Age 60 informal poll

[Flopgut]

If nothing else, I'm sure it will receive the full support of airline management.

Just think! In 15 or 20 years, when you and all your age-60 peers are working for 50K, you can tell them, "Yea, that was my idea!"

The majority of pilots will be allright with it. I know that's a problem for you because you and Klako are hoping for personal windfalls.

Why do you both have a problem with majority rule?

 

[Klako]

Right. So I should have to pay for this?

“Paying for” should not be the consequence for something that should never have been. Wait your turn for promotion just like in every other profession.

 

[atafan]

Why don't you become an air traffic controller? Oh, that's right, you have to be younger than 31 to start, with a mandatory retirement age of 56. Crap! Hope you're going to change that one, too.

How about serving your community as a policeman or fireman? Retirement at 55 there too?

Guaranteed pensions, something most don't have. If I could retire at 55 with a healthy pension I'd do it as soon as possible.

It's all about the almighty buck!

 

[Whistlin' Dan]

The majority of pilots will be allright with it. I know that's a problem for you because you and Klako are hoping for personal windfalls.

Why do you both have a problem with majority rule?

I don't have a problem with "majority rule" per se, but when one group stands to benefit directly from a rule change at the expense of another, "majority rule" becomes divisive. And that is exactly what airline managers would like to see among their labor organizations...one group at odds with another.

One of the first rules any prospective business manager learns is that when dealing with organized labor, "Divide and Conquer" whenever possible. If you can convince the guys on the bottom half of the seniority list that their interests are markedly different from those on the top half, and that their lot in life would be so much better if only those money-grubbing senior guys weren't taking it all, you've begun the process. One way of doing that is to propose changes to the labor contract that would benefit somewhat 60% of the group at the expense of the other 40%, and try to get them to put it to a vote. (A true "union" would never allow it to go to a vote, but an "Association" often will. Guess which one ALPA is?)

Assuming it passes...even if the overall cost to the company remains the same, management wins, because they've created chaos and division between labor groups whose goals should be one and the same.

Look at some of the cr*p that's going on between Atlas/Polar, and what DHL is trying to do with ASTAR and ABX. Especially between ASTAR and ABX, because that is what will ultimately set the pace for ALL cargo flying (including "Brown" and "Purple") for the next 20 years.

I don't know how many pilots will be able to work past 60 even if the rule were rescinded. I suspect that at most, 7-10% of the seniority list will be past that age at any given time. I hate to think that 51% of our members would be willing to vote 10% of our members out of a job just to line their own pockets, but it's becoming increasingly obvious to me that they would.

This is one time that I'm da*m glad that ALPA doesn't have enough pull in Washington to prevent a law from being changed...

 

[Draginass]

I hate to think that 51% of our members would be willing to vote 10% of our members out of a job just to line their own pockets, but it's becoming increasingly obvious to me that they would.

Hmmmm. . . . 51% of the senior guys voted me and a bunch more junior guys out of a job at my major airline, then have gone-on to fly as much overtime as possible . . "lining their pockets."

What ya say about that?

 

[Whistlin' Dan]

Hmmmm. . . . 51% of the senior guys voted me and a bunch more junior guys out of a job at my major airline, then have gone-on to fly as much overtime as possible . . "lining their pockets."

What ya say about that?

I'd say, "Go back and read the last sentence of my second-to-last paragraph."

WE are our own worst enemies. If this thread were about how senior guys are alienating their junior counterparts and sowing the seeds of division in the ranks by permitting that kind of stuff, I would have addressed it.

Back in the early 70's, there was a cartoon in "Stars and Stripes," a military newspaper. It was an aerial view of a boot camp, with quonset huts, etc., and a rough old Drill Sergaent addressing a bunch of new recruits. He was saying something to the effect of..."Any time one of you pansies thinks he can kick my b*utt, I'll meet you behind the quonset hut!"

