More Good News: Defined-Benefit Plans

[FLB717]

Lets see. Companies don't put money in during the booms because the rates off set the money they should and maybe include. During the busts they can't aford to put money in because they have none to put forward. then if they go CH11 or CH7 your investment become toilet paper. No thanks I'll stick with my 401K and 401B Funds thank you.

 

[CitationLover]

airlines are no different than the rest of any industry. db plans as a whole are dropping due to the enormous REGULATIONS being imposed on them by congress as opposed to DC plans. companies throughout the 90's tried to reduced a db plans overall cost, which is a direct function of the average age and service of their employees. since workers have been on average getting older and more senior, these plans cost a lot more money. DC plan growth is growing versus DB plans being reduced and reduced. a DC plan is much easier to set up and manage than a DB plan (ie admin costs).

as far as ALPA wanting to change the 60 rule to saqve "cost" this is ridiculous. these plans have been funded with retirement at age 60, ie this cost has already been accounted for. all this would do is delay the problem.

the fundamental problem is drastically low interest rates which have driven liabilities way up. the RPA '94 current liability rate, which the minimum contribution (part of which is the Deficit Reduction Contribution, the famous DRC) is based on, is a 4-year moving AVERAGE of 30yr GATT rates andd will still keep costs high for at least 4 more years if rates go up. the PBGC uses unrealistic interest rates (we're talking almost 4%) to measure the "unfundedness" of the plan. congress most stop these idiotic rates if DB plans are to be safe.

 

[chase]

Need help (as always)

Someone who knows please answer me this:

A pilot who retires from USAir today will retire (not referencing any B fund or 401K, primarily referring to A fund) with which of the following:

1. A maximum of $24K (set by the PGGC) since the USAir retirement fund was written off by the bankruptcy judge.

2. The full amount he was owed prior to the bankruptcy hearing (unsure but assume it was a % of the top 3/5 years of whatever he/she flew before retirement.

3. Someother number determined by the bankruptcy rulings.


A pilot who retires in the near future will retire with:

1. Whatever the answer is above.

2. Being further negotiated by the unions & managment at this time.

3. Some other answer.



Thanks in advance for the answer.