COMAIR pension

[Mr. Irrelevant]

Fellas,


Since I was a little bored at work and curious about the possibilities of this pension, I put together some rough numbers on what I think the pension could be worth for a 30 year pilot.

I used the contribution percentages V-1 provided and assumed an upgrade to Captain in year 5. I really didn't know much about the salary structure so I started at 52k in year 5 for a Captain (I know, probably too low) and rose that to 102k in year 18 by adding 3-4k per year to the yearly earnings. Although I've heard the contract only goes to 18 years, given there will be more raises over time I just kept adding 3-4k per year after that to top out at 141k in year 30. As I said, these numbers are probably too low but being conservative I thought was better than being liberal in regard to this issue.

The company I work for provides for a 5% annual return on the pension we receive so I assumed a 5% return. Simplicity.

After 30 years, the nominal dollar number in that pension using the assumptions listed above was $367,737. Adjusting for 2.5% inflation, those dollars in 2002 terms would have the buying power that $175,315 would have today.

If someone wants to list or private message me what they believe a likely salary progression is at Comair, I'd be glad to plug them into the spreadsheet and see what the result is. If someone has the 401k match, I'll do a spreadsheet for that as well. Much higher annual return on the 401k though.


Mr. I.

 

[ShaftedbyJI]

Comiar Retirement

Skyboat's numbers are right on. The final #'s after 35 years of service are using the current pay scale with various raises of 3%(assumed) throughout the 35 years.
Here is more info on the retirement plan.......

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Company Proposal

401(k) Plan – Effective January 1st, 2001, the Company will match 50% of the pilot’s contribution to his 401(k) account of up to 5% of his eligible earnings

-The above plan represents 2.5% of a pilot’s wages. Is this basically the same as our current book? YES, however there is a distinct advantage:

Under current book, many pilots (particularly in their first few years) may not be contributing the 10% in that would give them the full company match. They are now able to get the FULL company match with only a 5% contribution
Money Purchase Plan (MPP) - Effective January 1st, 2001

Years of Service (YOS) Company Contribution
1-4 2% of Eligible Earnings
5-9 4% of Eligible Earnings
10-14 6% of Eligible Earnings
15-19 8% of Eligible Earnings
20+ 10% of Eligible Earnings

-The company proposed ‘Money Purchase Plan’ (MPP) would be administered by Dreyfus. The pilot would control this plan, and the pilot would make the investment decisions. A pilot would not be vested in the plan until they have (5) years of service (YOS) at Comair. As of Date of Signing, the available investment options are the same as those in your current 401(k) – even though they are two distinct and separate plans. All pilots would receive credit for their prior years of service with regard to what level (YOS) in which they would ‘enter’ the plan. Also, both plans are retroactive to January 1st of this year.
Defined Contribution Plan –In this case, it is the ‘Contribution’ level that is defined, as opposed to the benefit level. This is the type of plan is in the Tentative Agreement. Examples of such are those found at carriers such as DHL, American, and UPS Just as in the 401K program (which is also a defined contribution plan), the pilot decides and controls investments in these plans. Depending on whether he invests aggressively or conservatively, the pay-out may vary accordingly. .Performance of investments affect the plan returns.

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Hope this helps......
rufus, glad you're someone else's problem now....

 

[Mr. Irrelevant]

Looking over Skyboat's numbers again, how can a Comair pilot be making 360k after only 30 years of service? A 5% annual raise after year 2, using the year 2 salary as a starting point only yields a $142,982 salary in year 30! A 6.5% annual increase leads to a $212,702 salary in year 30. These seem to be far more realistic than the annual increases needed to provide a 360k salary at year 30. That would be slightly more than a 8.5% annual increase. Is that realistic?

That's an interesting defined benefit plan(MPP) in that the pilot will control the investments. Invested wisely it should yield higher returns than a typical DB plan would provide.


Mr. I.