UAL DC Plan (B-Plan) ?'s

[Captain X]

I've been looking through the UAL CBA 2003 and am having difficulty finding a reference to a Defined Contribution Retirement Plan (aka B-Plan) or retirement compensation at all. I see LOA 03-16 but it kinda confused me.

Can someone simplify what type of retirement compensation plans the UAL pilots have?

I believe/thought the former Defined Benefit or A-Plan was turned over to the PBGC in BK correct?

Is there a B-Plan in effect? Is that the "Pilot Directed Account Plan? Looks like 9% contribution correct?

Is there a 401(K) matching plan? Roth 401(K) option?

Profit-sharing plan?

Lastly, who is the firm used to manage retirement funds?

For comparison, there is a "frozen" A-Plan at CAL for basically the top 2/3 of the seniority list, some having significant balances and some relatively small.

We have a DC plan (12.75% eligible earnings) deposited monthly.

We also have 401(k) with Roth option deposited monthly. No match.

However there is (was) a Variable Contribution plan based on the Company's pre-tax income. The last reference date for a contribution was 9/1/08 so I am honestly not sure of the status of this program (although it hasn't paid out to my knowledge due to financial performance). The way our contract reads, it appears this had a "sunset date" on it. The contribution was pretty small too (1-2%). Someone please correct me if I'm wrong on any of that.

We had a profit-sharing plan but it reached its sunset date. (even though profits have been thin/nonexistent, there's nothing like adding a concession on the concessionary cake long after the fact and having to renegotiate something we already had exercised bargaining capital for :angryfire).

The company recently started a new PS plan that the pilots, nor any organized workgroup to my knowledge, were not included in (although Mr. Smisek has stated publicly that all employee groups should be treated the same when it comes to any benefits) I guess that's why CAL caterers travel at a higher pass class then most other employees too.

CAL pilots switched to Charles Schwab after C'02 for both 401(K) and B-Plan. Those who take an active interest in managing their retirement portfolios seem to really enjoy its simplicity, tools and access to multiple investment vehicles (i.e. a large list of mutuals, individual stocks, ETFs, options, etc.) via Schwab Personal-Choice Retirement Accounts (PCRA).

 

[EL10]

A plan = PBGC
B plan = 9%
C plan = 7%

All that summed up is what the company puts into your account. You of course can do pretax contributions too.

 

[Captain X]

C plan = 7%

Can you explain how the C-Plan works? How does it differ from a B-Plan? Does it replace a 401(k)? I've heard the term before but not really familiar with the true vehicle. Is there another name for it a'la A-Plan = "Defined Benefit" and B-Plan = "Defined Contribution?"

All that summed up is what the company puts into your account.

What firm is the account(s) managed through?

You of course can do pretax contributions too.

It's my understanding that all DC contributions are pre-tax up to $49,000. So what retirement tool are pre-tax contributions done through? Stand-alone 401(k)? How about the Roth option?

 

[ualdriver]

B/c plan

Can you explain how the C-Plan works? How does it differ from a B-Plan? Does it replace a 401(k)? I've heard the term before but not really familiar with the true vehicle. Is there another name for it a'la A-Plan = "Defined Benefit" and B-Plan = "Defined Contribution?"

What firm is the account(s) managed through?

It's my understanding that all DC contributions are pre-tax up to $49,000. So what retirement tool are pre-tax contributions done through? Stand-alone 401(k)? How about the Roth option?

The 49k you refer to is a government restriction and is the total you and your employer can contribute to DC plans. It's a limit that affects very few pilots.

The B and C plans for all intents and purposes are the same. They just show up as separate lines in the monthly deposit to your Frank Russell account. The total of the B and C contribution is 16% of your gross earnings paid once monthly at the end of the month.

Frank Russell through Hewitt manage our retirement accounts. There are around 15 different accounts managed by Russell that you can invest in, including a money market fund, a stable value fund, a couple of bond funds, and several equity funds including some new life cycle type funds.

If you don't want to invest in the above mentioned funds, you can transfer your money to a Schwab account and invest in whatever you want. You are required, however, to keep a minimum of $10000 on the Russell side and it costs 14 basis points per year, assessed on the dollar amount you have over in Schwab.

That's it in a nutshell. We have a really good plan with low costs and great flexibility. One thing we do not have is a Roth 401k.

 

[UALRATT]

The 49k you refer to is a government restriction and is the total you and your employer can contribute to DC plans. It's a limit that affects very few pilots.

The B and C plans for all intents and purposes are the same. They just show up as separate lines in the monthly deposit to your Frank Russell account. The total of the B and C contribution is 16% of your gross earnings paid once monthly at the end of the month.

Frank Russell through Hewitt manage our retirement accounts. There are around 15 different accounts managed by Russell that you can invest in, including a money market fund, a stable value fund, a couple of bond funds, and several equity funds including some new life cycle type funds.

If you don't want to invest in the above mentioned funds, you can transfer your money to a Schwab account and invest in whatever you want. You are required, however, to keep a minimum of $10000 on the Russell side and it costs 14 basis points per year, assessed on the dollar amount you have over in Schwab.

That's it in a nutshell. We have a really good plan with low costs and great flexibility. One thing we do not have is a Roth 401k.

...adding to your post the retirement plan at UAL also allows individual (unmatched) contribution to the plan under traditional 401K rules (16,500.00 per tax year, slightly higher if you're close to retirement). Contributions are made to the Russell account and can be invested much like the B and C funds.

 

[IAHERJ]

That sounds like the way our B-fund and 401K work. There are no restrictions however on the amount you put in the Schwab PCRA(personal choice retirement account). You can short/buy any stock on the market, play the options market etc. in your PCRA. There are around 15 funds otherwise you can invest in if you don't want to play the stock market directly. Trades are unlimited at 8.95 per trade in the PCRA.

 

[ualdriver]

...adding to your post the retirement plan at UAL also allows individual (unmatched) contribution to the plan under traditional 401K rules (16,500.00 per tax year, slightly higher if you're close to retirement). Contributions are made to the Russell account and can be invested much like the B and C funds.

True. And you can also contribute additional money to our plan post-tax as well, up to the IRS limit for that year (counting 401K, B&C, post-tax)

That sounds like the way our B-fund and 401K work. There are no restrictions however on the amount you put in the Schwab PCRA(personal choice retirement account). You can short/buy any stock on the market, play the options market etc. in your PCRA. There are around 15 funds otherwise you can invest in if you don't want to play the stock market directly. Trades are unlimited at 8.95 per trade in the PCRA.

I'd be surprised if you can trade options in your retirement account other than covered calls. Regardless, our plans sound pretty similar. We get 8 dollar trades now, which is something new we were able to negotiate. One thing that you guys can do (correct me if I am wrong) that we can't is have financial advisers deduct their fees directly from your retirement account.

 

[bizicmo]

I think you can sell puts also and calls

 

[Captain X]

Schwab offers 4 different levels of option trading. CAL PCRA allows the 1st level (level 0).

Covered Calls
Covered Puts
Buy-Writes
Unwinds
Covered Roll-outs

In the past I've had accounts with T. Rowe Price, Mainstay, NYLife, and Shearson Lehman (I think, that was a while ago).

Schwab has been the best so far. T. Rowe Price was right up there with them.