SWA Contract - How good is it?

[PCL_128]

Difference is we get to keep ours reguardless what happens to the company. I truly hope you still have yours at the end of your career, hard to tell these days.

There's no difference there. B-funds are in your own name and aren't at risk if the airline goes out of business or files bankruptcy. It's your money.

 

[PCL_128]

PCL,

Why are B-plans "far superior" to a matching 401k? - I mean, Besides the fact you have to contribute your own money to get the match

That is all the reason you should need. You shouldn't have to contribute a dime of your own income if you don't want to. That should just be icing on the cake, not your base retirement plan.

 

[momalley81]

That is all the reason you should need. You shouldn't have to contribute a dime of your own income if you don't want to. That should just be icing on the cake, not your base retirement plan.

In my AA 11% B-fund I had NO option where my money went.

At least in my SWA 401K I can control where my money goes.

B-fund's are nice but they are not "FAR SUPERIOR" to 401k's.

 

[PCL_128]

In my AA 11% B-fund I had NO option where my money went.

That's just a bad B-fund then. Most B-funds include many investment options and some even include self-directed brokerage accounts that allow you to invest in just about anything.

 

[BottomPlug]

... ... ...

 

[momalley81]

That's just a bad B-fund then. Most B-funds include many investment options and some even include self-directed brokerage accounts that allow you to invest in just about anything.

Exactly. My SWA 401k does. (It even has a self directed brokerage) My AA B-Fund does not.

But to say B-fund's are "FAR SUPERIOR" to 401k's is quite a bit misleading. All B-funds are not created equal.

However as a third year F/O, I would rather have 7.3% of $130,000 versus 10.5% of $65,000

 

[vixin]

However as a third year F/O, I would rather have 7.3% of $130,000 versus 10.5% of $65,000

Can you say? OUCH!

 

[momalley81]

Are there HCE vs NHCE rules for B-Funds?

Yes, there are HCE rules in place for B-funds.

B-Funds are far superior to 401K plans.

No they aren't. I have both. I should know.

BTW, why did you erase your snappy comment? Looked it up for yourself and realize you didn't know what you were talking about?

 

[PCL_128]

However as a third year F/O, I would rather have 7.3% of $130,000 versus 10.5% of $65,000

No argument there. But there's no reason why your wildly profitable company can't provide you a good B-fund so you don't have to contribute your own money to retirement if you choose not to.

 

[JoeMerchant]

No 401k match is ever comparable to a B-plan. B-plans give you money without you having to contribute a dime of your own money. You only receive a 401k match if you contribute. There are also more restrictions on 401k contributions than B-plan contributions. B-plans are far superior to 401ks.

I thought we don't compete with one another....You sure are worried about what SWA gets.....

 

[JoeMerchant]

No argument there. But there's no reason why your wildly profitable company can't provide you a good B-fund so you don't have to contribute your own money to retirement if you choose not to.

How's the Air Tran B fund? How were the PNCL and Gulfstream B funds?......

 

[PCL_128]

I thought we don't compete with one another....You sure are worried about what SWA gets.....

We don't. But we do pattern bargain off of one another.

 

[PCL_128]

How's the Air Tran B fund?

Pretty good. Thanks for asking.

 

[satpak77]

just a side note, the 401(k) stuff, 401(k)s were NOT designed to benefit the worker, despite spin by corporate America, they were designed FOR the companies, so that they would no longer have to pay $$ cash in pensions and could instead put the burden on the market itself and the worker to choose investment choices.

If the market is in the dumps, well, so is your 401(k). If the market is up, 401(k)s are "better" than pensions. A 401(k) in 1998 was the hottest thing around. Now? Give me a pension.

observe how very few companies, the US Govt included, offer a "pension" as a retirement plan. There is a reason for that.

 

[momalley81]

If the market is in the dumps, well, so is your 401(k). If the market is up, 401(k)s are "better" than pensions. A 401(k) in 1998 was the hottest thing around. Now? Give me a pension.

Not true. If your investments in your 401k are in Cash and Bonds then you are beating the market. You don't have to be in 100% equities in your 401k.

Furthermore, ask the USAir guys how they like their pension right now. An A-fund is not yours until you sign on the dotted line at retirement.

And a B-fund is simply a 401k that you don't have to contribute to. Many times (as in the case with AA) it is almost 100% tied to equities with the employee having no say how that money is invested.

 

[momalley81]

No argument there. But there's no reason why your wildly profitable company can't provide you a good B-fund so you don't have to contribute your own money to retirement if you choose not to.

If you choose not to contribute to your 401k then you are an idiot.

End of story.

 

[satpak77]

Not true. If your investments in your 401k are in Cash and Bonds then you are beating the market. You don't have to be in 100% equities in your 401k.

Furthermore, ask the USAir guys how they like their pension right now. An A-fund is not yours until you sign on the dotted line at retirement.

And a B-fund is simply a 401k that you don't have to contribute to. Many times (as in the case with AA) it is almost 100% tied to equities with the employee having no say how that money is invested.

An investment in cash and bonds will yield 3-6%. The problem is that 98% of the general public does not know when to go cash and bonds.

You have valid observations on the A-fund, etc.

However (this is an airline thread, yes, but...) in most scenarios a pension is a better benefit than a 401(k) is.

 

[momalley81]

An investment in cash and bonds will yield 3-6%. The problem is that 98% of the general public does not know when to go cash and bonds.

You have valid observations on the A-fund, etc.

However (this is an airline thread, yes, but...) in most scenarios a pension is a better benefit than a 401(k) is.

I wouldn't mind having a B-fund that was self directed however I want NO PART of an A-fund.

No A-fund at all.

However, if it is self directed then I have the same problems with market fluctuation and market timing that everyone else has with a 401k.

That being said my point that a B-fund is not better than a 401k still holds water. They are almost one in the same and the A-fund is too risky to have in the airline sector.

So again I respectfully disagree. I don't think a pension is better than a 401k.

 

[PCL_128]

If you choose not to contribute to your 401k then you are an idiot.

End of story.

That's not the point. The point is that you shouldn't be required to contribute some of your salary to your retirement. Anything you contribute should be icing on the cake. There should be a base retirement contribution from your employer without a dime coming from you.

 

[satpak77]

I wouldn't mind having a B-fund that was self directed however I want NO PART of an A-fund.

No A-fund at all.

However, if it is self directed then I have the same problems with market fluctuation and market timing that everyone else has with a 401k.

That being said my point that a B-fund is not better than a 401k still holds water. They are almost one in the same and the A-fund is too risky to have in the airline sector.

So again I respectfully disagree. I don't think a pension is better than a 401k.

Well let me meet you half-way and say a non-airline pension in almost all cases is indeed better.

I would rather get a pension from Exxon than a 401(k) from Exxon. etc