Behind the quonset hut, one could see a bunch of street-toughs in civilian clothes, all rolling up their sleeves and readying clubs and a blanket.

If "we" as a profession ever start acting less like Boy Scouts and more like a real Union, some of our problems will go away.

 

[Flopgut]

Well Dan, tell me how your going to be the bigger person here, meet me half way. How do you keep working and not flatspot my earnings? You preach about union stuff, how do I avoid resenting the crap out you when you get to stay near the top for 5 more years? No real union member, and no real union would accept a new working reality and not want to see the proceeds go more evenly.

 

[Klako]

No real union member, and no real union would accept a new working reality and not want to see the proceeds go more evenly.

I believe that here are only two organized labor unions that now oppose a change to the “Age 60 Rule”, ALPA and APA. This begs the question, what legitimate labor union would actively support a rule that discriminates against its own members, forces them to leave their workplaces and leaves them with reduced benefits?

 

[Whistlin' Dan]

Well Dan, tell me how your going to be the bigger person here, meet me half way. How do you keep working and not flatspot my earnings? You preach about union stuff, how do I avoid resenting the crap out you when you get to stay near the top for 5 more years? No real union member, and no real union would accept a new working reality and not want to see the proceeds go more evenly.

You seem to be implying that because I was hired before you, I'm somehow "flatspotting" your earnings.

How is that any different from the "flatspotting" you're doing to other guys by holding on to your seat? Would you consider taking a LOA, so that some of the guys under you could move up more quickly?

Look at the pay rates at your own airline. If you're an ALPA carrier, you're probably paying your Captains $60-$80/hr more than your F/O's. That discrepancy alone probably has more effect on your career earnings than raising the retirement age would. Personally, I would have no problem closing the gap on seat pay, even if it does "flatspot" Captain's earnings (including my own) to some extent.

 

[Flopgut]

Dan, You spin eloquently about unity and brotherhood, but do you ever consider that because the majority of your union brothers want you gone at 60, that maybe the best thing for the craft is for you to be gone at 60? you are not characterizing or observing this problem correctly at all, you ARE the problem. There are NO career expectations past age 60 in this gig, if you want to stay, it's the same difference as. you want to be a replacement worker. Best thing for this profession is for retirements to remain 60 years old.

 

[Whistlin' Dan]

Dan, You spin eloquently about unity and brotherhood, but do you ever consider that because the majority of your union brothers want you gone at 60, that maybe the best thing for the craft is for you to be gone at 60?

The best thing for the craft, or the best thing for you, personally? And are we talking about pilots here, or terrorists? Because from your tone, you sound less like a professional, and more like the Ku Klux Klan.

Maybe I oughtta fetch up de wife and chillun's and gets to gettin' outta 'dis ol' town. It sounds like dem brotha's is fixin' to ride on my a$$ tonight. Dey's plannin' to run ol' Dan off'n his farm, take his land and his mule fo' dey selves...

You are correct, I DO believe in unity and brotherhood among pilots. But I also believe that "rank has it's priviliges," and that the seniority system, in which "rank" is conferred largely by date-of-hire, is the best one for our profession. Therefore, I would NOT expect that anybody in your pilot group senior to you would forego a system bid, upgrade, or opportunity to work, simply to accelerate your advancement to the left seat. I would further expect that when you are a senior crewmember, you will not forego any of those things for junior crewmembers, either.

There are NO career expectations past 60 in this gig...

That might have been true at one time, but that is no longer the case. Many of us DO have career expectations that extend beyond 60. The proposal to change the rule has been bandied about for at least 15 years that I'm aware of. Weren't you paying attention? You knew (or should have known) that a change was in the works. If your argument is that I "took the job knowing that 60 was the mandatory retirement age," then I would counter by saying that you took the job knowing that it would likely be raised to 65 during the course of your career.

The argument is a wash, at best.

