LCCs Retirement Plans???

[FDJ2]

Ah, I'm sure you've heard this before but remember....

You'll never know if you made the "right" choice on your career airline until the day you retire. Luck has a lot to do with it. To think otherwise would be laughable in my opinion. I am sure there were plenty of guys who were "the best and brightest" at Pan Am, Eastern, and Braniff, etc.

I one day hope to work for one of those strong, network-type, industry-leading carriers. In the meantime, I will continue plodding along in my small jet, all the while working to make our compensation, benefits, and work rules better at this level in the industry.

Sam

Sam, on this we are in complete agreement. We'll only truly know after we retired on whether or not we made the right decisions.

Best of luck.

 

[FDJ2]

What are you, about 12? What kind of an idiot thinks this is funny? If I wanted to stoop to your level, I'd start throwing mud about the various crashes and mishaps that Delta has had, but I am a better man than you, apparently.

Never one to be encumbered by mere facts, you stumble forth again:

There will be some former ValueJet guys in 2004 who will obtain that lofty 12 year mark, not many, but a handiful due to their Valuejet days, a fact that I was not aware of.

Here we go again, Chief. There are also original AirTran Airways guys who are in their eleventh year, right now.

I don't think the ValueDeath crash is funny at all Ty. I think it's criminal and I think the ValueDeath management team was criminal in their negligence. No wonder they had to shutdown and buy another name. So there's a handful of guys from ValueJet/ Airtran that will make the lofty 12th year in 2004, hurray!!!! There are none today and that's where we started. How does Valuejet/Airtran stack up against current book rates for 2004 in comparable equipment, assuming you do end up with some 737s in 2004.

DAL: $235
NWA: $204 (2003)
AL: $196
SWA: $186
AAI: $152(700) $172(800)

Top end pay for senior pilots in 2003

DAL: $305
NWA: $273
AL: $189
SWA: $162
AAI: $144

If you have more up to date numbers for these carriers post them, if not then take your own advice.

Like I've said before, that's not a bad pay rate for a new company, hopefully you will strive to raise the bar someday.

 

[Sam Fisher]

Re: A-fund (traditional pension plan) vs. B-fund

I would like to return this thread and this forum back to the reason for which it was started but first a word or two.

Argh....R985! Quit confusing me with the facts!

Happy Holidays!

Sam

 

[FLB717]

Guys one thing to point out here. DAL vs AAI is like compairing Ford to KIA, and Grapes to Watermellon. If I have to explain then you would never get it. Lets all remember that KIA's of the world may or maynot some day offer fullsize SUV's, untill that happens it is a moot point to say my cars bigger than yours. The fact is we should all be happy that LCC's even HAVE retirment. Many small jet operators, some who fly for the Major partners have none or so little its pointless. Lets do things like support the Mesaba guys in thier fight, hmm?

 

[Ty Webb]

Good point.

Now good luck getting it through to some of these guys.

 

[CitationLover]

keep in mind that all pensions (a or b) are forms of deferred wages (r985 referred to this) and LOWER wages. for some people (like me who liek to spend money when i have it) they are good as they force retirement savings, while others have the fiscal discipline to stick with a program.

Ty and AirTran pilots: what pension do you guys have? is your pension benefit a % of FAP times service? is it unreduced at 60?

r985,
that was a really insightful post. i worked 7 years as a pension consultant (im a fellow in the society of actuaries) and you hit the nail on the head. however, i think a lot of companies are moving to dc (what you guys are calling b) plans because the costs are flat. ie you know it will be 6% of wages next year, thus easy to budget. just because a company puts in $100,000,000 this year in a pension (a) doesn't mean it will "cost" the company that (FAS 87). pensions, imho are dying a slow death. heck, even pensions are now being turned into b funds, eg cash balance plans.

 

[SNIZ]

R985,

I was the one researching retirement plans/benefits...thank you for your post, right on the money.

