ALPA/401k revisited

[SaturnPilot]

Yes it can be done and if it is done by many people it will cost ALPA more than they are getting in this misguided move......

I would suggest however that you withold ALL dues, not just the 401k amount....In either case you will go into bad standing and the union will exercise the Agency Shop clause....However that process will take time and you can write a check and come current after they start to come after you.....If large numbers of people do it, it will take up much ALPA resources to go after everyone....

Another thing you can do to send a message is to write your comments on the ALPA PAC postage paid envelopes that come in the ALPA magazine....Don't send any money....just constructive comments......

honestly, what is the point of doing this above? Do you really think when the ALPA staffers get PAC cards back with nasty thoughts on them, the Executive Council is going to say, "well, we probably shouldn't change anything about the dues..." If you're really unhappy about this, I would suggest starting an education campaign at work and having everyone you know contact their rep and tell them to vote no.

Has anybody actually taken the time to see how much more money they will be paying? You'll find out that it is most likely going to be less than $10/month.

If you do things like cancel your checkoff, it is going to be pretty easy to fall behind and find your job in jeopardy with quite a large bill to pay. Meanwhile you won't be able to vote in any elections, participate in a recall of the reps that you are so mad at for voting in this <$10 increase, vote on any TAs, etc.

People aren't saving enough for retirement as it is...to take money that was set aside for retirement is shortsighted.....

ALPA is not taking any body's retirement money. The amount of money going into your retirement fund will stay exactly the same.

 

[PCL_128]

What a bunch of whiney little cry babies. And all over $10 a month that hasn't even been approved yet. Get off your asses and start a campaign to convince the BOD not to approve it. If you still lose, then pay your damned dues and stop whining. You'll pay more on your crappy Starbucks coffee tomorrow than you'll pay in extra dues for the month, yet you b!tch about this. Unbelievable.

 

[Yodafly]

Is the Teamsters also trying to pass this

 

[Freight Dog]

Those extra $10 could mean a month supply of Ramen that you'll need when the rug gets pulled from under you...

 

[Speedtape]

Let's see:

This is the story of two pilots that both work for the same company, both hired in the same class, both upgraded at the same time on the same equipment. Pilot A decides not to participate in the 401k--for what ever reason. Pilot B decides to participate in the 401k to the maximum that the law allows. Both pilots earn $80,000 in GROSS WAGES. Pilot A pays ALPA dues of .0195 of his GROSS WAGES of $80,000. Pilot B only pays .0195 on his Taxable Wages of $70,000(Gross Wages $80,0000 minus 401K contribution of $10,000). Is this fair?

Both pilots work under the same collective bargaining agreement. Their agreement was negotiated by the same collective bargaining agent. All pay and work rules that exist are a result of the efforts of that collective bargaining agent, which also include the efforts of the local pilot group. Most likely, their current collective bargaining contract evolved over time to a better contract with better work rules. AND, as time goes on, that contract should improve. Those improvementents usually include increased compensation in many forms.

The questions are:
In all fairness, should Pilot B pay less money in dues than Pilot A, based on the fact that he elects to participate in a 401K? Should those wages that he elects to contribute to the 401k be exempt from dues? Were those monies not part of the wage that he earned that were negotiated under the collective bargaining agreement that both Pilot B and Pilot A work under? Should all members not pay the same percentage on GROSS WAGES?

 

[PCL_128]

Don't bother with common sense with these malcontents, Speedtape. You'll get nowhere.

 

[DGdaPilot]

Eagle ALPA is voting NO. Who else's LEC/MEC is gonna stand up to this crap????

And if that's your attitude Speedtape and PCL, then should US taxpayers be penalized for the same type of actions? We reduce our taxable income by using Flex Spending Accounts, Dependent Daycare Accounts, 401k contributions, itemized deductions, etc, etc. Should those people pay an extra government tax because they were smarter with their money?

 

[PCL_128]

Eagle ALPA is voting NO. Who else's LEC/MEC is gonna stand up to this crap????

And if that's your attitude Speedtape and PCL, then should US taxpayers be penalized for the same type of actions? We reduce our taxable income by using Flex Spending Accounts, Dependent Daycare Accounts, 401k contributions, itemized deductions, etc, etc. Should those people pay an extra government tax because they were smarter with their money?