But since this discussion is about "expectations" (both yours and mine), allow me summarize what mine are. I expect them (as I have for the last 10 years) to raise the retirement age to 65. I expect most current flight crewmembers to stay in their seats for as many of those additional years as possible. I expect that will slow progression to the left seat for junior crewmembers somewhat, but I further expect that they will recoup that loss (and more) in the last 5 years of their career.

There! Now that you've been officially informed of what you can "expect," you have a decision to make. If you feel that the forthcoming changes to the retirement age are going to make this profession untenable for you, this would be an excellent time to leave it. You can cash in your 401K, and buy a Kinko's franchise. Spend your "Golden Years" nursing paper cuts, cleaning up ink spills, unjamming copy machines, unclogging toilets, and b*tching about life in general.

Or, you can fly and b*tch.

It's a "no-brainer," as far as I'm concerned...

 

[Klako]

Dan, You spin eloquently about unity and brotherhood, but do you ever consider that because the majority of your union brothers want you gone at 60, that maybe the best thing for the craft is for you to be gone at 60? you are not characterizing or observing this problem correctly at all, you ARE the problem. There are NO career expectations past age 60 in this gig, if you want to stay, it's the same difference as. you want to be a replacement worker. Best thing for this profession is for retirements to remain 60 years old.

The former ALPA president Henry Duffy said, "Pilots over age 55 comprise only 5–6 percent of the total membership. The other 95 percent selfishly view the forced retirement of older pilots as their guaranteed path and a God-given right to their own early promotion."

This is a political issue smelling of greed and selfishness. ALPA and APA have been milking the “Age 60 rule” for all it’s worth for much to long a time. It is high time that the Congress takes the upper hand and puts the FAA and junior ALPA pilots on the right track.

 

[Klako]

"Anyone who embarks upon a career path with the expectation of a 30 year uninterrupted career with good pay, good working conditions and a good retirement needs to check their expectations." Unfortunately, this logic only goes half the distance. If they see the pitfalls ahead, why do they intentionally burn the bridge that could facilitate a crossing? Is this another case of decision making without benefit of empirical data? Ladies and gentlemen, what ever you decide about the age 60 rule, you might want to reconsider the commitment of yourself to a course of action that reduces your credibility, depends upon the age 60 rule to save you from the incompetent, supports arbitrary restrictions upon your career options, burns a bridge ahead of you or sacrifices long term objectives for the tyranny of the urgent.--- From a letter published in the UAL MEC magazine "Leading Edge", SO John Houser (UAL) brings forth some compelling reasons why FAR 121.383c (age 60 rule) should be abolished.​

 

[Klako]

The following unions and pilot employee groups have gone on record that they support a change the Age 60 Rule:

SOUTHWEST AIRLINES PILOTS ASSOCIATION (Independent)
JET BLUE (Independent)
AMERICAN TRANS AIR/ATA (ALPA Master Executive Council)
AMERICA WEST MEC (ALPA Master Executive Council)
SPIRIT (ALPA Master Executive Council)
CONTINENTAL (ALPA Local Executive Councils of Houston and Newark)
US AIRWAYS (ALPA Local Executive Council of Philadelphia)
IBT Teamsters Airline Division


In 1968 this was ALPA’s official stance on the Age 60 Rule:

“ALPA CONTNUES OPPOSITION TO AGE 60 RETIREMENT RULE . The Air Line Pilots Association strongly advocates that the Federal Air Regulation in its arbitrary age 60 retirement provision is unreasonably discriminating against all of the air line pilots. Shortening a pilots career with no realistic justification is cheating the public as well as the industry. ALPA has expended and continues to expend its utmost efforts in attempting to overcome this highly dissatisfying and unfair federal regulation.”


Sadly, ALPA turned traitor to it’s senior members after supporting a change in the rule for over twenty years. ALPA has now institutionalized age discrimination through an accelerated job advancement scheme for its junior pilots.
One would have to beg answers these questions:
When did younger pilots became more valuable than experienced pilots?
Why would ALPA, a labor union, actively support a rule that discriminates against its own members, forces them to leave their workplaces and leaves them with reduced benefits?

