Buck Rogers

Because I don't want UAL pilots to sell themselves short.........following is a quote from the Delta MEC Contract Awareness Bulletin 14-01 21 Jan 2014........... kinda long , but salient point is in red at bottom. SUNVOX is doing you a disservice every time he repeats anything about the DC contribution being "backed out". THE DC CONTRIBUTION IS ADDITIVE!!

"Profit Sharing Payout Calculations The Profit Sharing Plan is based upon the Company’s “Pre-tax income” (PTIX) for the calendar year. Section 2 A. 207. of the PWA defines PTIX to mean:

For any calendar year, the Company’s consolidated pretax income calculated in accordance with Generally Accepted Accounting Principles in the United States and as reported in the Company’s public securities filings but excluding: a) all asset write downs related to long term assets b) gains or losses with respect to employee equity securities c) gains or losses with respect to extraordinary, one-time or non-recurring events (including without limitation one-time transition or integration costs incurred in connection with the merger of the Company and Northwest Airlines Corporation during the two year period following the merger), and d) expense accrued with respect to the profit sharing plan

In layman’s terms, the Profit Sharing Plan uses pre-tax income as a trigger for determining payouts. It restricts the write offs that might otherwise reduce the PTIX metric resulting in a “clean,” not easily manipulated, dollar value from which to determine profit sharing payouts. Also, because the cost of the Profit Sharing Plan itself and other incentive plans are added back when calculating PTIX, the formula provides a higher level of PTIX than most profit sharing formulas.

To ensure transparency within the Company accounting process regarding profit sharing, the PWA puts in place a “trust but verify” process. A review of Delta’s business plan, performance, earnings and expenditures is made available to ALPA at regular intervals. ALPA additionally reviews with the Company the methodology and calculation of employee awards prior to such awards.

Total Employee Payout Calculation Profit Sharing begins at the first dollar of PTIX. The total amount of profit sharing paid out to all employees is based upon the percentage of total PTIX for the year.The total employee Profit Sharing pool is funded by 10 percent of the first $2.5 billion of PTIX for the year, and 20 percent of any PTIX for the year over $2.5 billion.

Individual Pilot Payout Calculation and Award To determine an individual pilot’s profit sharing payout, we need to know his annual compensation in the year in which the PTIX was earned, the total annual compensation for that year for all eligible employees, and the total profit sharing amount. We then divide the pilot’s eligible annual compensation by the eligible annual compensation of all profit sharing participants, and then multiply that by the total profit sharing amount available. The result is the pilot’s individual profit sharing amount. Put in simpler terms, every pilot will receive a pro rata amount of the total profit sharing pool based on his annual compensation in the year PTIX was earned.

For example, assume Delta earned a PTIX of $1.5 billion. Delta would provide eligible employees a total profit sharing of $150 million ($1.5 B x 10% = $150 million). Also assume that the total annual compensation for all eligible employees was $3.75B, and that the pilot’s individual annual compensation was $100,000. To determine the percentage of profit sharing for that pilot, divide his individual annual compensation by the total annual compensation ($100,000 / $3.75B = .00002666667). To determine his personal profit sharing payout, multiply this number by the total profit sharing amount (.00002666667 x $150 million = $4000).

Note: When you see the final announcement of the profit sharing amount, it will be in the form of a percentage of your annual compensation. In this example, the pilot would receive 4 percent of his total annual compensation in the form of profit sharing. As a reminder, the profit sharing is 20% of the amount exceeding $2.5 billion PTIX.

Profit Sharing Plan payouts are treated as ordinary compensation; all Federal, State and local taxes, FICA taxes, ALPA dues and DPMA dues will be withheld. You will also be able to make a special election through Fidelity’s NetBenefits® website to contribute some or all of your Profit Sharing payment to your Delta 401(k) Plan.