These are dues, not taxes. But since you asked, yes, I support a flat tax or a sales tax, so investments would be taxed in those tax structures.

 

[Soverytired]

Let's see:


The questions are:
In all fairness, should Pilot B pay less money in dues than Pilot A, based on the fact that he elects to participate in a 401K? Should those wages that he elects to contribute to the 401k be exempt from dues? Were those monies not part of the wage that he earned that were negotiated under the collective bargaining agreement that both Pilot B and Pilot A work under? Should all members not pay the same percentage on GROSS WAGES?

Yeah, those guys who took advantage of the 401(k) to save for their retirement and thereby deny ALPA dues money are FREELOADERS.

I think ALPA should not only close this loophole, but retroactively assess these selfish bastards who kept money out of ALPA's coffers. And they should pay interest, plus a penalty as well.

It's only "fair".

 

[Nevets]

June 13, 2008

Dear ALPA Board of Directors Member:

At the May 2008 Executive Board meeting, the National Officers and ALPA’s General Manager provided a thorough briefing on our union’s finances after the loss of US Airways, America West, Aloha, ATA, Champion, Kitty Hawk, and Skyway. We had to make some tough decisions to ensure that we retain the balance of services deserved by our members and the financial health and viability of our union. We could not continue with business as usual—immediate action was required to sustain our Association’s effectiveness after this sudden loss of $15 million in dues revenue.

One of those tough decisions was a recommendation to the Board of Directors by the Executive Board that a change be implemented regarding income exempt from dues. This was not a sudden decision, but one that has been studied and evaluated over the past several years. In September 2006, the Executive Board directed the Executive Council to study this matter. The study was to view the exemptions from the perspectives of fairness, simplicity, and clarity, as well as the implications on dues revenue.

Currently, the following incomes are exempt from dues:

1. Sick leave income in excess of that provided by sick leave provisions in a CBA or Company sick leave policy
2. Income received from the Company for services in a different job classification while physically unable to perform as a pilot or flight officer
3. Special bonus or merit award, provided that a general bonus to all members of an airline is not exempt
4. Income from the Company while on furlough not requiring flight crewman qualifications
5. Foreign cost-of-living allowances
6. Furlough income
7. Premium payments by the Company on behalf of a member for specified excess life insurance coverage and the value of travel benefits provided to him or her
8. Vacation pay received after retirement
9. Income in the form of corporate securities
10. 401(k) deferrals of income (or the Canadian equivalent) when that plan is the only pension program
11. Company-paid moving expenses and allowances
12. Per diem

This section of the ALPA Constitution & By-Laws (Article IX, Section 4), in particular the exemption of 401(k) deferrals, was adopted more than 20 years ago. The environment and the pilot retirement benefit programs at that time put more of an emphasis on defined benefit plans and other company-funded defined contribution retirement plans. 401(k) plans (and their Canadian equivalent) were more of a salary deferral vehicle than a method of ensuring retirement income that complemented a pilot’s other retirement plans.

However, retirement benefit plan structures have undergone significant changes over the past five years—including the freezing or terminating of many of our defined benefit plans and the increasing consolidation of defined contribution plans under the 401(k) umbrella. 401(k) plans are now being treated as interchangeable with other defined contribution plans, and have become a hybrid of deferred compensation and retirement plans. The pilot contributions are part of a pilot’s regular income but deferred by the pilot, largely for income tax reasons.
In reviewing this matter over the past several years, the Executive Council and Executive Board rejected two other approaches to addressing the issue of how dues are applied to pilot 401(k) contributions. The first was to exempt all 401(k) contributions from dues, which would reduce dues income by an additional $6 million a year and make it difficult for the union to deliver the services our members deserve. The other was to do nothing. If we choose not to take action, the inequality between some pilots having dues deducted from their contributions to 401(k)s and others not having dues deducted would continue. And, as defined contribution plans continue to be consolidated under the 401(k) umbrella, the dues base would continue to erode.

