cadetdrivr

From a practical standpoint, yes, it is nearly identical to a 401k although it is technically governed by a different section of the rulebook.

APC225

Separate accounts.

workingforfree

Lets hope things get moving after the new year.

Saying that, Happy New Year to all and best of luck to us trying to get an interview and subsequent job at UAL.

EWRflyr

The 16% is a defined contribution to a "separate" sub-account within your Schwab Plan Account (currently). When you log into your Schwab account you will see both options: 401K and Defined Contribution. You can select each sub-account individually and make elections to the investment choices you want for each portion. All money is owned by you from the moment it is placed in your account.

Pilotgolfer, since you states you weren't positive on the rules, I will clarify that the bold statement above is not entirely correct.

Looking forward, this year the IRS contribution limits by an individual to their 401K plan (either traditional or a Roth 401K version or combination thereof) is $17,500. Along with that is another contribution limit which applies to all contributions made by the employer and employee. For 2013 that limit is $51,000. The combination of those two cannot exceed the $51,000 cap.

So how does that work? If you are a pilot making $200,000 and getting 16% from the company, that equates to $32,000. That's $19,000 below the cap. That DOES NOT, however, mean you can put $19,000 into your 401K plan to get to the total cap. The maximum amount you can contribute to your 401K plan is still $17,500 if you are under age 50. Using $200,000 as the income example from above, you could only elect to contribute 8.75% to your 401K to keep you below the personal limit but still be below the total cap.

In reality, you can elect whatever deferral you wish from 0-100% and as soon as you hit $17,500 into your 401K, payroll will stop taking that money out of your check. (I personally prefer to dollar cost average the entire year so I hit my limit at the end of the year and not sometime a few months earlier.) Since the system will only let you select whole percentages to contribute, in the example above I'd use 9% deferral.

One caveat to all of this above is in reference to being under or over age 50. The IRS allows those who are 50 and older to make "catch-up" contributions in the amount of an additional $5,500 for 2013 (unchanged from 2012). That means someone who is 50+ can contribute $23,000 to their 401K plan if they wish, but the total employer + employee limit remains the same at $51,000.

Hope the clarifies the rules a bit. You had the general idea.

APC225

Nice summary. Thanks. I was wondering if the over 50 meant you could go to $56,500 max. I guess not.

pilotgolfer

EWRflyr,

Thanks for the details. I knew I was close enough for a general explanation. Some day when I'm making that much, I will let my accountant fill me in on the details.

OnMyWay

I hate to say it, but for this very reason, APC needs a "like" button!

IADBLRJ41

So a few more questions:

1. If L-UAL starts recalling prior to the SLI being completed only the 1436 pilots can return to those slots.. (My assumption here is yes)

2. Could UAL hire off the street new hires to fill those slots on A320's etc? If not at what point could UAL open that airplane up to off the street new hires? (my assumption here is after SLI).

Example would be the following:

-CAL continues to fill 2013 classes with the remaining L-UAL Furloughee. Those pilots are assigned 737 or 757 with CAL bases.
-UAL starts recalling for junior A/C (assumption is Airbus). Those recalls must come from the 1436 even if already flying on the CAL. If a L-UAL Furlough is at CAL he could go back to the Airbus at UAL.


Just trying to understand how this all might work out for possible of the street hiring in March-May etc. Thanks

APC225

I think you've got it right. When UAL recalls it has to go through all the furloughs whether they're at LCAL or not. Only after all have been offered can they go to OTS.

Here's a wrinkle for you. If LUAL starts recalling before the SLI and LCAL cannot release some UAL pilots because they can't train their replacements for LCAL flying fast enough, they may have to hold these UAL pilots at LCAL for awhile at which point LUAL may have to hire off the street to fill their needs even before all UAL pilots are back at LUAL. As LCAL releases these UAL pilots back to LUAL over time as it trains off the street hires to backfill LCAL flying the UAL pilots will of course come in on top of the LUAL new hires. The UAL pilots will be pay protected for the LUAL seat/pay they could hold at time of recall even if they are still at LCAL. A similar situation happened with Expressjet and CAL on the 1990s.

I think the SLI will be done before this situation arises so it probably won't happen.

IADBLRJ41

Thank you for your response. Hopefully, those who want to come back can do so ASAP and those who want to get hired (me) will get called.

Again thanks