*MINIMUM BALANCES* New Polling Needed
12-22-2019, 07:56 AM
#21
Gets Weekends Off
Joined APC: Jun 2009
Position: Captain
Posts: 830
This concept is new to me, so before I take a stance and bombard my rep with emails for or against I need to make sure I understand it.
Assume we vote in favor of this TA. A 64.5 year old contributes roughly 2.5% in his last 6 months prior to retirement but this does not afford him the “minimum balance”. The example the union sent was $231,000 (give or take) based on $2mil earnings over 10 years. Since this 6 month pilot would only have a small sum in this account not meeting the minimum balance and therefore, the company would essentially cut a check to this individuals account for $231k, less whatever the individual contributed.
Now, Take a 30 year old, assuming they opt into the plan, presumably between ages 55 and 65 they make the contributions from their own income and therefore retire with the minimum balance and thus are not afforded a plus up from the company.
In summary, 64.5 year old gets a 230k contribution from the company while the 30 year old put 230k of their own money in.
Is this an accurate summary from how you all are reading it?
Assume we vote in favor of this TA. A 64.5 year old contributes roughly 2.5% in his last 6 months prior to retirement but this does not afford him the “minimum balance”. The example the union sent was $231,000 (give or take) based on $2mil earnings over 10 years. Since this 6 month pilot would only have a small sum in this account not meeting the minimum balance and therefore, the company would essentially cut a check to this individuals account for $231k, less whatever the individual contributed.
Now, Take a 30 year old, assuming they opt into the plan, presumably between ages 55 and 65 they make the contributions from their own income and therefore retire with the minimum balance and thus are not afforded a plus up from the company.
In summary, 64.5 year old gets a 230k contribution from the company while the 30 year old put 230k of their own money in.
Is this an accurate summary from how you all are reading it?
12-22-2019, 08:03 AM
#22
Gets Weekends Off
Joined APC: Apr 2018
Posts: 3,258
I would like to think(do think) the MEC has a big picture and isn't being driven by a vocal minority.
Instead of a the auto no/yes pontification, let's press them for more deets and "thought process" papers. If explained as to what and why their rational is, it may shed better light on the subject.
I acknowledge this information better be soon, real soon, before it progresses too far and people become entrenched in their decisions based on incomplete information.
Instead of a the auto no/yes pontification, let's press them for more deets and "thought process" papers. If explained as to what and why their rational is, it may shed better light on the subject.
I acknowledge this information better be soon, real soon, before it progresses too far and people become entrenched in their decisions based on incomplete information.
12-22-2019, 08:04 AM
#23
Moderator
Joined APC: Dec 2007
Position: DAL 330
Posts: 7,017
U
I am holding judgement on this plan until more details come out including:
**Eligibility. If Pilot A retires a week before Pilot B and Pilot B is fully plussed up but Pilot A gets squat I would probably be against it.
**PGBC offset: How does PGBC payments affect the minimum balance? The guys with the biggest bump to the MB also have the largest PGBC payments.
**Affect of a reduced final PWA percentage below 25%. What is the plan if the final percentage is 20% vice 25%?
One final thought. In general I am for helping the deadzoners but every time I see the actual plan I have second thoughts. If the goal is to help DAL Pilots who have been disproportionately burdened where is the plus up to help furloughed Pilots?
Furloughed Pilots also lived through the BK and made all the same sacrifices as the deadzoners, many are also deadzoners, why are they being ignored?
Scoop
Of course the new guys are "ALL FOR" a 9% increase in the DC plan. I am totally against it. That 9% should be straight line pay rates, otherwise, the pilots below the 415c limit are getting a windfall at the expense of the more senior pilots. Same game just different direction.
You do know that if you already hit the 415c limit that extra 9% comes as DC excess. As such, it is not pensionable, therefore no profit sharing on the DC excess. Consequently, the same 9% gets the newer guys a "windfall" at the senior guys expense.
But I guess they are "OK" with that?
You do know that if you already hit the 415c limit that extra 9% comes as DC excess. As such, it is not pensionable, therefore no profit sharing on the DC excess. Consequently, the same 9% gets the newer guys a "windfall" at the senior guys expense.
But I guess they are "OK" with that?
I am holding judgement on this plan until more details come out including:
**Eligibility. If Pilot A retires a week before Pilot B and Pilot B is fully plussed up but Pilot A gets squat I would probably be against it.
**PGBC offset: How does PGBC payments affect the minimum balance? The guys with the biggest bump to the MB also have the largest PGBC payments.
**Affect of a reduced final PWA percentage below 25%. What is the plan if the final percentage is 20% vice 25%?
One final thought. In general I am for helping the deadzoners but every time I see the actual plan I have second thoughts. If the goal is to help DAL Pilots who have been disproportionately burdened where is the plus up to help furloughed Pilots?
Furloughed Pilots also lived through the BK and made all the same sacrifices as the deadzoners, many are also deadzoners, why are they being ignored?
Scoop
12-22-2019, 08:36 AM
#24
Moderator
Joined APC: Jul 2006
Posts: 5,897
Also, what Scoop said above.