The study also showed that by making all 401(k) salary deferrals subject to dues, the increase in dues to the union would also provide greater funding to the MECs that currently need supplemental funding from the Operating Contingency Fund and Major Contingency Fund. Dues revenue for the union would increase by $1.5M—though a substantial portion of that amount would flow back to ALPA member groups for their use.

The analyses showed that, based on data from 2006 dues revenue, the additional dues revenue paid by a pilot who has a 401(k) deferral and an annual income of $25,000 or less would be $.81 per paycheck. Using the same data, the highest increase per paycheck was $11 for annual income between $150,000 and $175,000 with an average of $7 per paycheck.

Therefore, the Executive Board recommended to the Board of Directors that all 401(k) salary deferrals no longer be exempt from dues, and that the special bonus or merit award exemption be eliminated as well.

It is also important to emphasize that a significant change is under way across all aspects of the Association due to the loss of the aforementioned seven pilot groups and $15 million in dues revenue. A comprehensive plan to address the shortfall was presented to the Executive Board, which includes: retaining unused LEC funding (currently at $44/pilot per year) within our Administrative & Support account for an estimated savings of $900,000; elimination of home Internet expense reimbursement for a savings of more than $100,000; decrease in per capita expenses of $800,000, restructuring of national committees, a streamlining of activities and general cost reduction of $1.2 million; and finally, the elimination of more than 40 staff positions across the entire union along with other staff savings generating a savings of approximately $5.1 million. Since 9/11, ALPA has eliminated approximately 101 staff positions through attrition and job eliminations. That translates to a pre-9/11 staffing level of 454 to our expected staffing level (after the elimination of the more than 40 staff positions) of 353.

We are in the process of verifying the impact of this change on each ALPA airline along with developing applicable information regarding how it will impact each ALPA MEC budget. We will forward this information to you when this work has been finalized. Once such information has been disseminated, the Board of Directors’ ballot on this item will be distributed.
ALPA is changing—your union is focusing on the services and resources necessary to support core functions with a smaller footprint, more efficient use of funds and expenditures, and participation by all parts of the Association. If you have any questions, please contact us.
Sincerely,

William R. Couette
Vice President-Administration/Secretary
[email protected]

W. Randolph Helling
Vice President-Finance/Treasurer
[email protected]

 

[DX Rick]

I'm sure there were plenty of bright/glossy/shiny photos of some ALPA guys sitting around a table somewhere involved in some kind of "conference" or calling themselves some kind of "team" or "taskforce" resolving some issue.
.

Ah, you forgot to mention the one where they were all picketing, and posed for the photo. Looks like the National Mouth Breather Convention.

 

[Nevets]

Dear Board of Directors:

Starting on July 28, you will be asked to vote on an important change to the ALPA Constitution and By-Laws. If approved by two-thirds of the Board of Directors, this change would make all pilot salary deferrals to 401(k) pension plans subject to dues. This would replace current policy, which contains an outdated patchwork of exemptions that do not treat all ALPA members fairly and fail to account for massive changes in how pilots are paid under negotiated contracts. The proposed revision was endorsed by the Executive Council and Executive Board, which consists of the pilot representatives you elected to consider any updates to our policies and procedures.

Before you cast your vote, I am asking you to review this letter and the attached information points. Additionally, ALPA’s vice president of administration, Capt. Bill Couette, and vice president of finance/treasurer, Capt. Randy Helling, will be taping a video message for you and all ALPA members. This video will explain the reasons behind this recommended change and should help you explain to your pilots why this vote is so important. In case you have any further questions, Captains Couette and Helling are available to discuss this important matter with you.
Before you make a decision, please consider the following points:

• The Executive Board and Executive Council studied this issue for more than two years before passing this resolution;
• Making 401(k) deferrals subject to dues will not reduce a pilot’s 401(k) contribution, and there will be no dues on company contributions to 401(k) plans;
• Current policy does not treat all members the same, both within and between pilot groups, since many already pay dues on their defined-contribution plans;
• For those pilots affected by this change, the average per-pilot increase in dues would be around $7 per semi-monthly paycheck;
• Leaving the current provisions in place will cause dues income to further erode as DC plans are consolidated into 401(k) plans;
• The current policy is too complex for airline payroll departments to administer accurately, and does not permit ALPA to verify what airlines report as income subject to dues;
• In accordance with Spending Limit Policy, much of the additional dues income will flow back to the MECs who represent most of the affected pilots. These MECs historically receive supplemental funding from the OCF to support their activities; and
• The additional dues income is integral to preserving existing services.

