CitationLover
Aw, Nuts!
- Joined
- Feb 26, 2003
- Posts
- 3,316
The lump sum's no longer available to retirees? Wow. I hadn't seen that.
the 80% funding requirement for lump sum distributions is FEDERAL LAW (Pension Protection Act of 2006).
here is the math for a 30yr AA DB plan payout (using the pay and pension info on airlinepilotcentral.com).
1.25% x FAP x 30 = 37.5% of FAP
at age 60 an appropriate life annuity is about 11.5 (age 65 about 10). so the lump sum will be:
37.5% x FAP x 11.5 = 431.25% of FAP.
if FAP is close to current MD80 CA pay then the LS payout will be about:
431.25% x $161,000 = $694,312.50
at 777 CA pay then its:
431.25% x $205,000 (the current 401(a)(17) comp limit is $230,0000) = $884,062.50
the $2 million dollar figure is either adding in the B plan payout or they worked longer than 30 years. even at 40 years worked the above numbers simply need to be increased by 33% which is still nowhere close to $2 million.
what is the plan definition of AA's lump sum factor?
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