Dalpa R&I Roadshow
09-23-2018, 07:37 PM
#311
Gets Weekends Off
Joined APC: Dec 2007
Posts: 5,598
This is not an ideal investment. Im wondering if the real intent of this is to create a vehicle where large lump sum contributions can be negotiated from the company than ALPA determines whose notional account is credited. This would create a “squeaky wheel gets the grease” scenario creating haves and have nots. I’m sure the “decision makers” among ALPA would fall on the favorable side.
Why else are they talking about “weighted” plans?
Already witnessed a lopsided targeted DC scheme once. Not interested in repeating.
Why else are they talking about “weighted” plans?
Already witnessed a lopsided targeted DC scheme once. Not interested in repeating.
09-24-2018, 08:21 AM
#313
Gets Weekends Off
Joined APC: Oct 2013
Position: 7ERA
Posts: 950
I think a DC increase is a no brainier but I am curious about the DB options.
How does the fact that plenty of our guys are getting/going to get PGBC payments affect our ability to reinstitute some kind of DB?
I have seen guys post comments regarding this over the years but am not sure it's anything other than urban legend.
Scoop
How does the fact that plenty of our guys are getting/going to get PGBC payments affect our ability to reinstitute some kind of DB?
I have seen guys post comments regarding this over the years but am not sure it's anything other than urban legend.
Scoop
I’ve asked about any potential hurdles due to the PBGC having obligations to pay members for the old terminated plan. The answer was not clear at all and very “beat around the bush”. Essentially they said that 3 outside entities would have to provide approval for us to have a MBCBP. The IRS was one, the PBGC was one and I’ve already forgotten who the other entity was. The response was that the PBGC was the lowest concern of the 3 for them, but that was said in a sentence about how easy it would be to get approval for a plan that is fully funded. It completely ignored the real question which had to do with any potential conflict of the PBGC paying some of us for a terminated plan that Delta couldn’t afford in bankruptcy while also approving a new plan that Delta can now afford. That new plan does require premiums to the PBGC, although I get the reduced risk of termination due to it being fully funded at all times, supposedly. Part of the problem was that the people doing all the talking at the presentation were people who do NOT have a PBGC benefit. They were either pre-merger NW or were hired after the plan termination in bankruptcy. I didn’t hear a single person speak at the roadshow (from the front of the room) that was a pre-merger Delta pilot with a PBGC benefit. The primary speaker (frozen DB guy) seemed like he didn’t understand my question because he kept talking and babbling along with long winded answers that didn’t have diddly squat to do with the precise question I had asked. Even though I asked more than once.
That part left me feeling a bit suspicious about the whole darn thing.
09-24-2018, 09:07 AM
#314
Gets Weekends Off
Joined APC: Apr 2007
Posts: 4,614
What if....
We negotiated an increased DC contribution of 18% and kept everything else the same for the DPSP, including DPSP cash, MBD Roth and Roth 401k.
Then negotiated a separate 4% funding plan for the MBCBP. Following modern portfolio theory, the closer you are to retirement, the more you should have in stable return funds. With that in mind:
Any DC overages are paid in DPSP Cash as currently done. If permitted under plan guidelines requiring 100% participation, we could make the splits pilot option vs age based.
We negotiated an increased DC contribution of 18% and kept everything else the same for the DPSP, including DPSP cash, MBD Roth and Roth 401k.
Then negotiated a separate 4% funding plan for the MBCBP. Following modern portfolio theory, the closer you are to retirement, the more you should have in stable return funds. With that in mind:
- Pilots over 60 get 4% in the MBCPB
- Ages 55-60 get 3% in MBCBP and 1% in DC
- Ages 45-55 get 2% each
- Ages 35-45 get 1% MBCBP and 3% DC
- Under 35 you get 4% DC
Any DC overages are paid in DPSP Cash as currently done. If permitted under plan guidelines requiring 100% participation, we could make the splits pilot option vs age based.
09-24-2018, 09:41 AM
#316
Gets Weekends Off
Joined APC: May 2015
Position: A350 Both
Posts: 7,292
If recall our retirement was 60% of FAE of your last 3 years. I don't think its' out of reach for someone to be making $350,000 average. $210,000 a year would have been ones retirement income. That's $17,500 a month til you and your spouse pass. Again I don't remember the exact details of our retirement but I think the above is close.
Now the company pays 16% of your gross income, $350,000 x 16%= $56,000 a year vs $210,000 a year in retirement. One has to turn their monthly 16% contribution 4 times to equal what we had.
I think there's lots of room to go after the company to fund more and not us funding our own retirement. I don't mind pitching in but there's a disparity between what we get and what we would've had in retirement.
Now the company pays 16% of your gross income, $350,000 x 16%= $56,000 a year vs $210,000 a year in retirement. One has to turn their monthly 16% contribution 4 times to equal what we had.
I think there's lots of room to go after the company to fund more and not us funding our own retirement. I don't mind pitching in but there's a disparity between what we get and what we would've had in retirement.
09-24-2018, 09:50 AM
#317
Gets Weekends Off
Joined APC: May 2015
Position: A350 Both
Posts: 7,292
High income earners like us all ready have far enough tax deferred Retirement money. That's why the Mega Backdoor Roth is so popular. The MBCBP will wipe out that strategy. The Wealthy and High Networth individuals have a majority of their wealth outside of retirement accounts.
I have nowhere near enough tax deferred income. All those doors close at a certain level. My outside investments are doing well this year and for that I am thankful, but on April 15th I will be on the floor of my accountant's office sucking my thumb. It's a good problem, but you are nuts if you think we have enough tax deferred vehicles available.
09-24-2018, 09:55 AM
#319
Gets Weekends Off
Joined APC: May 2015
Position: A350 Both
Posts: 7,292
2) Pay off any and ALL debt. Debt is slavery.
3) Backdoor Roth doesn't work for everybody. If you are 'high income earner' it won't work for you either.
Under option 2, you pay more to Uncle Sam, but your disposable income is greater.
09-24-2018, 11:39 AM
#320
Gets Weekends Off
Joined APC: Dec 2007
Posts: 5,598
1) Never finance a depreciating asset. Ever. That is stoopid.
2) Pay off any and ALL debt. Debt is slavery.
3) Backdoor Roth doesn't work for everybody. If you are 'high income earner' it won't work for you either.
Under option 2, you pay more to Uncle Sam, but your disposable income is greater.
2) Pay off any and ALL debt. Debt is slavery.
3) Backdoor Roth doesn't work for everybody. If you are 'high income earner' it won't work for you either.
Under option 2, you pay more to Uncle Sam, but your disposable income is greater.
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