 

[Sam Fisher]

Remember, the point of your retirement package is to get you as close to, if not more, then 75% of your FAE, or income replacement ratio. It doesn't matter how you do it - you just need to get there, so you don't end up as some 85 year old Walmart greeter during your golden years. B-Plan, A-Plan, annuity, 401k, IRA, ROTH, personal equity/fixed income portfolio, etc...just get to 75% by the day you hang up the hat.

Sam

 

[CitationLover]

where do you get the 75% from? 75% seems a little high to me. at retirement 50-60% should be plenty (ie no more mortgage, kids costs, etc).

perhaps the additional 15% comes from SS? ha, yeah right.

 

[Sam Fisher]

where do you get the 75% from? 75% seems a little high to me. at retirement 50-60% should be plenty (ie no more mortgage, kids costs, etc).

perhaps the additional 15% comes from SS? ha, yeah right.

That number comes from our Negotiating Committee's publications and ALPA National's Retirement experts.

Sam

 

[Nandu]

Ah yes, your ValueDeath roots, how could I forget. A terrible accident which was due to the criminality of your sub contractors and the convenient turning the blind eye of your management team.

Absolutely the most disgusting thing I have ever seen on this board!!

I could get into more mudslinging about Delta's accident history, but that would serve no purpose.

FDJ2...you should remove yourself from this board until you can control your emotions, and bring a little more professionalism to the forum.

 

[AA717driver]

I believe you don't have to be in Ch. 11 to terminate an A-Plan. You can do a distress termination and turn it over to the PBGC.TC

 

[canyonblue]

That number comes from our Negotiating Committee's publications and ALPA National's Retirement experts.

Sam

He's right. At my last airline I was on the negotiating committee, and during our talks with the big wigs at ALPA National we had many lengthy discussions with the head of R&I as during this section of the contract we wanted the best we could get (it was 2000 after all). A member of the NC brought up a DB plan and the ALPA National Rep looked at us and said "As management I would rather eat off my right arm than give you guys a DB plan". After all, he had spent years in management with PanAm and his expertise was apparent. He said the new laws requiring funding and oversight were way too costly to warrant a DB plan. The company would have to hire an actuary to oversee the plan and the better route would be to shore up a "B" plan, better 401k match, etc. He said the goal is 75% FAE no matter how you get it.

For those legacy carriers with a DB I would not bend on it at all as it is something that will never appear in an airline contract ever again.

 

[CitationLover]

i'm just saying 75% of FAE is way above average of ALL db plans (market wide, not just the airline industry) and is extremely aggressive. besides alpa could care less about retirement benefits. why would they want to negotiate aggressively for ret bfts when they don't pay any dues? the reason is: it is a bargaining chip to be removed for higher wages.

also keep in mind that there are govt limits (IRC 415) that may not allow the benefit to be 75% of FAE. if that is the case, and it is with most senior retiring airline pilots, then the plan is way too inefficient.

fyi, a company does not have to be in chapter 11 to terminate a plan. they can terminate whenever and pay an excise tax on the excess assets.

 

[Sam Fisher]

i'm just saying 75% of FAE is way above average of ALL db plans (market wide, not just the airline industry) and is extremely aggressive.

...

also keep in mind that there are govt limits (IRC 415) that may not allow the benefit to be 75% of FAE. if that is the case, and it is with most senior retiring airline pilots, then the plan is way too inefficient.

Citation,

What I have read is that the sum of all of one's retirement package should equal 75% of FAE - NOT that the DB plan itself should provide for that. Take your 401k, B-Plan, personal misc. savings, social security, etc...and THAT should equal 75% FAE. This is coming from not only our NC but also from an advisor at ALPA National who has worked in the R&I world for 30+ years...on all sides of the fence.

I don't understand this comment:

besides alpa could care less about retirement benefits. why would they want to negotiate aggressively for ret bfts when they don't pay any dues? the reason is: it is a bargaining chip to be removed for higher wages.