When we agree to serve as an elected representative within ALPA, we take on the heavy burden of serving our pilots while protecting the long-term health of our union. This vote is a classic example of how that balancing act can challenge us. I believe that the Executive Council and Board did a solid job of weighing all the alternatives and endorsing a change that will minimize the cost to pilots while protecting the financial health of our union. Now the Board of Directors must decide if it agrees that the proposed policy change treats all our members fairly and protects the association. Please review all the information available and cast your vote in accordance with what you view are the best interests of our members.

In Solidarity,

John Prater

 

[Nevets]

401(k) DUESABILITY INFORMATION​

BACKGROUND​

• Article IX, Section 3, of the ALPA Constitution and By-Laws (CBL) states that all airline income of a member is subject to dues.
• Section 4 identifies the elements of airline income that are exempt from dues, including 401(k) deferrals when the 401(k) plan is a pilot’s only pension plan. This section was adopted more than 20 years ago when 401(k) plans were largely deferred income plans and most pilots had other plans through which they received company-funded retirement benefits.
• In their 2002 contract, ATA pilots got a DC plan, which caused their 401(k) deferrals to become subject to dues. The ATA MEC asked the Executive Council to change the CBL to make all 401(k) deferrals exempt from dues.
• Subsequent to the request from the ATA MEC, the VP-Finance reported to the Executive Council that exempting all 401(k) deferrals would cost ALPA $6 million in annual dues revenue, which in a declining dues environment the Executive Council felt ALPA could not afford if the union was going to preserve the quality and level of service that members receive.
• The Executive Board directed the Executive Council in September 2006 to create a subcommittee to review all the exemptions outlined in the CBL, Article IX, Section 4.
• The subcommittee approached this issue with the intent to:
  1. Ensure fairness of ALPA dues structure within pilot groups and across the association;
  2. Simplify contractually-negotiated airline income reporting to ALPA in order to perform the annual dues reconciliation; and
  3. Analyze the effect on ALPA dues income with any change to the exemptions.
• The subcommittee made several reports to the Executive Council. One recommendation was to eliminate the exemption for 401(k) salary deferrals when the plan is the pilot’s only pension program. This recommendation was unanimously endorsed by the Executive Council and overwhelmingly approved by the May 2008 Executive Board. Since this is a change to the CBL, it requires a two-thirds majority BOD vote.

A MATTER OF FAIRNESS​

• First, it’s about fairness within a pilot group: At an airline where 401(k) income deferrals are exempt from dues, two pilots can fly the same equipment in the same seat and earn the same income. But, if one pilot defers income into a 401(k), he or she pays less in dues than a pilot who does not defer his or her income. Alternatively, at an airline with a frozen defined benefit plan, pilots who are newly hired may be eligible only for the 401(k) plan—not the frozen pension plan. Nevertheless, their 401(k) deferral is subject to dues under current rules, even though the only pension program available to them is the 401(k). This is the only way the provision can be administered because airlines cannot be relied upon to correctly interpret ALPA’s CBL and the airlines are not required to—and therefore do not—report detailed income information to ALPA to verify compliance with ALPA’s CBL.
• It’s about fairness between pilot groups: A growing number of pilot groups have only defined-contribution plans. Under current provisions, pilots at these airlines can receive the same level of company contributions to the retirement plan and defer the same amount of income within their 401(k)—but pay different dues amounts. How? If the company contribution is into a 401(k), the deferred income contributed by a pilot to such 401(k) is exempt from dues. But if company contributions are into a non-401(k) defined-contribution plan, these contributions are subject to dues.
• It’s about fairness across the whole union: The current CBL provisions incentivize pilot groups to consolidate retirement plans under a 401(k) umbrella to qualify for the dues exemption. More pilot groups either have consolidated or are planning to consolidate retirement plans within 401(k)s, with company contributions unrelated to employee contributions. This incentive is creating a growing inequity between pilot groups that have consolidated plans and those that do not. The ability of pilot groups to consolidate is affected by factors outside of their control, including the amendable date of their contract, negotiating timelines, and the willingness of their airline to negotiate changes.

