Dalpa R&I Roadshow
#351
It sounds like the tail is wagging the dog. This is very much present day tax solution driven. If that is the issue at hand, offer the NQDCP. Those soon to retire can defer a portion of their income to retirement saving on taxes now. A 5% (or whatever they choose) ROR on DPSP cash for near retirees does not do much for them anyhow. I get they are our highest earners and taxes are a real problem for them which is why I think the NQDCP is a good option. AND, it's OPTIONAL!
#352
I haven't spoken with either of those reps but I do know there is a focus to recover value for retirees and have a tax advantaged plan for future contractual retirement gains. With all the retirements upcoming, I think some improvements are desired and warranted. The problem is without a traditional pension, how do you achieve a comparable benefit? The money required to get there is all taxable above what we have with our current DC. That's a lot of value going to uncle Sam instead of the individual.
There are folks who can turn DPSP Cash into $100,000 of residual income in 10 years. They bought their freedom. They make $100,000 whether they get out of bed or not. Do you think you can do that with a MBCBP?
#353
The fixation on tax savings is perplexing. Folks have to look at the big picture which is Total Return. It makes no financial sense to give up total return just to say you saved some taxes. Even if the money is deferred you will pay money on the taxes coming out in retirement. Not only are the tax savings minimal, taxes are on sale right now. They likely won't be in the future. Forcing the entire pilot group into a $190 million dollar low risk fund outside of their control is a horrendous idea.
There are folks who can turn DPSP Cash into $100,000 of residual income in 10 years. They bought their freedom. They make $100,000 whether they get out of bed or not. Do you think you can do that with a MBCBP?
There are folks who can turn DPSP Cash into $100,000 of residual income in 10 years. They bought their freedom. They make $100,000 whether they get out of bed or not. Do you think you can do that with a MBCBP?
Again, your $100,000 wonder is not the target of this or any union gain in retirement. The average investment knowledge of 15,000 pilots is the average. We are part of a COLLECTIVE bargaining agent.
#354
No, I can't do that with this plan alone. But in a diversified portfolio this could be my conservative portion of my investment strategy, freeing my other monies to be more aggressive. It's just the attempt to get the most out of the company money we are able to get in negotiations now and in the future. Efficiency of additional retirement money is the objective. This low level of return (market risk) is necessary to make it universally acceptable. I can't believe we would want a 10+% return target with the associated market risk for those closer to retirement and those who are more cost average minded who have longer horizons. You can always be more aggressive with the other retirement money in the 401k or personal IRAs.
Again, your $100,000 wonder is not the target of this or any union gain in retirement. The average investment knowledge of 15,000 pilots is the average. We are part of a COLLECTIVE bargaining agent.
Again, your $100,000 wonder is not the target of this or any union gain in retirement. The average investment knowledge of 15,000 pilots is the average. We are part of a COLLECTIVE bargaining agent.
The $100,000 guy is actually not a wonder. Folks in their late 20s and early 30s have done it. Convert DPSP Cash into $300,000+ passive income like some guys did after the Real Estate crash now that's a wonder.
Based on feedback from the line and SM, looks like the pilot group collectively thinks the union should keep their hands off folks DPSP Cash. Secure the Bag.
#355
Gets Weekends Off
Joined APC: Apr 2008
Position: DAL FO
Posts: 2,169
No, I can't do that with this plan alone. But in a diversified portfolio this could be my conservative portion of my investment strategy freeing my other monies to be more aggressive. It's just the attempt to get the most out of the company money we are able to get in negotiations now and in the future. Efficiency of additional retirement money is the objective. This low level of return (market risk) is necessary to make it universally acceptable. I can't believe we would want a 10+% return target with the associated market risk for those closer to retirement and those who are more cost average minded who have longer horizons. You can always be more aggressive with the other retirement money in the 401k or personal IRAs.
And in no case should this even be on the table before most/all pilots are hitting the 415c limit with company funds. That is a benefit to all pilots, regardless of age or seniority.
#356
I agree with the above but eventually our retirement funding needs should exceed the current 415c limit for most every pilot. My first priority is 20% DC without a doubt. Then DPSP cash would be voluntary or only for those making more than the earnings contribution limit. A differed compensation set up should protect those who are close to retirement who want tax savings on DPSP cash. Eventually this becomes a bigger problem as more money that was intended for a tax advantaged retirement account is forced into regular income but not considered wages. With the retirement focus on this sect. 6, I hope we get to the 20% at least. Protecting DPSP cash is much further down on my list but any future retirement gains will require everyone to deal with it.
#357
Gets Weekends Off
Joined APC: Feb 2011
Posts: 766
I agree with the above but eventually our retirement funding needs should exceed the current 415c limit for most every pilot. My first priority is 20% DC without a doubt. Then DPSP cash would be voluntary or only for those making more than the earnings contribution limit. A differed compensation set up should protect those who are close to retirement who want tax savings on DPSP cash. Eventually this becomes a bigger problem as more money that was intended for a tax advantaged retirement account is forced into regular income but not considered wages. With the retirement focus on this sect. 6, I hope we get to the 20% at least. Protecting DPSP cash is much further down on my list but any future retirement gains will require everyone to deal with it.
I'm thinking the same thing. They could also achieve this with higher hourly rates. I would also like to see more company contributions to our HSAs as that can be used as healthcare for retirement which, as we know, we have no provisions for at this point. I'd also like to see a medicare supplement negotiated in as well.
#358
Moderator
Joined APC: Dec 2007
Position: DAL 330
Posts: 6,991
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.
That part left me feeling a bit suspicious about the whole darn thing.
I knew it, Hillbilly is Rick Perry.
https://m.youtube.com/watch?v=ZoNzwJGkM8s
#359
Gets Weekends Off
Joined APC: Apr 2008
Position: DAL FO
Posts: 2,169
I agree with the above but eventually our retirement funding needs should exceed the current 415c limit for most every pilot. My first priority is 20% DC without a doubt. Then DPSP cash would be voluntary or only for those making more than the earnings contribution limit. A differed compensation set up should protect those who are close to retirement who want tax savings on DPSP cash. Eventually this becomes a bigger problem as more money that was intended for a tax advantaged retirement account is forced into regular income but not considered wages. With the retirement focus on this sect. 6, I hope we get to the 20% at least. Protecting DPSP cash is much further down on my list but any future retirement gains will require everyone to deal with it.
I'm just not sold on THIS particular plan, in it's current form. That doesn't mean they shouldn't keep investigating (and polling the pilots) to see how we can address the challenges you're highlighting.
#360
Gets Weekends Off
Joined APC: Feb 2011
Posts: 766
This was just posted on my other question in a different thread.....I really hope this isn't real. Unfortunately, it's probably accurate. This just goes to show how short sighted some people are and why a MBCBP may appeal to some (or most).....
"I flew with a captain on the 7ER once who liked the idea of Caribbean turns, but wouldn't bid them because as one day trips, they had taxable per diem."
"I flew with a captain on the 7ER once who liked the idea of Caribbean turns, but wouldn't bid them because as one day trips, they had taxable per diem."
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