USMCFDX

This is absolutely not what I am 100% opposed too the 'pancake plan". There are many reasons to not want his plan on the property and they do not include your assumption.

Unfortunately I have no doubt that the negotiating committee is going full forward with the "pancake plan" and the only way we will be able to tell them no is by voting down the TA two years form now.

TransWorld

I prefer Waffles or French Toast for breakfast. But then again, that is just me. 🤣

TonyC

Probably not the best thread to debate the PSPP, but since you brought it up ...


The Pilot Stabilized Pension Plan as described to the membership in numerous meetings, podcasts, and videos, is NOT a Cash Balance Plan. It is not a defined benefit plan, either. It is a Variable Benefit Plan, and that's the very name that was used until it was determined pilots have a problem with the variable part.

Referring to the article which you linked in your post,

With the Variable Bene ... umm, Pilots Stabilized Pension Plan, the investment risk is NOT borne by the employer. Increases and decreases in the value of the plan's investments in fact DO affect the benefit that the participant will receive, Nothing is promised to the participant other than a floor and a ceiling.

FedEx would be responsible for only two things. First, FedEx would be responsible for contributing a percentage of the pilot's annual earnings each year. Second, FedEx would be responsible for maintaining a certain level of surplus which could be tapped when the fund performs under the floor. Whenever the fund performs above the ceiling, that extra would be added to the surplus, so once a minimum level is reached, FedEx might never have to contribute to it again.


True, but irrelevant. The PSPP, a type of Variable Benefit Plan, is not a Cash Balance pension.


DC limits apply because it's a Defined Contribution plan. Think about that for a second -- mull it over. A Cash Balance Plan is a type of Defined Benefit Plan. The PSPP is not.

Once you've chewed on that for a minute, let's talk about that annual contribution to the plan. The percentage of the pilot's compensation for the year goes into the PSPP fund not as dollars, but as shares. The Cheiron rep called those shares pancakes. The value of a pancake is determined by the performance of the fund, and the number of pancakes the pilot accrues is the defined percentage of compensation (up to the annual limit) DIVIDED BY the value of a pancake. He doesn't accrue an increment of his retirement benefit measured in dollars -- he accrues shares, or pancakes.

For every year thereafter, he continues to accrue pancakes in that same manner. When the fund does well, the value of pancakes will rise, and he will accumulate fewer pancakes for the same amount of dollars. When the fund does poorly, he will accumulate more pancakes for the same amount of dollars. When the fund does very poorly, as in below the floor, he will accumulate fewer pancakes for the same amount of dollars than he would have without the floor, because the floor will artificially inflate the value of the pancakes. If the market does very, very good, as in above the ceiling, the gains will go to the surplus that is intended to protect for the times when the performance is below the floor.

Each year the pilot will accrue pancakes, and each year the value of a single pancake (and every pancake) may go up or down. The pilot's retirement benefit will not be known until the year he retires, at which point all of the pancakes he has accrued will be worth the value of a pancake THAT YEAR. A pilot may have witnessed many, many years of growing markets good fund performance, but if he retires in a year that the pancake value is down, that will affect the value of each and every pancake he has accrued. Ultimately, he will not be able to determine the value of his retirement benefit until that last year rolls around. Thus the title -- Variable Benefit Plan.



INCORRECT. The dollars you refer to are determined by the percentage of the pilot's earnings. Those dollar values are not preserved in any way. Every year they are converted to pancakes (at the going rate for pancakes), and at retirement the pancakes are converted back to dollars, at the pancake rate for that year.

It's not just "as great", it's a completely different methodology. Some people confuse the floor percentage with the 2% of our "A" Plan formula. They are two completely different animals. A year of service under our current plan earns 2% of the pilot's "High Five" years -- the Final Average Earnings -- regardless of how much the pilot works. The number used in calculating a pilot's single year contribution to the Variable Bene ... umm, there I go again, Pilots Stabilized Pension Plan. Under our "A" Plan, the pilot is free to work as much or as little as he chooses. He can choose quality of life over working his fingers to the bone. He can take vacation and watch his daughter get married, or hike the Appalachian trail with his wife or his son. Work a little, or work a lot, he still earns a year of service, and that increases his retirement benefit by another 2%.

Under the PSPP, the more he works, the greater his retirement benefit. That is antithetical to the fundamental goal of a labor union in general, and our negotiating goals specifically. FedEx wants us to work more for less. Our union should want us to work less for more. And specific to retirement benefits, our union should not be pushing for features that encourage pilots to continue to work beyond the normal retirement age.

I think you have that backwards. Proponents of the Variable ... Pilots Stabilized Pension Plan emphasize the risk of The Company's demise. Since The Company is on the hook to pay our Defined Benefit, they want us to believe The Company will declare bankruptcy or be bought out by Amazon, and our "A" Plan will be destroyed. They serve up the PSPP as the solution, arguing that even if any of those scenarios occur, the PSPP will be safe.

I think -- granted, it's just my opinion -- our future is pretty secure. Furthermore, I don't envision a scenario where both the "A" Plan and the PSPP will be protected by the PBGC.

We do agree on this point. And I might point out that your "OR" statement would provide the 50% pension for a 15-year widebody Captain flying 1,000 Credit Hours a year and enjoying his vacation. Like the $260K CBA FAE limit of 1998 was technically a limit, but not practically a limit, a $460K limit would leave a little room for that 15-year widebody Captain to exceed a "normal" schedule and still see 50% income replacement in retirement.







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Spectre186

Is there any kind of studying I can do while I wait for BI? Mil fighter background with no 121/135 experience.

USMCFDX

You will be fine - enjoy your free time until you start. Welcome aboard!

kronan

First, I did not bring it up.
2nd- the PSPP is not a Defined Contribution plan. It is a Pension Plan. Defined Contribution plans are plans where the assets are owned by individuals, and I’d like to think we’d both agree that the theoretical PSPP did not consist of assets owned by individuals, but rather was still composed of assets held in Trust and managed by various entities hired by FedEx. (Of note-if you gain access to FB’s retirement website you will learn that the managers of our Pension Trust have performed awesomely over time)

2nd. Design was for a contribution value based on earnings accumulated yearly. The final pension payment was designed to be the greater of the end value of your notional shares, or the year by year addition of your 2% notional contribution, thus the “Floor” part.

see 24:30 as the beginning part of the video you pseudo referenced.

Additional comments to come.


https://www.irs.gov/retirement-plans...ee/definitions

https://youtu.be/LvjGtv6POFM

FrankTheTank

Just get the LMS done ASAP otherwise do nothing. I have done 5 training cycles and trust me the LMS is time consuming. Luckily for me, one more cycle to go and I’m done until I retire.

Spectre186

Thanks for all the great guidance. One more question for any mil reservists:

It looks like my 2 weeks of Annual Training might conflict with my BI dates. (I don't have a firm date yet). If it does conflict, what would you all recommend? Either I take the first BI date given and possibly take a bad year, or delay my BI 1 to 2 classes to complete my AT.

I'm definitely leaning towards taking a bad year and prioritizing getting on property ASAP, but curious what other opinions were out there.

Sluggo_63

Not even a question. Come to BI.

Hank Burley

Simple, Reschedule your AT days.