated, as far as I know. Of course, there are many tax advantages that go with it, as well.

RedeyeAV8r

Gunter I think you are painting with a broad brush.



The reason Most guys/gals are sticking around past 60 is that there is a BIG financial incentive to do so.

All former FT guys have not yet maxed out their A plans even if they have a combined 30 years of service. They won't max it out until 2014. (25 years FDX DOH of 1989). Most of the rest of the guys staying past 60 are on their second or 3rd Airline and many have 15-20 years longevity at 60. Every extra year gets them another 2% in their A plan and 401K/B plan contributions. That isn't chump change to their monthly retirement checks when they decide to leave.
I would say Original FDX guys who have already maxed out their A-plan are in the minority of most of the guys who are staying.

Due to circumstance beyond my control, I cannot max out the FDX A-plan until 65. Make no mistake I do want to stay that long and I hope we do nothing that will change or require it. The point I was trying to make was I do not think we (especially more JR guys) want to see changes to our current retirement plans, beyond those stated above that will incentivize (is that a word) pilots to stay past 60. I think we can all agree we would love to see MGT offer incentives for guys to leave early!

FDXLAG

I cant speak for any economists, but I would bet that your 3% number is based on the principal continuing to grow to match inflation. It is not a fair comparison to what our A Plan promises.

Huck

I humbly submit that that ship has sailed.

First piece of paper that will be shoved across the table to us, the first day of contract talks: the MEC resolution in favor of 65. It's the new normal. Can't have your cake and eat it too... even a labor lawyer can comprehend that.....