COMAIR pension

[datafox]

I've heard rumors that COMAIR began a pension (in addition to a 401(k)) in their last pilot contract. Can someone from COMAIR please confirm or deny this?

If COMAIR does have a pension, you guys rock! How long must you be with the company and how much $ do you get?

I work for ACA. Our union claims that even though we don't have Air Whisky, Air Canada Regional or Comair pay rates we have "hidden money" which makes our contract better. The only problem is that the "hidden money" is nowhere to be found...although I think it may be in management's pocket.

 

[V-1]

From the contract:

The Company will make an annual contribution to each pilot's account in the Retirement Plan account based on the pilot's length of active service with the Company and eligible earnings for the previous calendar year in accordance with the following:

Active Service Company Contribution

0-4 years 2% of eligible earnings

5-9 years 4% of eligible earnings

10-14 years 6% of eligible earnings

15-19 years 8% of eligible earnings

20 years and thereafter 10% of eligible earnings

 

[V-1]

BTW, those numbers work out to about $215k based on current numbers, a pilot who starts with the company at age 30, flys 90 hours a month, on average, and upgrades at year 5.

 

[atpcliff]

Hi!

I believe that Air WI has a company funded "B" plan retirement, in addition to the standard regional 401K option. Their pay and work rules are significantly better than ACA's.

Cliff
GRB

 

[Mr. Irrelevant]

If those numbers truly do work out to 215k, is that with a stated nominal return of maybe 5% a year?? 4% a year? Or is that 215k without a return factored in? Although certainly better than nothing, those numbers pale in comparison to what a 30 year accountant at my current employer would take after those 30 years are put in. I'd hope that 215k is calculated without factoring in a return from each year the $$$ are set aside. Otherwise inflation will eat away that 215k over the next 30 years. At 2.5% inflation, that 215k would only be worth 102k in today's $$$.

I'd hope the 401k is a 100% match up to 6%, or something worth writing home about. Not to knock the contract Comair agreed to last year, clearly there was progress made, but those numbers are so low.

Tell me I'm wrong about those numbers. Certainly better than nothing but who wants to pinch pennies when you retire??


Mr. I.

 

[skyboat]

V-1's numbers are correct as far as percentage contribution for years of service, however I fail to see how he comes up with 215k after a 30 year career. The following numbers are accurate, however I only included years 1,2,30, and 35 (to include all 35 years would be too much space. Remember, though, this is a combination of both 401(k) and the defined contribution plan so don't think a Comair pilot will retire with 4 million from the defined contribution plan. Also, this is under our present contract so who knows what the contract will look like in 30 years. The assumptions are a 26 year old new hire who spends his entire career at Comair. Hope this helps. It isn't fabtastic by any stretch of the imagination but it is better than what we had before.

YOS
Years Remaining
Salary
Company MPP Contribution Percentage
401(k) Match
Non-Compounded Annual
7% Compound Balance
12% Compound Balance

1
34
$21,000
2%
2.5%
$945
-
-

2
33
$36,474
2%
2.5%
$1,641
$2,767
$2,896



30
5
$360,281
10%
2.5%
$45,035
$1,189,698
$2,173,512



35
0
$446,046
10%
2.5%
$55,755
$1,986,565
$4,168,363

 

[V-1]

I believe the original question was about a pension plan, not a 401(k), therefore I left that out of the equation.

The contract is unclear as to what the pension plan is invested in. Therefore it's impossible using that source to speculate what rate of return one will receive. I also don't have the time to do the math on that.

If it's a company-funded pension plan, the way I see it, the only money they're "giving" you is the principle, which I calculated based on current contract wages @ 90 hours/mo.

I should have mentioned my figures were in today's dollars. I believe that's the best, most conservative way to measure the value of the pension plan. Thanks for asking for clarification.

Regards.

 

[Slim]

The "pension plan contribution" goes into the same options a 401(k) participant has. It is also allocated the same way the monthly contribution is.

This is an improvement over what we previously had...NOTHING! However, IMO, this is one area we will seek to improve upon in the next contract.

 

[rufus]

skyboat is on drugs.

Lets see, a Comair pilot retiring with more money than UPS. Yea right!!! That means like you said, you will have a salary of $445,000 35 years from now. Keep dreaming. Aslo you are thinking you are getting a average 7% return on all your investents into your 401k and your salary. Keep dreaming again. I left that rat hole for a reason, no money and no fun. Oh bye the way, my 19,500 I put into my 401k is worth 8,998 today. Gee maybe you should be with management. You have the same fuzzy math. You should have voted no on that contract we went on strike for. Oh well, what is done is done and good luck too you,but stop spreading lies.

 

[9rj9]

I'm glad you left

Over 30 years a 7% return is very realistic. Seems you're the rat, you went running during the strike.
As with all contracts you have to start somewhere.

 

[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.......

__________________________________
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.

__________________

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.