12-22-2019, 08:44 AM
#25
Gets Weekends Off
Joined APC: Sep 2014
Posts: 867
I would like to think(do think) the MEC has a big picture and isn't being driven by a vocal minority.
Instead of a the auto no/yes pontification, let's press them for more deets and "thought process" papers. If explained as to what and why their rational is, it may shed better light on the subject.
I acknowledge this information better be soon, real soon, before it progresses too far and people become entrenched in their decisions based on incomplete information.
Instead of a the auto no/yes pontification, let's press them for more deets and "thought process" papers. If explained as to what and why their rational is, it may shed better light on the subject.
I acknowledge this information better be soon, real soon, before it progresses too far and people become entrenched in their decisions based on incomplete information.
12-22-2019, 09:05 AM
#26
Gets Weekends Off
Joined APC: Apr 2018
Posts: 3,258
U
If the goal is to help DAL Pilots who have been disproportionately burdened where is the plus up to help furloughed Pilots?
Furloughed Pilots also lived through the BK and made all the same sacrifices as the deadzoners, many are also deadzoners, why are they being ignored?
Scoop
If the goal is to help DAL Pilots who have been disproportionately burdened where is the plus up to help furloughed Pilots?
Furloughed Pilots also lived through the BK and made all the same sacrifices as the deadzoners, many are also deadzoners, why are they being ignored?
Scoop
Unfortunately, both these issues lose sight of "fairness" when pondered upon by pilots. The pilots will usually view it as one group "subsidizing" another group at their expense. The end result is a s##t show.
We pay enough dues, use some of that dues to pay for a 3 panel arbitration to determine fairness, receive guidance then poll pilots using that guidance and recommendation. Might solve some problems as opposed to "senior pilots eating the young" or "screw those old farts, they had their day plus 5 years at the trough" mentality that keeps rearing its ugly head(at least on forums)
What we currently do is tantamount to polling people who pay NO federal taxes and ask if the rich should pay more. Or alternately, those that pay if they want their tax burden lowered. The answers would be as expected but they would never attempt to address "fairness".
Seems like a minor cost to incur to get unbiased opinions.
Additionally, the furlough question is less pressing due to the time required to recover. ie the DZ were hired in 85 and on, whereas the furloghess in 99ish 2001 time frame. After recouping pay/ DC the furloughed (most not all) have a much longer time to recoup, comparably speaking. Not that it shouldn't be looked at, but a lot thornier issue(what if a guy went back full time active duty, stayed at home as Mr Mom, got corporate gig worked at Home Depot etc etc )
Last edited by Buck Rogers; 12-22-2019 at 09:16 AM.
12-22-2019, 09:26 AM
#27
Gets Weekends Off
Joined APC: Jun 2009
Position: Captain
Posts: 830
U
I am holding judgement on this plan until more details come out including:
**Eligibility. If Pilot A retires a week before Pilot B and Pilot B is fully plussed up but Pilot A gets squat I would probably be against it.
**PGBC offset: How does PGBC payments affect the minimum balance? The guys with the biggest bump to the MB also have the largest PGBC payments.
**Affect of a reduced final PWA percentage below 25%. What is the plan if the final percentage is 20% vice 25%?
One final thought. In general I am for helping the deadzoners but every time I see the actual plan I have second thoughts. If the goal is to help DAL Pilots who have been disproportionately burdened where is the plus up to help furloughed Pilots?
Furloughed Pilots also lived through the BK and made all the same sacrifices as the deadzoners, many are also deadzoners, why are they being ignored?
Scoop
I am holding judgement on this plan until more details come out including:
**Eligibility. If Pilot A retires a week before Pilot B and Pilot B is fully plussed up but Pilot A gets squat I would probably be against it.
**PGBC offset: How does PGBC payments affect the minimum balance? The guys with the biggest bump to the MB also have the largest PGBC payments.
**Affect of a reduced final PWA percentage below 25%. What is the plan if the final percentage is 20% vice 25%?
One final thought. In general I am for helping the deadzoners but every time I see the actual plan I have second thoughts. If the goal is to help DAL Pilots who have been disproportionately burdened where is the plus up to help furloughed Pilots?
Furloughed Pilots also lived through the BK and made all the same sacrifices as the deadzoners, many are also deadzoners, why are they being ignored?
Scoop
It has been about 13 years since our 401k’s were filled with the note and claim money. There was also the MPPP that was paid out.
A pilot who is within say 5 years of retirement today would have had probably no less than 300k in the DC/401k after these payouts (including prior contributions). The market has averaged over 9% since that period. If you ONLY count company contributions of an average of 36000 a year, 1.9% dividend returns, that puts a pilot at age 60 with about 2.1 million not counting any of his own contributions. (Except what he had prior to BK) Take that out 5 more years to retirement and it is 4 million plus.
But let’s assume that the market slows and is closer to the traditional average from here on out. (5%) That same pilot is around 3.7 million dollars.. but at this point the average DC money is going to be more like $3600 a month (again, just company contributions) as you would hit the 270k cap. Of course this would also assume you did nothing with the DC excess, but let’s just keep it simple. That gets a pilot back up to 4 million.