 

[Flopgut]

deleted

 

[Flopgut]

deleted

 

[§kyye Candy]

you might want to reconsider the commitment of yourself to a course of action that reduces your credibility, depends upon the age 60 rule to save you from the incompetent, supports arbitrary restrictions upon your career options, burns a bridge ahead of you or sacrifices long term objectives for the tyranny of the urgent.--- From a letter published in the UAL MEC magazine "Leading Edge", SO John Houser (UAL) brings forth some compelling reasons why FAR 121.383c (age 60 rule) should be abolished.​

So let me get this straight... not only do the contracts negotiated in recent years (at most carriers) no longer support an even mediocre lifestyle that is better than that of the regulatory minimums imposed on employers by each state for benefits and work rules, but airline industry management teams are working to basically abolish legacy carriers as we have known them (pssst - that's you guys out there who want to work longer) and replace them with the "new and improved" variety airlines that push the envelope of work rules to the FAR mins AND have basically zero scope limitations... and then replace the pilot group - the "You're lucky to have a job, jr - shut up and fly!" mentality - and the argument we want to hand them as the economy spools up (eventually) in the next phase of negotiations is, "But... you guys now have 5 more years to make up the difference! That's why we increased your retirement rule!"

So now we can work MORE HOURS, MORE days away from home, 5 MORE YEARS of our lives working instead of living (finally) - because we can't afford to retire at 60 anymore, EARN LESS per year on average due to lack of seat progression, take HUGE cuts in compensation/benefits, have ZERO RETIREMENT (except what we provide for on our own) AND give them a reason to justify it all in the name of doing us all some sort of so-called favor? Fantastic.

 

[Klako]

So let me get you straight, then you favor institutionalized age discrimination through an accelerated job advancement scheme for junior pilots.

 

[§kyye Candy]

um, no...

So let me get you straight, then you favor institutionalized age discrimination through an accelerated job advancement scheme for junior pilots.

I favor a system that offers an opportunity for success to EVERYONE equally and one that doesn't change the rules mid-stream to favor a particular age group that has already had their shot. No offense.

Considering the recent and current economic environment and lack of available jobs for many QUALIFIED candidates, it takes some serious balls to use the term "escalated job advancement scheme." Wouldn't some of those "junior pilots" be people who lost out on living the dream in the first place and got spanked out of their "Leading Industry Contracts?"

That's not even a logical argument.

What I am arguing for is MORE instead of LESS - all the way around - period. For everyone. If you could earn the same amount of money (or more) flying for 30 years instead of 35, wouldn't you rather do that? And then, hey - look at that - there's still an option out there for those who want to continue flying, whatever the reason - Corporate flying. Seems to me that to extend the time of service while decreasing lifestyle, benefits and TOTAL compensation package in all is more of a management style solution. Power to the shareholders, I guess. I am more interested in living a good quality life - and in having a real one post-career!

Oh, and by the way - is it just me, or doesn't anyone get that the true "greed" factor here would be in extending the retirement age for the select group who is currently senior? After all, if you are talking about fairness and equity, let's be realistic about who got the better end of the industry spoils. Seems like the pot calling the kettle black.

 

[Klako]

I have the perfect solution for junior airline pilots out there who say that a change to the age 60 rule would be unfair to them by slowing upgrades and causing seniority list stagnation. I say then, make it mandatory for ALL airline pilots to retire after serving no more than 20 years with a company or age 65 whichever comes first. If you hire on with a company at age 25, then you are kicked out of the cockpit when you turn age 45 or if you hire on at 45, you retire at 65. That would be equally fair to both Greybeard and Whippersnapper by giving everyone just enough time to build their 401K with enough to survive on in retirement. Of course, my solution would never fly and only suggests the real motive behind the militant junior pilots at ALPA and APA opposing a change to the age 60 rule and that is age discrimination, nothing more and nothing less.

