Moneybags

The pension creates singular dependency on your employer for not only your career income, but also 15-30 years into retirement. I’m shocked at the amount of pilots who think it is guaranteed. Almost like they are willfully ignorant of the history of pensions, particularly at other airlines.

JustInFacts

You do know that the pension funds are seperate from the company funds. They aren't in this pot of money that the company can tap at any point. As long as the pension is funded properly, the company could go out of business and you would still get the pension benefits that you earned.

BoilerUP

"Other airlines" lost their defined benefit pensions in bankruptcy court.

Never say never, but does anybody think FDX would enter bankruptcy without global circumstances resulting in a MASSIVE percentage reduction in the SP500 or DJI?

Also, it isn't an either/or proposition for FDX like it was in the early aughts for pax carriers - FDX has both a DB & DC retirement. From the outside looking in (yeah, I know) why would anybody desire less retirement income diversification?

BlueMoon

Not only that, The legacy airline pensions were so underfunded and their financial position so poor they made the case to the court they couldn’t continue it.

why it was underfunded is of more concern. Well turns out letting retirees take a giant lump sum out when they retire really f’s your pension assets when the market is down. It’s not a smart option to allow if you want a stable plan.

Delta’s pension was only 39% funded when it was terminated. Thanks in large part to the lump sum option and the run to exits prior to bankruptcy.

United plan was 49% funded when terminated.

we are no where close to that. Granted the stock market is on steroids at the moment and probably needs to come back to earth at some point, but the company is profitable and making money.

Anomjnom12

nah the pension isn't gonna go anywhere as it is, but if some where relying on it being bumped before they retire it makes me scratch my head.

Stan446

You are kidding, right? Our pension is guarenteed by the PBGC. And since the new laws regarding pension funding require the company to fund it, it costs the company money for any increase hence the reluctance to increase the pension. At least educate yourself on whats involved in pension funding.

Moneybags

"The pension is guaranteed."
What amount is it guaranteed at? According to the PBGC website, at age 60, it's $4,620 a month, that's $55k a year. At age 50, it's $2,487, that's $29,844 a year. That is all you're guaranteed.

What happens if you die before retiring? Your spouse gets 50% of your accrued pension. The other 50% stays with the company. Poof, all that hard work, gone. In a 401k or MBCBP, your spouse/beneficiaries would get all the money.

What happens to new hires that choose to leave the company before 5 years? They don't get a dime of their pension. That's ~$50k to 100k lump sum they're missing out on transferring if they had an all DC plan.

"But the pension is fully funded!"
This only means if the plan ends today, everyone should get their accrued benefit. It has nothing to do with funding levels 20 years from now. A ton of things like interest rates and market returns, as well as business performance could change that. Again, all you are guaranteed is the PBGC minimums.

Stan446

You do know what vesting is, right? And if you aren't vested, it doesn't matter when you leave, you get nothing. And you have pointed out that the pension is guarenteed, maybe not for the full pension benefit but it still is. Delta guys who retired got their pension terminated, won't happen here. And you can pick survivor benefits up to 75%, maybe you don't know everything about our pension. You can also take a lump sump. There's many options.

Merle Haggard

Their pension fund included mechanics, flight attendants, rampers, gate agents, etc in addition to the pilots - in other words almost every employee. Much different situation at FDX. Additionally, PBGC limits either came close to or made the non-pilot employee groups whole.

The situation is different, the laws are different and this is truly apples and oranges. That said, I would never put it past FDX's standing army of lawyers and lobbyists to find and try yet undiscovered tactics.

Moneybags

Why do you think I mentioned 5 years? I.e. the vesting period for the pension. A 401k doesn't have a vesting period.

Don't say the pension is guaranteed when it's not even half the value that it's worth.

And the arrogance to think a plan termination could never happen here is astounding. What you should say is "it's unlikely during the time period I might retire".

There is only the 50% survivor option if you die before retiring.

Go read the pilot benefit book. There is not a true lump sum option (unless your pension is worth almost nothing). What you're suggesting is leaving a lump sum to a beneficiary. But it's reduced by any pension payments you receive. So it's only worth anything if you die early in retirement.

I know I don't know everything about it. But it's obvious I know more than you.

Last I checked there was almost 200k plan participants in our pension fund. Most of whom are not pilots.