This makes zero sense whatsoever. Who is "ALPA?" Do you mean each individual MEC's NC? Or ALPA National as a whole? Do you have any idea how the bargaining process works? What does paying dues have to do with getting a retirement plan in place?

Sam

 

[CitationLover]

fisher i got you k=now, the three legged stool concept (er, govt, personal). that makes more sense.

as far as alpa negotiating retirement benefits, it is true that this is a carrot that they would easily remove. consider:

active retirees are not represented by alpa (thus no cola's)

the younger members typically give two squats about retirement until they reach their late forties.

pay rates, days off, per diem rates, etc are the items that really drive negotiations (imho) not retirement benefits


i think the benefits are added at the beginning stages or offerings knowing that they will be staged back and viewed as concessions by alpa in the negotiation process.

 

[Sam Fisher]

as far as alpa negotiating retirement benefits, it is true that this is a carrot that they would easily remove. consider:

the younger members typically give two squats about retirement until they reach their late forties.

pay rates, days off, per diem rates, etc are the items that really drive negotiations (imho) not retirement benefits

i think the benefits are added at the beginning stages or offerings knowing that they will be staged back and viewed as concessions by alpa in the negotiation process.

Again, you are showing some true ignorance to the actual bargaining process. I'm at an airline where the median age right now is roughly 32. Yet, retirement benefits is right up there with pay, scope, and work rules. One shouldn't start saving for retirement at age 40. That's ludicrous.

Please remember, it isn't "ALPA" negotiating ANYTHING. It is the pilot negotiating committee doing the decision-making. ALPA National has very little to do with airline's negotiating process. At our airline, retirement is being handled the same as the other economic items from what I can tell. Every economic item is a bargaining chip to some degree.

You need to open your eyes a little and quit buying into the BS, misinformation, and rhetoric.

active retirees are not represented by alpa (thus no cola's)

What do active retirees have to do with anything? If they had an A-Plan, their benefit is taken as either a lump sum or a yearly payout and for the most part (barring a USAIR situation), their retirement is protected. You can't negotiate away an active retiree's package. If there is only a B-Plan, this holds true even more so as the money is protected and is in control by the actual pilot in most of the cases and by a union trustee in other cases.

Happy New Year!

Sam

 

[CitationLover]

sam,

you're not understanding me. im not out to blast alpa....im just saying that as a whole the union would rather have other things. i know it is the mec that negotiates, however isn't duane woerth's signature made on the finalized contract? alpa national has to sign off on it. remember cc air?

ive been involved in numerous union negotiations as a consultant for mgmt and i'm telling you this is the first things we look at:

avg age/svc/inc and base a strategy on that.

airline pension negotiations as a whole are no different than hospital/sen mgmt negotiations.

 

[FDJ2]

fyi, a company does not have to be in chapter 11 to terminate a plan. they can terminate whenever and pay an excise tax on the excess assets.

That would depend on the contractual obligation the company has. Depending on how your contract is written, I don't see how a company can unilaterally terminate a contractual obligation to a DB anymore than they could unilaterally change your pay rates or work rules.

 

[Sam Fisher]

sam,

you're not understanding me. im not out to blast alpa....im just saying that as a whole the union would rather have other things. i know it is the mec that negotiates, however isn't duane woerth's signature made on the finalized contract? alpa national has to sign off on it. remember cc air?

ive been involved in numerous union negotiations as a consultant for mgmt and i'm telling you this is the first things we look at:

avg age/svc/inc and base a strategy on that.

airline pension negotiations as a whole are no different than hospital/sen mgmt negotiations.

You might not intentionally be out to blast ALPA, but your posts are full of that nonsense frankly. You keep saying "the union".....who are you talking about? Some entity at national? Or each individual pilot? The "union" is about the group...each individual pilot added up, hence the word "union." Duane's signature is not much of an issue on a normal contract. The CC AIR deal was an anomoly and involved a unique set of issues. Don't box in all of ALPA and the normal bargaining process by the Mesa Air/CC Air deal.

Nonetheless, you still make no sense in my opinion.

Sam