 

[Whistlin' Dan]

I favor a system that offers an opportunity for success to EVERYONE equally and one that doesn't change the rules mid-stream to favor a particular age group that has already had their shot.

Then the rules can never be changed, because no matter when you change them, it's going to be "mid-stream" for everybody on the seniority list.

Don't forget that this set of "rules" that we all live by, and which you seem so reluctant to change, cover far more than just the age at which we must retire. Your CBA is one set of "rules." So is your Employee Handbook, GOM, FAR's, and even the city, state, and federal ordinances under which we operate. ALL come under constant scrutiny, ALL are changed on a daily basis, and ALL have some bearing on our income and QOL. Those changes do not always favor each and every individual, but generally, they act towards the betterment of the system, and to those who work under it, as a whole.

When the current retirement age was adopted, it forced a lot of guys out of the cockpit at 60 who had counted on working to the age of 65..."mid-stream," as you put it. They got gyped out of 5 years of productivity then, and we're just asking for it back now. Think of it as a "corrective action." And if the first batch of guys to benefit from this change owe anything to anybody, it's not to you junior guys...it's to the ones who retired ahead of us, thus providing us an opportunity to move up.

Keeping a "bad policy" in effect so as not to offend a certain demographic is never "good policy." Who knows...once this "age 60" thing is gone, maybe "affirmative action" will be next on the list of rules we could all live without...

 

[Flopgut]

Dan:

You missed the "equally" part.

You attach your arguement to that of a larger issue attempting to give your arguement more credibility. This is nothing like affirmative action. This IS an issue which happens to affect our working reality and is polarizing. Many who stand to benefit the most get excited and nothing else matters but themselves. Look at Klako: His "plan B" of working 20 years then quitting appeals to him because it helps him. He'll take anything so long as it benefits his own interests. As a union, as individual union members, we cannot feed that sort of greed imperative. We have to let the majority speak for us. We react to whatever is dealt us, but as a union we must strive for consistency and evennes. Normal, and predictable retirement progression is no less important than DOH in this business, to artificially adjust either requires careful consideration.

I would like to see some sort of compromise at this time. But I'm genuinely concerned about what the age change contingent will want next. If we let you guys work to 65 and forgo seniority progression wholsale, it's a bad thing. Plus, in less than 3 years after the change, the whole argument will start up again! You all will want 66, then 68, then till you get too sick; It'll be the same old arguement, Klako wont be ready and you will be equating your retirement to all forms of discrimination. You have to retire someday.

*Look, let's keep our discussion civil OK? Your post #311 was dispicable. I'm not nearly as angered about this discussion as you might think so keep it mellow.

 

[Klako]

I favor a system that offers an opportunity for success to EVERYONE equally and one that doesn't change the rules mid-stream to favor a particular age group that has already had their shot.

Talking about “changing the rules in mid stream”. When I first chose to work at my present airline job in 1989, we were at that time a very stable Part 153 carrier and I felt very secure that I could continue flying in that job until retiring at age 65. Then in 1995 the FAA forced us to convert to Part 121, destroying my plans of flying to 65.
We all need a rule that poses the least harm to all across the board. There are just too many of us out there who worked for Braniff, Pan Am, Eastern Frontier, or other carriers gone bankrupt, merged or otherwise forced you to seek employment elsewhere, starting on probation wages....again. Many pilots have four or five different uniforms in their closet, gaining seniority only in age, and need to work beyond age 60 to enjoy a decent retirement. Only the largest majors have the big pensions, and therefore are against any change, however, with the demise of the younger hiring age, many of their newer pilots are realizing the possibility of inadequate pensions at age 60. Most, if not all, smaller or newer carriers do not have a fixed benefit retirement. For those pilots, retiring at age 60 could be their worst nightmare. Realization of this fact may come for the non-forward thinking as they get nearer to the guillotine of the Age 60 Rule.
We all need to have a rule that best assures our future not one that just placates our situation early in our careers.

