MBCBP implementation announced…
05-27-2023, 09:51 AM
#151
Gets Weekends Off
Joined APC: Apr 2007
Posts: 4,614
The risk is minimal. The company obligation is covering the shortfall between deposits and current value. They have no obligation for lost gains. Over time, earnings on previous years deposits will cover the spread. The risk is contained mostly to the early years when there aren't historical earnings to cover the loss.
05-27-2023, 09:57 AM
#152
Gets Weekends Off
Joined APC: Mar 2015
Position: stake holder ir.delta.com
Posts: 10,455
With 60% bonds that won't happen. Which is why the company agreed.
05-27-2023, 10:14 AM
#154
Gets Weekends Off
Joined APC: Apr 2007
Posts: 4,614
Assuming LIRKX is the fund, it is down 6% in the last year. The 2022 return was a loss of 15%.
https://www.blackrock.com/us/individ...-portcl-k-fund
There is a HUGE difference between owing a bond fund vs the underlying bond. If you own the bond, you get your interest and stated return. If you own a bond fund, you are subject to fluctuations in valuation based on interest rate movement.
https://www.blackrock.com/us/individ...-portcl-k-fund
There is a HUGE difference between owing a bond fund vs the underlying bond. If you own the bond, you get your interest and stated return. If you own a bond fund, you are subject to fluctuations in valuation based on interest rate movement.
05-27-2023, 10:31 AM
#155
Gets Weekends Off
Joined APC: Dec 2007
Posts: 5,597
Assuming LIRKX is the fund, it is down 6% in the last year. The 2022 return was a loss of 15%.
https://www.blackrock.com/us/individ...-portcl-k-fund
There is a HUGE difference between owing a bond fund vs the underlying bond. If you own the bond, you get your interest and stated return. If you own a bond fund, you are subject to fluctuations in valuation based on interest rate movement.
https://www.blackrock.com/us/individ...-portcl-k-fund
There is a HUGE difference between owing a bond fund vs the underlying bond. If you own the bond, you get your interest and stated return. If you own a bond fund, you are subject to fluctuations in valuation based on interest rate movement.
05-27-2023, 10:33 AM
#156
Gets Weekends Off
Joined APC: Jun 2019
Position: Currently freeloading
Posts: 549
Because that isn't the point of a MBCBP. It's supposed to have the rewards of a defined benefit plan, but with the safety of a defined contribution plan. That means its not intended to be another brokerage type fund, with brokerage type returns (high or low). You're guaranteed not to lose money, but the flip side is that the returns won't be stellar either.
This is from Fidelity:
This is from Fidelity:
IRS rules require that a participant’s total return on their MBCB balance when they take their money out cannot be less than 0% in the aggregate. This does not forbid negative returns in a year, it just means that a participant must at least get the sum of their pay credits out of the plan when they take their money. Many MBCB plans put a cap on annual returns that are credited to participant accounts (e.g., 10%) to address non-discrimination testing and regulatory compliance. A cap has an added bonus of providing some cushion for the plan sponsor against having to pay for the 0% cumulative floor.
05-27-2023, 10:41 AM
#157
Roll’n Thunder
Joined APC: Oct 2009
Position: Pilot
Posts: 3,836
Because that isn't the point of a MBCBP. It's supposed to have the rewards of a defined benefit plan, but with the safety of a defined contribution plan. That means its not intended to be another brokerage type fund, with brokerage type returns (high or low). You're guaranteed not to lose money, but the flip side is that the returns won't be stellar either.
This is from Fidelity:
This is from Fidelity:
05-27-2023, 10:41 AM
#158
Gets Weekends Off
Joined APC: Mar 2015
Position: stake holder ir.delta.com
Posts: 10,455
Save my quote. It won't happen. A fund diversifies the risk enough and treasuries will be fine. The 18-24 month debt ceiling shenanigans are for grandstanding for reelection. Corporate bonds will be converted to equity and sold in a worst case. Rates are increasing over never before lows.
05-27-2023, 12:03 PM
#159
Has a furrowed brow
Joined APC: Dec 2019
Posts: 1,201
As someone who hasn’t had spill retirement paid out as income before…
Let’s say you had 1.5-2 months (6-9 weeks naturally) of excess DC paid out and taxed as income, that money is also eligible for profit sharing, correct?
Let’s say you had 1.5-2 months (6-9 weeks naturally) of excess DC paid out and taxed as income, that money is also eligible for profit sharing, correct?
05-27-2023, 12:30 PM
#160
Roll’n Thunder
Joined APC: Oct 2009
Position: Pilot
Posts: 3,836
No, DC excess, per diem, etc are all excluded from your PS calculation.
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