4 million with that 5% growth is 200k a year, without reducing the principal. Take 250k a year out and you won’t out live your money. Worried about the markets? 2% in extremely safe money market type accounts would still allow you to withdraw 200k a year easily and pass some along to your heirs.
But wait.. what about the PBGC and the frozen benefit? Many are getting something from those sources as well.
So it boils down to.. what is the goal here (60%?) and exactly what assumptions are we using to justify it?
There are things we do know.
The value of the note and claim for each pilot that was forced into retirement accounts.
The value of the DC contributions for each pilot
The value of their PBGC
The value of their frozen DB
The stock market returns since the DC was implemented.
And now possibly, a guaranteed return with the MBCP that would take out some market risk.
I get it some aren’t gonna like the assumptions and that is fine... tell me what we should be using and what we should be using for the pilots going forward.
12-22-2019, 11:00 AM
#30
Gets Weekends Off
Joined APC: Mar 2014
Position: Cirrus CA
Posts: 224
Great post. And let’s call a spade a spade. We know that this is a dead zoner fix. Fine. But exactly what assumptions are being used to figure out who and how much needs to be made up?
It has been about 13 years since our 401k’s were filled with the note and claim money. There was also the MPPP that was paid out.
A pilot who is within say 5 years of retirement today would have had probably no less than 300k in the DC/401k after these payouts (including prior contributions). The market has averaged over 9% since that period. If you ONLY count company contributions of an average of 36000 a year, 1.9% dividend returns, that puts a pilot at age 60 with about 2.1 million not counting any of his own contributions. (Except what he had prior to BK) Take that out 5 more years to retirement and it is 4 million plus.
But let’s assume that the market slows and is closer to the traditional average from here on out. (5%) That same pilot is around 3.7 million dollars.. but at this point the average DC money is going to be more like $3600 a month (again, just company contributions) as you would hit the 270k cap. Of course this would also assume you did nothing with the DC excess, but let’s just keep it simple. That gets a pilot back up to 4 million.
4 million with that 5% growth is 200k a year, without reducing the principal. Take 250k a year out and you won’t out live your money. Worried about the markets? 2% in extremely safe money market type accounts would still allow you to withdraw 200k a year easily and pass some along to your heirs.
But wait.. what about the PBGC and the frozen benefit? Many are getting something from those sources as well.
So it boils down to.. what is the goal here (60%?) and exactly what assumptions are we using to justify it?
There are things we do know.
The value of the note and claim for each pilot that was forced into retirement accounts.
The value of the DC contributions for each pilot
The value of their PBGC
The value of their frozen DB
The stock market returns since the DC was implemented.
And now possibly, a guaranteed return with the MBCP that would take out some market risk.
I get it some aren’t gonna like the assumptions and that is fine... tell me what we should be using and what we should be using for the pilots going forward.
It has been about 13 years since our 401k’s were filled with the note and claim money. There was also the MPPP that was paid out.
A pilot who is within say 5 years of retirement today would have had probably no less than 300k in the DC/401k after these payouts (including prior contributions). The market has averaged over 9% since that period. If you ONLY count company contributions of an average of 36000 a year, 1.9% dividend returns, that puts a pilot at age 60 with about 2.1 million not counting any of his own contributions. (Except what he had prior to BK) Take that out 5 more years to retirement and it is 4 million plus.
But let’s assume that the market slows and is closer to the traditional average from here on out. (5%) That same pilot is around 3.7 million dollars.. but at this point the average DC money is going to be more like $3600 a month (again, just company contributions) as you would hit the 270k cap. Of course this would also assume you did nothing with the DC excess, but let’s just keep it simple. That gets a pilot back up to 4 million.
4 million with that 5% growth is 200k a year, without reducing the principal. Take 250k a year out and you won’t out live your money. Worried about the markets? 2% in extremely safe money market type accounts would still allow you to withdraw 200k a year easily and pass some along to your heirs.
But wait.. what about the PBGC and the frozen benefit? Many are getting something from those sources as well.
So it boils down to.. what is the goal here (60%?) and exactly what assumptions are we using to justify it?
There are things we do know.
The value of the note and claim for each pilot that was forced into retirement accounts.
The value of the DC contributions for each pilot
The value of their PBGC
The value of their frozen DB
The stock market returns since the DC was implemented.
And now possibly, a guaranteed return with the MBCP that would take out some market risk.
I get it some aren’t gonna like the assumptions and that is fine... tell me what we should be using and what we should be using for the pilots going forward.
You have a post that reflects my sentiments to the core.
I fly with Captains who show me their Fidelity accounts and tell me all about their toys. Yet they still are “burdened by the 60% FAE that they were promised.”
When I explain to them a 4-5% draw from their Fidelity cash, combined with their PBGC or pension payout is pretty damn near close (and that their Fidelity account is estatable, unlike their pension), they acquiesce and agree that they are, indeed, going to be okay. But they always know someone who knows someone, that we need to plus up and take care of because they are dead zoners...
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