 

[Whistlin' Dan]

If we let you guys work to 65 and forgo seniority progression wholsale, it's a bad thing. Plus, in less than 3 years after the change, the whole argument will start up again! You all will want 66, then 68, then till you get too sick; It'll be the same old arguement, Klako wont be ready and you will be equating your retirement to all forms of discrimination. You have to retire someday.

Nobody's proposing to "forgo seniority wholesale" just raise the retirement age. Change ONE digit, among the hundreds of thousands, in the FAR's. Does changing that one digit create ripples throughout the industry? Of course. But the ripples that inconvenience you now, may be what allows your own vessel to become unstuck from the mud flats later on. I don't care how carefully you plan for your own future, you won't know what your financial situation is going to be at retirement until you get there.

As for extending the retirement age to 68 and beyond, unfortunately, you're probably right. Some guys would fly forever, or "Until [their] beard gets tangled in the propeller" as Ernie Gann used to say. But I think you'll find that support for raising it any further will wane quickly once you get past 65.

 

[Draginass]

Leave the retirement age alone. I want what meager retirement I get at 60 and not wait till later. Just because some people haven't planned their finances when they had the chance doesn't mean I should have to work 5 years longer for what's mine.

 

[skiandsurf]

Age 60 rule...

We have all planned our careers with the thought of the "old guys" moving out at age 60. Well the times are changing. Interesting that this week was the 60th birthdays for Clinton and Bush. I really wouldnt want Clinton flying me around, but would feel OK with Bush in the flightdeck.

Here is a possible "fair" solution. When a pilot turns 60, they can continue to fly as a First Officer. Yeah, that would suck, but unemployment sucks more. This would keep the Captain Upgrades coming.

 

[The Prussian]

Optional Insurance Policy

Leave the retirement age alone. I want what meager retirement I get at 60 and not wait till later. Just because some people haven't planned their finances when they had the chance doesn't mean I should have to work 5 years longer for what's mine.

Drag....just suppose you lose your medical for 5 years :erm: (Yes, it does happen!). Not something you necessarily planned on, but then you didn't ask the Feds for their untimely decision affecting your well-planned financial scenario. Life doesn't always go the way we'd like it to go... but the option of being able to go an extra five years can suddenly look real smart. Just view it as an optional insurance policy that we all could use.

Prussian

 

[Klako]

It is high time for the United States to follow the lead of forward thinking
nations around the world who have broken through the arbitrary age 60
barrier. The Age 60 Rule is going to be repealed. Repeal is long overdue, and this time - more than ever before - the FAA knows it, pilots know it, passengers know it, and our senators and congressmen - whose offices acknowledge that the majority of the calls and letters and faxes they receive favor repeal (despite ALPA's best and costliest efforts) - know it.
Shame on those of you who are still in “lock step” with ALPA and APA as traitors to your own senior union members. Institutionalized age discrimination through ALPA’s APA’s accelerated advancement scheme for junior pilots is nothing but shameful. Look over what you are being asked to support, look inside yourself. If the circumstances of your career were different, through no fault of your own, would you be so anxious to dictate to others when they must end their careers? Now is the time to stand on the side of reasonableness and fairness and support a change to the Age 60 rule.

 

[Flopgut]

Klako: Now your just trying to be silly, right? I do empathize with the change you were dealt going to FAR121. That vastly improved safety (something you might not want to push since age 60 was a part of) and weren't there some considerations made at that time for pilots most directly affected by the immediate change? (was that for BE1900 only?) I know XJET had a 65+ year old CA until somewhat recently. I don't care what the details were per say, some compromise was made in that case for oldsters; the change you want has no compromise for me and my contemporaies.

