Southwest retirement funds

[justApilot]

Is the 401K a company matched fund? And do you guys have an A or B fund? If so what are the particulars of it.

Thanks

 

[ivauir]

retirement

There is no A or B fund. There is a 401K - up to 15% of compensation, the first 7.3% is matched. You are eligible after one year.

Profit sharing is another program that helps make the compensation tought to predict. But then again, these days it is tought to predict what a retirnent at a more traditional major is worth.

 

[Slug]

401K

Actually, it is immediately available, the 401K that is.

 

[DirtyNasty]

401(k)

Hello,

Just an update to the 401(k) question.

"All Southwest Airlines Pilots are eligible to participate in the SWA Pilots Retirement Savings Plan/401(k) on the first payroll period of the quarter following your eligibility date."

With the new contract new hires are eligible DAY 1. So, I am in the 17FEB class, my first contribution will be taken out of my check 5APR.

As far as the % one can contribute...

"A participant may contribute from 1% to 50% of salary as a pre-tax contribution to the Plan. The maximum employee contribution is controlled by the Federal Regulations and is adjusted for inflation each year."

SWA

SWA will make a dollar for dollar matching contributions of up to 7 and three tenths (7.3%)..."

If you contribute 30% and the company matches the first 7.3%, you will hit your yearly "maximum" with a few months left in the year...that money will just stay in your check and life will be sweet...first year dudes don't have to worry about hitting the "maximum".

The best thing about this plan...it is a "third party" plan, meaning, no matter what happens to the company, it is YOUR money.

The above was quoted out of the "Southwest Airlines Pilots' Retirement Savings Plan, 2003 Annual 401(k) Investment Guide"

This place ROCKS! You guys will enjoy. Still can't get the grin off my face...

See ya soon.

DirtyNasty

 

[ivauir]

Air Stink

Obviously my info is less than 100 % accurate - thanks for the inside scoop

 

[chase]

Profit Sharing

An additional source of retirement funding is the profit sharing account. It works like this:

Each Feb/Mar timeframe the company announces the amount of money contributed to the profit sharing account for ALL employees. This is a hard dollar amount which is translated into a % for ALL employees. For the '02 the dollar amount was $71 M. The % distributed will be 5% of each employees W-2 earnings for the year '02. Money will be deposited into each employees Profit Sharing account. Each employee determines what makes up their Profit sharing account. I attached the list of choices of funds below. You can also purchase company stock. The money is distributed in Sep of the following year of the distributed gains (in this case Sept '03). How to be eligible.

To be eligible for you must be on the property from 1 Jan - 31 Dec '02 & still be working for the company on 1 Sept '03. This money is yours after 5 years. Persons who leave before then have their money divided up among other employees the following year. Here are some historical numbers:

1977 13.1%
1978 18.7%
1979 17.4%
1980 21.6%
1981 19.1%
1982 8.1%
1983 11.1%
1984 9.3%
1985 6.3%
1986 4.4%
1987 0.3%
1988 4.6%
1989 5.1%
1990 4.5%
1991 2.5%
1992 8.3%
1993 10.5%
1994 9.9%
1995 8.8%
1996 8.4%
1997 11.6%
1998 13.7%
1999 14.5%
2000 16.6%
2001 12.1
25 Yr. Average 10.42
Trailing 10 Yr. Average 10.55
Present contract Yrs. 1994 - 2004 11.95%

Funds in the profit sharing account.

Profit Sharing

FUND/ TICKER
MAS Balanced Institutional MPBAX
Dodge & Cox Stock DODGX
Harbor Capital Appreciation HACAX
Vangard 500 Index (SWA) VFINX
PIMCO Total Return Institutional PTTRX
MAS Balanced Institutional MPBAX
Dodge & Cox Stock DODGX
Vanguard 500 Index VFINX
Harbor Capital Appreciation HACAX
EuroPacific Growth AEPGX
Southwest Airlines Stock LUV

These are the funds for the 401K plan.

401(k) Plan

FUND/ TICKER
Morley Capital N/A
Pimco Total Fund PTTRX
Dodge & Cox Balanced DODBX
Davis/New York Venture NYVTX
Alleghany/Mantag & Caldwell Growth MCGFX
Vanguard S&P 500 Index (SWAPA) VINIX
MAS Mid Cap Value Institutional MPMVX
Brandywine BRWIX
UAM/ICM Small Company ICSCX
Brazos Small Cap Growth Securities BJSCX
EuroPacific Growth AEPGX

 

[duckman]

Stock options and choice of 401K equitie

Thanks for the info Chase...
Couple of ??s
1. Any way to chose your own choice of equities (stocks) for the 401K to trade/grind (capital gains free of course) instead of a buy and hold mentality?
2. What about LUV stock options???

Thx

 

[chase]

Answers

The 401K allows you to place up to 25% of your contributions into a Schwab account which allows you to purchase/sell any type of equities you choose. Of course you are charged at the going rate by Schwab for the trades but that is an option available.

Only the listed funds are the ones you may purchase. There are no restrictions on frequency of trading within these funds except the EuroPacific Fund which restricts trades once every 30 days I believe. The 401K committee is looking at some other options to include greater flexibility in purchasing other mutual funds but that is down the road.

As far as stock options go....it hurts my head to think about explaining this but to keep it simple, based upon your month/year of hiring you will receive OG (original grants) of options. Original being the original contract signed in '94. There are ROG (repair option grants) that were negotiated in the most recent extension that helps "repair" some of the disparities in the OG. Those numbers of options vary depending on DOH. The price at the OG will be the price of the stock on a specified date after you get hired. The ROG is the price of the stock shortly after you start or maybe even the day you start...not sure about that one. As you can see it gets quite confusing!!! Hope that helps.