LCCs Retirement Plans???

[SNIZ]

Anyone want to jump back on the benefits subject? Just wondering.

 

[FLB717]

Les,
I understand you point of a multilayer retirment and you have a good point in that. But in my point of view having listened to the stories of our Eastern, Braniff, Pan AM, TWA pilots. And having read the demise of the AFunds at UAL and USAir I would rather have a 14% or 15% BFund and call it a day vs work for 27 more years to get 0% of my AFund because some guy in the form of anew CEO in Managment screwed my career through CH11 or even worse CH7. As far as a 401K match that would be nice but Id rather have a different form of payout (ESOP, Profit Share, Stock Grants) than a match of 3% or 5% of 12K (5% =$650) not a big deal to me vs the above ideas. I am just very concerned with any pension type fund that relies on the future of any company to pay the bills. My .00002 cents

 

[DonVerita]

Regarding AirTran,

As a previous poster said, we have a B fund retirement plan where the company contributes 8% (at this time) of your monthly earnings into an account with Fidelity. This account is yours. The money is yours. Nobody can take it away from you now or in the future. In April of 2004, the amount that the company contributes will rise to 10.5%.

We also have an employee stock purchase program whereupon you are allowed to purchase company stock at 10% below the market rate. You sign up for a payroll deduction for this, so everything is automatic. You can cancel it at any time if you want.

Also, we do have a 401k plan. But there is no company match at this time.

In upcoming negotiations for our new contract, which is due in 2005 (talks start around April of 2004), we will definately be looking for an increase in company B fund contributions as well as some kind of match on the 401k, in addition to pay raises, increased quality of life issues, and some cleaning up of the wording in the previous contract.

I have been here a little over 1 year. This is by far the best place I have ever worked and my expectations have been met and exceeded. I average 17 days off per month, fly about 4 trips per month, and almost always am able to commute in and out on the front and back sides of the trip; thereby not needing a crash pad.

We have 14 deliveries of 717 aircraft coming in 2004 plus the 737 deliveries starting in May or June. At times, the 737's will be rolling in here at the rate of 2 per month.

The future of this company looks very bright. You may not see all the flashy media that JetBlue gets, but that is by design. AirTran prefers to stay under the radar, get established in new markets without alot of media attention, and then when all the pieces of the puzzle are in place, aggressively expand. JetBlue on the other hand likes to showboat. That is not meant to be a flame, just an observation of a different corporate philosophy. But it comes at a price. By getting in a pissing match with Delta, Song has come down hard on them and continues to do so.

The next year will be interesting to say the least. I think the Big 3 LCC's (Southwest, AirTran, jetBlue) will do fine. I hope that Frontier will be able to hold its own against Ted.

 

[Sam Fisher]

Question for all of you "save the profession --> negotiate an A-Fund" types:

How many airline pilot groups have successfully negotiated a NEW (read: from scratch) A-Fund since 1978 (deregulation)?

Sam

 

[likeitis]

How many airline pilot groups have successfully negotiated a NEW (read: from scratch) A-Fund since 1978 (deregulation)?

Midwest Airlines in 2000.

 

[jbucpt]

Ty, you bone head , when did I say an A- fund is secure? I said they can't just take it away. If you work for a solvent carrier the courts don't come into play, if your in bankruptcy, your fund might be altered, or it might not...

fdj2,

im not baiting, but please explain:

A. what "altered" means.

B. what happened to US Airs retirement fund.

C. whats gonna happen to uniteds retirement fund if the government doesnt step in.

im just a confused low-wage carrier pilot

 

[Sam Fisher]

Midwest Airlines in 2000.

likeitis,

Not exactly true. Pasted below is the actual contract language from Midwest Airlines' Retirement Section. MEA did have a DB plan prior to 2000 that is called the "Old DB Plan" in the contract language. Check out the bolded and italicized section for more details.