I fly with a lot of pilots very close to retirement, especially Braniff. My own experience is that many of these pilots are still equipped to retire despite what they endured there and FAL. They made a plan to retire at 60, had faith in it and made it work. MOST of them did that; they are the ones I want to emulate. Then there are the others. Pilots who could have had every break in the world and still not be ready. They squandered away their whole carrers and they aren't ever going to be ready. About 1 in 5 are not ready and EXTREMELY vocal about it. This is my interpretation.

What were you doing before age 42 if you don't mind me asking? Do you stay apprised of what you could do with the helecopter credentials? We had a guy leave CAL early and go fly helos in the oil patch for a great paycheck.

 

[Flopgut]

We should all look at this:

[SIZE=+4]See Ya' Down The Road[/SIZE]
Why retire young? Below is a very interesting study comparing age at retirement vs. age at death. The average person who works until age 65 dies 18 months after retiring while the person retiring at age 50 lives to be 86 years old. For those contemplating working another few years before retiring, realize you are losing two years of your life for each year you work beyond age 55.
I have received information that Dr. Sing Lin used old data for his research so the facts below are not entirely correct. Due to interest in his research I will leave this page on my website for several more months.
[SIZE=+2]Optimum Strategies for Creativity and Longevity[/SIZE]
By Sing Lin, Ph.D.
Member of National Council of Chinese Institute of Engineers – USA/Greater New York Chapter, and Member of Board of Director of National Taiwan University Alumni Association – Greater New York (March 2002)