IMPACT ON SERVICES​

• The Executive Council subcommittee estimated that in 2007, exempting all 401(k) deferrals would result in roughly $6 million in lost annual revenue.
• Leaving the current provision in place will put further downward pressure on dues income as pilot groups are incentivized to consolidate DC plans under the 401(k) umbrella. We will eventually lose the amount of dues revenue that would have been lost if the CBL was changed to exempt all 401(k) deferrals from dues.
• The recent loss of $15 million in dues as a result of losing AAA/AWA, KHA, SYX, ATA, ALO, and CHA has caused ALPA to undertake significant reengineering programs to offset the revenue loss. The resultant revenue loss to the Administrative and Support (A&S, or National) Account is, per policy, 60% or $9 million annually. In response to this, ALPA has already completed a reengineering plan, which has included the reduction of more than 100 staff positions and other cost-saving measures since the events of September 11. ALPA is under further pressure from airline capacity reductions and will have to make additional cuts.
• Making all 401(k) deferrals subject to dues would result in around $1.5 million in additional annual revenue.
• Further reductions in dues revenue and concurrent cost/service reductions will have the greatest negative impact on the smaller (Group B) airlines that do not have the MEC financial and internal staff resources of the larger (Group A) airlines.
• Additional revenue will be flowing back to the MECs that historically require supplemental funding by the OCF and MCF. This is more important today than ever because, as dues revenue declines, Group B airlines will receive less in MEC income under the ALPA Spending Limit Policy, and the amount of funding available in the OCF for supplementary MEC funding shrinks.
• The average per-pilot increase in dues would be around $7 per paycheck, for those currently not paying dues on income deferred to a 401(k).
• The additional dues amount to be paid by a pilot have been estimated as follows:

• Annual income of $25,000 or less: $.81/paycheck • $25,000 - $50,000 $2/paycheck • $50,000 - $75,000 $5/paycheck • $75,000 - $100,000 $7/paycheck • $100,000 - $125,000 $9/paycheck • $125,000 - $150,000 $11/paycheck • $150,000 - $175,000 $11/paycheck

 

[XJohXJ]

Thank you, Nevets.

I still can't believe so many pilots think of their union, ALPA, as some wizard of oz like entity hiding behind the curtain in DC.

ATTENTION PILOTS: YOU are ALPA. It is your union. You are wasting your own damn money if you misuse ALPA pac cards. You are wasting your own damn money if you participate in some ridiculous non-payment protest that will only end with you either paying everything owned or losing your job. This is not ALPA money, this is your money which you pay to fund your union so they can do work for you. What do you intend to accomplish by wasting your own money?

Now, although I think there is a great deal of misunderstanding around the whole 401(k) thing, any pilot is free to not like it. It is then your job to let your status rep know your opinion, and then your status rep's job to represent the majority interest. THAT is the way to address this.

Intentionally wasting your own unions money will not assist your union in fullfilling your unions fiduciary responsibilities.

Grow up and use your heads.

 

[Rez O. Lewshun]

Civil disobedience is for causes in which the effected people are not a part of the process. For example the Montgomery Bus Boycott, in AL in 1956.

However, ALPA members are a part of the process. They simply choose to remain aloof....

 

[McNugget]

Civil disobedience is for causes in which the effected people are not a part of the process. For example the Montgomery Bus Boycott, in AL in 1956.

However, ALPA members are a part of the process. They simply choose to remain aloof....

Civil Disobedience is quickly cured with the firetruck hose. A most effective remedy.

 

[BOX OFFICE]

Civil disobedience is for causes in which the effected people are not a part of the process. For example the Montgomery Bus Boycott, in AL in 1956.

However, ALPA members are a part of the process. They simply choose to remain aloof....

I'm interested in hearing your theory of how the membership of ALPA can FORCE their reps to vote no on this through "participation". Shall they all recall all of their reps before next week's vote?

Sounds to me like ALPA membership are NOT part of this process. It was rammed through the leadership by the executive council and hoped the membership wouldn't even find out until it was all over.