Sam

A. Establishment of New Defined Benefit Plan ("New DB Plan”)

1. Effective DOS or April 1, 2000 whichever is later, the Company will establish a new qualified defined benefit plan, The Midwest Express Airlines Pilots’ Supplemental Retirement Plan (the "New DB Plan") covering as Participants only Pilots covered by a collective bargaining agreement between the Company and ALPA (and such Pilots' beneficiaries). Participation in the New DB Plan will be effective on DOS or April 1, 2000 whichever is later, for all Pilots employed on that date and will be effective on a Pilot's date of hire for any Pilot employed after DOS or April 1, 2000 whichever is later.

2. The terms of the New DB Plan will be the same as the terms of the Midwest Express Airlines, Inc. Salaried Employees' Retirement Plan (the “Old DB Plan"), except as provided herein.

3. The terms of the New DB Plan will be applied based on all of a Participant's employment with the Company (including employment with Kimberly-Clark), both before and after April 1, 2000.

 

[Sam Fisher]

The bold italics that you post here is not in the context that you present it as. It is true. Midwest DOES have a "A-fund" that is company funded. It amounts to 1.4% X the average monthly earnings X years of service.

Was/is this negotiated since 1978. I would take a stong guess and say... YES. Actually, however, as far as I'm concerned when this A-fund was negotiated and started is irrelevant. Unless they gave this back post 9/11, they HAVE an "A-Fund".

Great for them!!

Les

Les,

My point from my first post still holds in my opinion. There hasn't been one successfully negotiated NEW A-Fund since deregulation. I think you might have misunderstood the reason for my previous post that included the MEA contract language.

You said that when the A-Fund was negotiated is is irrelevant. I disagree. You are asking guys at Airtran to make sure they get an A-Fund. Regardless of whether or not they want one, they most likely will 99.9% NOT get one. Again, there has yet to be one single NEW traditional pension plan negotiated since 1978. There is a good reason for that.

Sam

 

[FLB717]

Les,
Ok yeah your right on the others being part of the same parcel as an AFund. So I will reply witha question that maybe you can help me with, what is the difference at 28 more years from now with my current BFund of 10.5% and an AFund (Standard payout). Verses an BFund of 15.5%? Curious to know.

 

[Sam Fisher]

Les,
Ok yeah your right on the others being part of the same parcel as an AFund. So I will reply witha question that maybe you can help me with, what is the difference at 28 more years from now with my current BFund of 10.5% and an AFund (Standard payout). Verses an BFund of 15.5%? Curious to know.

Unless he is an actuary or has built some sophisticated financial models using Excel, he won't be able to answer that question. You'd have to derive some market-based assumptions as well as some other miscellaneous assumptions about your final average earnings, upgrade time, rate increases, etc....in order to do that sort of pro-forma forecasting.

A B-Plan is only as good as how your money has done in the market....and an A-Plan is only good if you're company's retirement funds are still solvent. I wouldn't bank my retirement solely on either of these vehicles personally.

Sam

 

[Ty Webb]

Don't expect to glean any knowlege or insight from Les. He's basically a bitter POS who doesn't understand a changing world and wants to lash out at those whom he perceives to be "at fault".

Few things in life are ever that simple. Les- Grow up.

PS., Don't assume that because I work for AirTran and you work(ed) for some "legacy" carrier that you are somehow more knowlegeable or superior to me. . . . because it just ain't so.

If I were you, I'd let up about the "Discount Carriers" because you very well may end up swinging the gear for one of us, and if you think that can't happen, you haven't been around as long as you think.

 

[-9Capt]

AirTran retirement

As mentioned we have a B-fund (currently 8%, goes to 10.5% in April '04)

We have a 401K with no company match.

We have an employee stock purchase plan (10% discount).

What hasn't been mentioned is the yearly stock option grant.

Every calender year the company totals up all the block hours flown (including RJ's and Ryan's flying). Block hours flown x 10% = number of options granted to pilots. The options are granted relative to your W2 earnings (the more you made, the more you get). 3 year vesting period and you must exercise the options within 10 years.