1. Most Creative Years in the Life
The Nobel Laureate, Dr. Leo Esaki, delivered the distinguished lecture entitled "Innovation and Evolution: Reflections on a Life in Research" in the University of Texas at Dallas in the afternoon of Feb. 23, 2002 during the 2002 US National Engineering Week. In this lecture, Dr. Esaki indicated that most of the great discoveries and innovations by the Nobel Laureates occurred at the average age of 32 even though the Nobel prizes were awarded 10 or 20 years afterwards. Furthermore, Dr. Esaki indicated that the peak creativity of most scientists occurred around the age range of 20 to 30 years. As one gets older, the experience increases but the creativity decreases steadily with the age.
It is, therefore, very important to stimulate, encourage and cultivate many young people to get interested in science and engineering at their young age and to provide the optimal R&D environment for these very powerful young scientists and engineers to unleash their very strong creativities during their most precious and creative years around the age of 32.
2. Longevity Vs. Retirement Age
The pension funds in many large corporations (e.g., Boeing, Lockheed Martin, AT&T, Lucent Technologies, etc.) have been “Over Funded” because many “late retirees” who keep-on working into their old age and retire late after the age of 65 tend to die within two years after their retirements. In other words, many of these late retirees do not live long enough to collect all their fair shares of pension money such that they leave a lot of extra-unused money in the pension funds resulting in the over-funded pension funds.
Dr. Ephrem (Siao Chung) Cheng provided the important results in the following Table 1 from an actuarial study of life span vs. age at retirement. The study was based on the number of pension checks sent to retirees of Boeing Aerospace.
Table 1 – Actuarial Study of life span vs. age at retirement
[FONT=Arial,Helvetica]Age at[/FONT]
[FONT=Arial,Helvetica]Retirement[/FONT][FONT=Arial,Helvetica]Average Age[/FONT]
[FONT=Arial,Helvetica]At Death[/FONT]49.986.051.285.352.584.653.883.955.183.256.482.557.281.458.380.059.278.560.176.861.074.562.171.863.169.364.167.965.266.8
Table 1 indicates that for people retired at the age of 50, their average life span is 86; whereas for people retired at the age of 65, their average life span is only 66.8. An important conclusion from this study is that for every year one works beyond age 55, one loses 2 years of life span on average.
The Boeing experience is that employees retiring at age of 65 receive pension checks for only 18 months, on average, prior to death. Similarly, the Lockheed experience is that employees retiring at age of 65 receive pension checks for only 17 months, on average, prior to death. Dr. David T. Chai indicated that the Bell Labs experience is similar to those of Boeing and Lockheed based on the casual observation from the Newsletters of Bell Lab retirees. A retiree from Ford Motor told Dr. Paul Tien-Lin Ho that the experience from Ford Motor is also similar to those in Boeing and Lockheed.
The statistics shown in the Pre-Retirement Seminar in Telcordia (Bellcore) indicates that the average age that Telcordia (Bellcore) employees start retirement is 57. Therefore, people who retire at the age of 65 or older are minority as compared to the number of early retirees.
The hard-working late retirees probably put too much stress on their aging body-and-mind such that they are so stressed out to develop various serious health problems that forced them to quit and retire. With such long-term stress-induced serious health problems, they die within two years after they quit and retire.
On the other hand, people who take early retirements at the age of 55 tend to live long and well into their 80s and beyond. These earlier retirees probably are either wealthier or more able to plan and manage their various aspects of their life, health and career well such that they can afford to retire early and comfortably.
These early retirees are not really idling after their early retirements to get old. They still continue doing some work. But they do the work on the part-time basis at a more leisure pace so that they do not get too stressed out. Furthermore, they have the luxury to pick and chose the types of part-time work of real interest to them so that they can enjoy and love doing that “fun” work at a more leisure pace.
The late retirees are small in number, tend to die quickly after retirement and disappear from the population of old people beyond the age of 70. Late retirees, therefore, have very little weight on the statistical average life expectancy of the population of “old people” dominated by the early retirees.
Several years ago, a Japanese friend of mine told me that most Japanese people retire at the age of 60 or earlier. This may be one of the factors contributing to the long average life span of Japanese people.
3. Changing Trend of US Pension Plans
The traditional pension plans of many major US companies used to place a lot of value on the experience of long-term older employees by increasing the pension money rapidly and nonlinearly for long-term employees as their age + service year increases beyond the threshold of the rule of 75. Most long-term employees cross this critical threshold at about the age of 55. On the other hand, the early retirees incur very heavy penalty in pension and in other associated retiree benefits (e.g., employer paid medical insurance, employer paid life insurance, death benefits for family, etc.) when they retire before they meet the rule of 75.
However, in recent few years, many large US corporations are switching from their traditional retirement pension plans to the new portable Cash Balance Plans. The new portable cash balance plans are much more favorable to the younger employees but are very unfavorable to the long-term older employees. Some older long-term employees found that when their employers switched from the traditional pension plans to the cash balance plan, their pensions were reduced by 30% to 50%.
One of the implications of this trend towards the new cash balance plan is that the US corporations are now placing more value on the higher creativity and adaptability of younger employees and less value on the experience of the older employees. This is consistent with the accelerating pace of innovations and technology advances. The creative and dynamic younger employees are better positioned, than the older employees do, to keep up with the faster pace of technology advances.
4. Conclusion and Recommendations
The most precious, creative and innovative period in your life is the 10-year period around the age of 32. Plan your career path to use this precious 10-year period wisely and effectively to produce your greatest achievements in your life.
The pace of innovations and technology advances is getting faster and faster and is forcing everybody to compete fiercely at the Internet speed on the information super-highways. The highly productive and highly efficient workplace in USA is a pressure-cooker and a high-speed battleground for highly creative and dynamic young people to compete and to flourish.
However, when you get older, you should plan your career path and financial matter so that you can retire comfortably at the age of 55 or earlier to enjoy your long, happy and leisure retirement life into your golden age of 80s and beyond. In retirement, you can still enjoy some fun work of great interest to you and of great values to the society and the community, but at a part-time leisure pace on your own term. On the other hand, if you are not able to get out of the pressure-cooker or the high-speed battleground at the age of 55 and “have” to keep on working very hard until the age of 65 or older before your retirement, then you probably will die within 18 months of retirement. By working very hard in the pressure cooker for 10 more years beyond the age of 55, you give up at least 20 years of your life span on average.