You may defer as much as 100 percent of your Profit Sharing payment into the Delta 401(k) Plan. Elections must be made by tomorrow, January 22, 2014 at 4 pm EST, to take effect for the February 14, 2014 Profit Sharing payment. You will be able to make an election to contribute from 0 percent to 100 percent in increments of 1 percent of the Profit Sharing payment through Pre-tax, After-tax, Roth 401(k), Catch-up Contributions and/or Roth Catch- Up Contributions (Catch up Contributions only apply if you are age 50 or older in 2014). After this deadline, the special election window will close. To elect a 401(k) contribution amount specific to your Profit Sharing payment, simply go to NetBenefits at www.netbenefits.com, click on the Delta Pilots Savings Plan, Contribution Amount, then scroll to the section near the end for Profit Sharing elections. You will then enter the percentage of your Profit Sharing payment you’d like to contribute to your retirement accounts. You may also contact the Delta Service Center at Fidelity 1-800-554- 0262 to make your elections or to get answers to any questions you may have. NOTE: For pilots wishing to defer some or all of the February profit sharing payment into the Delta Pilots Savings Plan be aware that the screens on the Fidelity website may be slightly confusing. The profit sharing line of the contributions screen is pre- populated with a “0%.” If you wish for it to remain at “0%” for the profit sharing payment, you must select the "Change Contribution Amount" button and receive a confirmation number or the system will later default to your election currently on file for regular paychecks. If you wish to have a deferral other than your current election, you need to enter that percentage and again save the election for it to become active.

Defined Contribution Profit Sharing Payment. Since Profit Sharing Plan payouts are pensionable, a pilot will ALSO receive a 15% employer contribution to the Delta Pilots Savings Plan based on his profit sharing payout."...


PSA for your negotiations

BTW....(was 15% back in 2014, now 16% match, eventually going to 18% with approval of TA)

idlethrust

Im convinced my 12 year old neice could negotiate a better contract than our union .

ThumbsUp

Someone can correct me if I'm wrong, but the best we could reasonably do on a contractual basis is to include a DC on top and rope in those under a year (which would dilute non-new hires) if that's even possible under the company's profit sharing plan. Those both seem like pretty good gains to me. The remainder of the aspects are not negotiable under our contract alone as they are defined in the company plan that affects all work groups. The specifics of the company plan aren't that easy to find, though, other than the 6.9% threshold which affects everyone. I just don't see a company-wide change holding up our contract.

Sunvox

Wow.

Okay, but you really didn't need to post all the gibberish in the middle. All you needed to say was "this information from our Union from 2014 indicates Sunvox is not correct". All I can say is that I am merely repeating what was told to me by an UAL-ALPA rep. If that information is wrong then I apologize for spreading false information, but it doesn't change the discussion immeasurably. We all agree, including myself, that UAL pilots would like to do better with regards to Profit Sharing, but there is significant misunderstanding still about the basics of how the pool is calculated.

jerryleber

Please tell this rep that he/she misunderstands the essential elements of the Delta PS and to please figure it out ASAP if they are still doing ALPA work.

Is that person a rep or on the NC as you previously stated?

m3113n1a1

Delta DC is additive.

But disregarding that, common sense tells you that a fixed dollar amount being the trigger for profit sharing works out much better over time due to inflation than a percentage. Over time 2.5 billion is going to become less and less a percentage of total revenue. 6.9% (or whatever the trigger is) is always going to be 6.9%.

Buck Rogers

Well....since I have posted here to you 3 separate times that you are incorrect.....AND you went to an ivy league school AND you have an accounting degree(this is you?...maybe I'm wrong here)....I felt you needed some proof. Others have asked for language also.
Since I'm a cliff notes kinda guy....I stated up front in red and put the salient point in red at end.

I am frustrated with you because you seem pretty cavalier in your misinformation. Once something is stated as incontrovertible that DC is backed out(like you did several times).....it takes a lot of corrections to get people to see the light.

I know it tough when somebody tells you that your baby is almost as cute as another's....but it's painful to be told your baby is downright homely.

You guys have a homely baby and getting the DC on profit sharing should be an easy get......so long as people see the light and refuse to be swayed by ignorant information.

BTW...the DC is measurable, not a "pip" as you still try to lead some to believe. For me, the best year of PS, the DC alone was 15K. We are talking SUBSTANTIAL sums of money across the seniority spectrum.

jerryleber

Perfectly said, "pretty cavalier in your misinformation." There seems to have no feedback loop. He is worried we are trying to get too much in our contract negotiations if you can believe it in the wake of the Tumi TA.

ThumbsUp

Most of the examples in this thread don’t even understand how our profit sharing works to include Sunvox’s example of 690 million vs 750 million. The 6.9% is a threshold relating to pre-tax profit MARGIN. I say again MARGIN. It is not multiplied by any number to drive our profit sharing pool. The impact of inflation on that number is basically meaningless as it could work to our favor in some years and against it in others. The only benefit of a solid number is making it easier for a layman to understand.

jerryleber

6.9% margin = $2.5B at $36B in revenue. Above $36B in revenue the Delta formula is better. UAL's 2022 revenue was $43B and as inflation and growth increase that number Delta's formula further outpaces United's formula. Simple math.