A company representitive from Oppenheimer has a computer program that estimates your retirement earnings (excluding options). A 29 year career (assuming no pay raises, max 401k and no change to the b fund contribution, 7% gain on your money) was worth 6.3 million.

 

[jetblue320]

Re: AirTran retirement

A company representitive from Oppenheimer has a computer program that estimates your retirement earnings (excluding options). A 29 year career (assuming no pay raises, max 401k and no change to the b fund contribution, 7% gain on your money) was worth 6.3 million.

29 YEARS!! My gawd Man, we will all be fertilizer by then!!

I do wish you luck though.

Merry Christmas.

 

[-9Capt]

I got hired at 27, I'll have 33 years if this thing holds togeather.

 

[FLB717]

I was trying to give Les the benfit of putting his spread sheet where is keys are. I would agree that no fund is worth all the eggs in one basket.

 

[likeitis]

Sam,

Midwest started around 1984. Do you think that management just offered the pilots an A-Fund? It was negotiated though at the time there wasn't a union and the NMB wasn't involved.

 

[Ty Webb]

Les Paul, the more you post, the more you contradict yourself.

You say on one hand that you don't believe that somehow you are superior to me because I work at a LCC, then you follow it by saying exactly that:

"It absolutely puts your level of professionalism in perspective. Maybe that is a result of where you work, or simply your background... I don't know. "

Then, you can't wait to follow up by exposing your lack of industry experience when you don't even recognize the age-old aviation saw about "swinging the gear".

Since you seem to be a little behind the 8-ball, Les, I'll re-phrase it for you:

YOU could end up starting over at one of the LCC's that you shoot your mouth off about on these boards . . . but after reading your post, I doubt you have nearly as much experience as you would need to get hired by any of the LCC's. Hard to tell, though, since you deliberately avoided including any info on your profile.

So, Les, let's hear all about your aviation experience. I've got 20 seconds to burn.

 

[Sam Fisher]

Sam,

Midwest started around 1984. Do you think that management just offered the pilots an A-Fund? It was negotiated though at the time there wasn't a union and the NMB wasn't involved.

Actually, it was a rollover from the Kimberly Clark days. My point still holds true in my opinion. No airline pilot union has successfully negotiated a new (from scratch) A-Fund since 1978. The reason I am posting this is that some guys on here are running around saying "get an A-Fund AND a B-Fund and you'll be set." Well it simply isn't that easy. You won't find a new pension plan negotiated for years to come...if ever. The last few years have caused the demise of the traditional pension plan.

Sam

 

[yaks]

Les

You should not try to have a discussion with Ty. You are wasting your time trying to talk to a turnip. Just ignore him like the rest of us do.

 

[Ty Webb]

Oh, Geez, Yaks, you're really hurting my feelings. . . . missing out on all that intelligent discourse I could be having with you, and all.


Yawn.

 

[atldc9]

Just a few comments.

I would love to have an A-fund. Will it come up in the negotiations for our next contract? Absolutely. However, I am not willing to give up anything to get an A-fund. It might be a generational issue. I have 30 years until retirement, assuming it will occur at age 60. I have faith in my ability to save and provide for my own retirement. Having flown with people who lost most, if not all, of thier a funds has impressed upon me the importance of providing for one's self.

To say that an A fund is free money is somewhat misleading. In order for us to get an A-fund would require negotiating, which would cost us something in return.

I just hope Delta survives thier pay cut process with as little cuts as possible. Someone has to keep the bar high so we can claim that we don't make squat compared to X airlines!! It makes our contract negotiations easier.

Now who wants to press for a company car?

 

[pilotyip]

Great Post Sam Fisher

Thank you for your intelligent post Sam Fisher, pensions are a thing of the past, ESOPs, 401K, and other retirement plans are the wave of the future. This is where you the employee put the money in your hands for private investment under your control. The traditional pension was funded by the company out of general revenue operations and invested as they saw fit. If the company goes belly up the gov't gives x% on the dollar for your retirement. As Sam Fisher said most people know the traditional pension is a thing of the past. Except for the UAW, they still think pensions

 

[Sam Fisher]

My words "free money" were made in a very clear manner. Re-read my entire sentence. Free money in my sentence is "non employee deferred". An A-Fund should be a building block in your next negotiations REGARDLESS of whether any other company has negotiated an A-fund in the past 25 years.

