Minimum Cash Value plan and the IRS
04-11-2019, 02:13 PM
#81
Gets Weekends Off
Joined APC: May 2012
Posts: 1,418
A major issue I have with "making deadzoners whole" is when retired pilots are ignored. IF, big IF, we are doing some sort of targeted retirement for those who lost pensions, the only fair option includes retired pilots. I can't get behind righting the wrongs of the past if it doesn't address the group who was wronged.
As far as the MBCBP goes, this is a major cost savings initiative for the company and should be considered in valuing the contributions. If rough numbers, a 4% increase in pay would be the same net cost to Delta as a 5% MBCBP contribution. We won't see those numbers at the line pilot level, but I expect our negotiation team is looking at the entire picture. Simply converting DPSP Cash to MBCBP is a huge cost savings for the company, with limited benefit to the pilot group.
As far as the MBCBP goes, this is a major cost savings initiative for the company and should be considered in valuing the contributions. If rough numbers, a 4% increase in pay would be the same net cost to Delta as a 5% MBCBP contribution. We won't see those numbers at the line pilot level, but I expect our negotiation team is looking at the entire picture. Simply converting DPSP Cash to MBCBP is a huge cost savings for the company, with limited benefit to the pilot group.
04-11-2019, 02:37 PM
#82
Roll’n Thunder
Joined APC: Oct 2009
Position: Pilot
Posts: 3,816
I think he's more referencing people who have retired post-DB termination up until today.
04-11-2019, 03:23 PM
#83
Gets Weekends Off
Joined APC: Apr 2011
Position: retired 767(dl)
Posts: 5,738
04-11-2019, 03:32 PM
#84
Gets Weekends Off
Joined APC: Jun 2015
Posts: 4,116
As to the other qualified component, It would be useful to recall....it wasn’t management that demanded a lump payment feature from a qualified benefit trust structured to pay annuitized benefits. We did that. Management was more than happy to hand us the rope.
Checkers boys. We play checkers.
Management knew exactly what they were doing when they ran into the theater and yelled FIRE!....by announcing the pension was in peril. They accomplished exactly the desired outcome of a run on the bank....allowing the corporation to escape the unqualified payments with the stroke of judges pen, and also escape the qualified obligation in precipitating the exodus of pilots bailing out at the screams of FIRE!
Which depleted the qualified benefit trust to a level that required termination.
04-11-2019, 04:32 PM
#85
Gets Weekends Off
Joined APC: Apr 2007
Posts: 4,608
I'm not opposed to a higher benefit for older pilots based on the premise of what was lost in bankruptcy. If that is the logic for a large immediate value in the MBCPB, it needs to be applied accordingly and include recent retirees that also fit the definition of "deadzoner".
04-11-2019, 05:48 PM
#87
Gets Weekends Off
Joined APC: Jun 2015
Posts: 4,116
Bad...
It’s difficult to imangine our financial ‘experts’ could have served us more poorly. Yet they are here once again peddling the wonders of climbing into bed with management as an ‘improvement’ to retirement security.
It really is completely unbelievable.
It’s difficult to imangine our financial ‘experts’ could have served us more poorly. Yet they are here once again peddling the wonders of climbing into bed with management as an ‘improvement’ to retirement security.
It really is completely unbelievable.
04-12-2019, 05:14 AM
#88
Gets Weekends Off
Joined APC: Dec 2007
Posts: 5,570
Good article from Kiplinger's on Cash Balance Plans:
https://www.kiplinger.com/article/re...nce-plans.html
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https://www.kiplinger.com/article/re...nce-plans.html
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04-12-2019, 06:24 AM
#89
Gets Weekends Off
Joined APC: Jun 2015
Posts: 4,116
Not really relative to our situation.
Just as delta management did not screw themselves out of their own pension plan....a business owner creating his own CBDB plan isnt gona screw themselves.
The CBDB conversions are typically salvage exercises to ward off termination.
Pension plans...of which the CBDB is included are ponzi schemes. At some future date the obligations will eventually overcome the capacity of the corporation to pay.
I wouldnt get back in bed with my employer management for retirement security if my life depended on it.
Wouldnt want some future CEO to once again 'lose sleep' over not tsking enough from this pilot group.
Just as delta management did not screw themselves out of their own pension plan....a business owner creating his own CBDB plan isnt gona screw themselves.
The CBDB conversions are typically salvage exercises to ward off termination.
Pension plans...of which the CBDB is included are ponzi schemes. At some future date the obligations will eventually overcome the capacity of the corporation to pay.
I wouldnt get back in bed with my employer management for retirement security if my life depended on it.
Wouldnt want some future CEO to once again 'lose sleep' over not tsking enough from this pilot group.
04-12-2019, 06:35 AM
#90
Gets Weekends Off
Joined APC: Dec 2007
Posts: 5,570
Not really relative to our situation.
Just as delta management did not screw themselves out of their own pension plan....a business owner creating his own CBDB plan isnt gona screw themselves.
The CBDB conversions are typically salvage exercises to ward off termination.
Pension plans...of which the CBDB is included are ponzi schemes. At some future date the obligations will eventually overcome the capacity of the corporation to pay.
I wouldnt get back in bed with my employer management for retirement security if my life depended on it.
Wouldnt want some future CEO to once again 'lose sleep' over not tsking enough from this pilot group.
Just as delta management did not screw themselves out of their own pension plan....a business owner creating his own CBDB plan isnt gona screw themselves.
The CBDB conversions are typically salvage exercises to ward off termination.
Pension plans...of which the CBDB is included are ponzi schemes. At some future date the obligations will eventually overcome the capacity of the corporation to pay.
I wouldnt get back in bed with my employer management for retirement security if my life depended on it.
Wouldnt want some future CEO to once again 'lose sleep' over not tsking enough from this pilot group.
But questions arise. Who are ideal candidates for cash balance plans? What professions make most sense for cash balance plans? Does a cash balance plan make sense for me?
The truth is that there are many companies and professionals who are ideal candidates for cash balance plans. The following are the top 5 ideal candidates for cash balance plans:
Companies with consistent profits (historically and forward looking)
Professional service businesses (doctors, lawyers, CPAs, etc)
Companies looking to improve moraleand employee retention
Owners trying to “catch-up” on retirement savings
Owners looking to maximize tax deductions
https://www.emparion.com/top-ideal-c...balance-plans/
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