Alaska - will Kasher cause early retirements?

[igneousy2]

I was just wondering what the possiblity the Kasher award will cause some pilots to take early outs. If retirement is based on the highest 60 months out of the last 120 months then I can imagine scenarios where someone may be able to get a higher/same retirement by getting out early then by staying the distance and letting some of the highest paying years start to fall out of the 120 month window.

just wondering...

thanks

 

[Singlecoil]

The problem is that to not pay an early retirement penalty, you have to have 30 years of credited service, which virtually no one will have before they reach age 60. If you don't have 30 years, then you are paying an 8% or so penalty for each year you go before "normal retirement age" (age 60 or 30 years of service).
There are a few pilots for whom it will be beneficial to go a year or two early, since their high paying earlier years will drop out of the formula if they stay. The paycut was large enough to overcome the hit from the early retirement penalty. I would say that this applies to less than 50 pilots, though.
You also have to figure the fact that they are also giving up $150,000 a year in salary by retiring and not flying. Adding it all up, it doesn't make a lot of sense for most folks.

 

[av8instyle]

The problem is that to not pay an early retirement penalty, you have to have 30 years of credited service, which virtually no one will have before they reach age 60. If you don't have 30 years, then you are paying an 8% or so penalty for each year you go before "normal retirement age" (age 60 or 30 years of service).
There are a few pilots for whom it will be beneficial to go a year or two early, since their high paying earlier years will drop out of the formula if they stay. The paycut was large enough to overcome the hit from the early retirement penalty. I would say that this applies to less than 50 pilots, though.
You also have to figure the fact that they are also giving up $150,000 a year in salary by retiring and not flying. Adding it all up, it doesn't make a lot of sense for most folks.

...or age 60 to take no penalty. There is nothing in our contract that says you take a hit if you stay past 60. Our contract would have to change...and with it so would our pay, otherwise it's a "no" vote.