Retirement plans

[race#53]

Is this true?
For Southwest's pilots, the number-one ranking means their plan "gets average plan participants to retirement faster than any other 401(k) plan in the country," says Bryan Lorenz, Brightscope's vice president of data. "A participation rate of nearly 100 percent as well as the highest combination of company generosity and salary deferrals contributed to this outcome."
That must explain why the airline's pilots have that legendary in-flight sense of humor.

 

[gobyebye]

Not sure which part you are asking is true, but the swa pilots 401k plan run by our union was recently ranked the number one 401k plan in the country by brightscope.

 

[Dan Roman]

Just curious. Best 401K???? I looked it up and yes SWA has more matching than Spirit, VA JetBlue. So perhaps that's the peer group they were looking at. However, they are quite a bit less than the Legacys DC and 401k percentages. Hawaiian had the highest at 19.4, Delta was 12 + 2% UAL was 9 + 7%. Even USAir was higher at 10%. Granted they may earn less per hour in some of the comparable positions, but the reality is SWA contibutes less towards retirement per dollar earned than most airlines.

I know they established themselves by being the airline that had stock options and profit sharing instead of retirement and only recently have had even that type of matching so you don't have longevity working for you yet.

I'm not bashing you guys, honest. I am really curious how you folks figure SWA's 401k is some kind of superior plan?

 

[redflyer65]

It was ranked as one of the best 401k's in the country...not just among airlines....Across the board, all companies.

It was rated that high because of the options available regarding investing, plus the low cost that SWAPA negotiated.

Very nice benefit, along with all the others.

 

[Dan Roman]

Fair enough, I'm still trying to figure how it ranks as "best" when others contribute more towards retirement per dollar earned than SWA does.
For example, we have a brokerage account which has limitless options and plenty of no load funds to chose from. Every dollar put in goes towards the investment of your choice of which there is pretty much anything you want to invest in.
I think it's interesting that SWA (or the guy they got to write that article) seems to be claiming a superior retirement program when in fact it's not. Again, not bashing, just observing. Sounds a little self congratulatory to me. Perhaps some of that "warrior Spirit"?

 

[kf4amu]

If my company matched me 100% but the plan only had one crappy fund, it would still be a crappy 401K plan

 

[redflyer65]

Dan,

I think Brightscope is an independant company that does the ratings.

The actual funds that are available to SWAPA pilots are chosen by our SWAPA 401k guys. They interview each fund manager and negotiate the rates for our pilots (sometimes they make changes if they aren't satisfied). We have an option where you can move your retirement money to a Schwab account and have at it. Trade whatever you want basically.

They just recently added a low fee annunity. I haven't reviewed the selection, but we have plenty of choices across the board.

 

[Stifler's Mom]

Could SWA have more self-directed options that are outside of the stock market? (ie real estate opportunities)

 

[jonjuan]

Fair enough, I'm still trying to figure how it ranks as "best" when others contribute more towards retirement per dollar earned than SWA does.
For example, we have a brokerage account which has limitless options and plenty of no load funds to chose from. Every dollar put in goes towards the investment of your choice of which there is pretty much anything you want to invest in.
I think it's interesting that SWA (or the guy they got to write that article) seems to be claiming a superior retirement program when in fact it's not. Again, not bashing, just observing. Sounds a little self congratulatory to me. Perhaps some of that "warrior Spirit"?

Dan,
You just don't get it. Their plan goes to Eleven.
http://www.youtube.com/watch?v=EbVKWCpNFhY&sns=em

 

[Dan Roman]

Dan,
You just don't get it. Their plan goes to Eleven.
http://www.youtube.com/watch?v=EbVKWCpNFhY&sns=em

Now I get it. I can be a little slow on the uptake but that helps.

 

[Juniority]

It's a good plan... although, if she couldn't take half of it, that would make it a great plan.

 

[CesnaCaptn]

Does SWA have a workaround for the IRS limit? It seems to me, most captains couldn't even contribute the amount the company would match without running into the limit. What is it these days? $17k?

Your match is around 9%, right? So a captain, for simplicity making $200k, which I'm guessing almost all make more, would be contributing $9%+. Is that a problem? Also, when I was flying for SkyWest, I know captains were having an issue with being considered "highly compensated employees." Because the pilots were in the same 401(k) as all other frontline employees, there was some rule that we couldn't contribute some relatively higher amount. I just remember the senior captains complaint that they had to stop contributing in November and even got some of their retirement funds refunded. Does that ring any bells?

 

[redflyer65]

All Captains and most FO's max out the 17k each year. Captains sometimes by March/April. I usually max out around July/August.

After hitting 17k, the company continues to contribute 9.3% the rest of the year.

We have an 'overage' plan for the Captains(because FO's don't quite hit the 235k mark each year...unless your flying premium all the time). I believe it's a 401a plan that can shelter more income. We call it Top Hat, its good up to 25k total. Then you add in the Profit Sharing and some Captains get a 'rebate' check because they have hit the limit on all sheltering vehicles.

There has been some discussion about adding a B plan to capture more retirement income going forward. Negotiations are on-going.

From the original post, SWAPA/SW has nothing to do with BrightScope. They are a third party that evaluate 401k plans across the board. The SWAPA 401k committee has done an awesome job to keep our choices at the top of the list...for all companies across the country.

 

[Cruncher]

Dan,

I'll try to answer tomorrow. SWA's plan is the first I've really looked at. As a Boglehead, it really can't get much better.

More latr, C

 

[atldc9]

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