I'll stay out of the personal attacks between you and Ty/FLB. However....

Your definition of "free money" should also include B-Plans then, right Les? Since an employee doesn't have to contribute in order to obtain that "free money?" Make no mistake about it...neither an A-Plan nor a B-Plan (or a 401k match for that matter) is "free." They are negotiated in the same context as compensation. It is purely dollars to management. Management doesn't care if it is in the form of a B-Plan or in hourly rate - at the end of the day, it is still a negotiable item that is costed in the final settlement package.

From the sound of your "black and white" comments, you appear to think that negotiations are akin to a "Kay Bee Toy Store" spending spree where you run down the aisle and pull items off the shelf at will without paying for them. You are also sorely misled as to how difficult, if not impossible, it will be for any airline to secure an A-Plan. You might think that my statistic is irrelevant but it only goes to show how ignorant and naive you truly are to the world of labor negotiations.

Sorry to be so blunt and candid, but sometimes that is needed.

Sam

 

[FLB717]

les,
You and I have not always been one the same page. But you have slammed me more than once, and in honesty I have now and then deserved it, as have you. If my English is not up to your great standards, I hope it makes you feel superior. But Im getting very tired of you slamming my airline when you have not the fortitude and integrity to EVER claim your airline or background other than to claim your business background.

 

[Sam Fisher]

In fact... I am willing to bet that a quick survey of contract negotiators and pilots alike would all agree that it is "I" that they would want going into CBA negotiations versus "YOU".

Management negotiators would embrace your starting position and mentality, and exploit your "statistics" like taking candy from a sleeping baby.... at least based on your "quit now we're scr@wed" approach.

Les

I don't believe I ever said "quit now, we're screwed." But I also understand what is realistic and what is not. For you to even try to assume that you know me or my resume...now THAT is ignorant as well. I'm not on here to get into a pissing match over who is "better" or who has a "bigger pee pee." I enjoy the rational debate.

Being a good negotiator isn't about being the most militant nor is it about being the one with the longest Christmas "wish list."

Sorry dude...you're way off base.

Sam

 

[FLB717]

Sam,
Becareful you may end up a Anti-Les like me and Ty have. Im sure it would keep you up at night just like me.

 

[Sam Fisher]

Sam,
Becareful you may end up a Anti-Les like me and Ty have. Im sure it would keep you up at night just like me.

Doubt it. I enjoy logical and level headed debate...not pissing contests. Perhaps my post was harsh but sometimes that is what's needed. I didn't mean any personal attack, just meant to attack the message.

Sam

 

[FLB717]

Sam,
I know you didnt go for the low blow, but Im wondering if Les will. I enjoyed his swipe at my lack of education in a discusion that had no bearing on any grade or lack of thought from my little slow LCC brain.

As far as a pissing contest you are very correct, this tread has lost any useful meaning.

 

[Sam Fisher]

Sam,
I know you didnt go for the low blow, but Im wondering if Les will. I enjoyed his swipe at my lack of education in a discusion that had no bearing on any grade or lack of thought from my little slow LCC brain.

As far as a pissing contest you are very correct, this tread has lost any useful meaning.

Ask him how your 12 year 717 rate of $154/hour compares to United's 737 rate at 12th year...or AA's Fokker 100 rate of $109.79/hour at 12th year. Or ask him about how Airtran's 1:3.5 trip rig compares to United's rig package. Frankly...I am very impressed by Airtran's contract and their provisions. It is definitely a career airline. Go Joe Leonard. Seems to me that Airtran is going to help UAL and AA get their contracts back up a bit and raise the bar.

Sam

 

[FLB717]

Sam, YOU are a true Gentleman. Thank you.