So you can stop making excuses for Herndon and blaming the membership for all the problems through a lack of involvement.

 

[sweptback]

I'm interested in hearing your theory of how the membership of ALPA can FORCE their reps to vote no on this through "participation". Shall they all recall all of their reps before next week's vote?

I did my part and talked to the reps and explained the reasons why I was against it. That's pretty much all I can do. If a rep votes against the wishes of their pilot group, then sure a recall is in order -- there's definitely a political risk in going against your constituency. But, a recall is hard to pull off and you have to get a lot of people organized, which is tough at the regional level.

However, if this thing passes and our reps vote against it, it's just us being on a losing side of the battle. If people want to seriously vote out ALPA over $5/paycheck then they're crazy, IMO. There are bigger battles to be fought.

 

[Rez O. Lewshun]

Civil Disobedience is quickly cured with the firetruck hose. A most effective remedy.

For the current date. However, it usually motivates more of the like people to show up in the following weeks and months....

In America firetruck hoses are only catalyst for change.

I'm interested in hearing your theory of how the membership of ALPA can FORCE their reps to vote no on this through "participation". Shall they all recall all of their reps before next week's vote?

Recall elections usually occur for two reasons:

1. The elected rep deserves to be recalled due to poor performance. (this 401k issue is not one as the logic for tapping pre tax 401k money is sound)

2. The membership simply doesn't have political SA. They go from aloofness to instant gratification of change via recall. IOW it is an emotional action.

Sounds to me like ALPA membership are NOT part of this process. It was rammed through the leadership by the executive council and hoped the membership wouldn't even find out until it was all over.

An inaccurate statement on your part and only shows your lack of information on the issue. You are not aloof are you?

So you can stop making excuses for Herndon and blaming the membership for all the problems through a lack of involvement.

The democratic process in alive and well in your airline career. It is your choice to participate. In other threads I've explained what how the membership can initiate a grassroots movement in this case.

The logic is understood as to why ALPA wants to do this, and I agree with that logic. However, I don't think ALPA should go through with this right now. The problem is the membership is too aloof to understand why the change is being made. Since they don't care to understand why and simply use crewroom gossip the political damage to ALPA might be worse.

If only we could have an engaged, informed and savvy membership. But don't fret too much.. participation in other democratic organizations such as HOAs and our gov't itself are lacking as well...

American Democracy: the ideals and much different than the practice. Nothing worthwhile comes easy... there is not much easy about democracy.... but I'd rather work at democracy than be subjected to unilateral rules of gov't, corporations and yes unions.

I did my part and talked to the reps and explained the reasons why I was against it. That's pretty much all I can do.

Wrong. How passionate are you about the issue? Are you willing to draft a resolution? Bring it to your LEC? What about a website? A petition? Leaflets? Crewroom chat sessions... All of this and more is available to us and we have the right to do so.. In non union companies your manager would simply tell you to stand down. In non democratic countries you go to jail. These our our democratic rights. Paid for in blood by many since 1776. Corny... perhaps.. but true...

If a rep votes against the wishes of their pilot group, then sure a recall is in order -- there's definitely a political risk in going against your constituency. But, a recall is hard to pull off and you have to get a lot of people organized, which is tough at the regional level.

Agreed. Is it.... what it is? Is it the reps fault? Or the aloof regional pilots? What if the regional pilots were organized and vocal. The reps would have to listen. When the membership doesn't speak the reps have carte blanc....

However, if this thing passes and our reps vote against it, it's just us being on a losing side of the battle.

Agreed. What is the next level of democracy? What else do we have?

If people want to seriously vote out ALPA over $5/paycheck then they're crazy, IMO. There are bigger battles to be fought.

Foreign ownership/Control....


If we don't protect our jobs and careers, the pay cuts from not having ALPA representation will be much much more than a measly $5.

 

[JoeMerchant]

Can anyone defend why ALPA needs more dues? Have they earned it? Has the President taken a paycut?

It's easier to tax a second year regional FO more than for the President to take a paycut.....

Kinda hard to ask a second year FO to pay more while the President of ALPA makes over $400,000 per year plus gets an ALPA pension plan....