UPS retirement?

[L'il J.Seinfeld]

LilJ...

Do you know what the max contribution to a B fund is for 2007? That combined with the 401k maximum (which generally increases by $500 each year) cannot exceed $45k per year. With the limitations of the B plan and 401k, we need to have an A plan to capture more retirement earnings. Unless they get rid of the limits for B plans and allow unlimited 401k contributions, it would be foolish to "dump" the A plan in any way, shape, or form. The fact that our plan is tied in with the manager's plan is a great incentive for ups not to do away with it.

Pilot7576

That's what I think will happen. A plans will be gone and contributions to B plans will double. But the wonderful thing about the time value of money is that you can invest your contributions into low risk funds and still outpace inflation.

 

[L'il J.Seinfeld]

Excactly, those who want to get rid of A Plans and go to all B plans, How Big do you think the Govt will allow the B Plan, 401 K contribution get before they start taking their bite? Not big enough to make up for the loss of an A Plan.

Also, a A Plan pays for itself when well managed and the company isn't borrowing from it.

It's in the interests of the govt to NOT inhibit the growth of B plans. They'll get their windfall when Social Sec benefits go away for thos with IRAs/401Ks/defined contribution plans greater than a certain amount.

It is not fair for some companies to compete in a business environment while carrying an enormous burden of retirees that are living longer and longer against those who do not have pensions. I prognosticat that SWA will continue to grow and will go intl and be as big as AA in 10-15 years. In that scenario you will have AMR competing against SWA. AMR will be paying pensions to a group of retirees which will be double than what it is now. SWA meanwhile will be chugging along making their 401k contributions to the current workers. SWA will be free and clear of the pilots on their payrolls right now while AMR will not be. That's not a level playing field and Congress has to act or millions of people will lose everything when AMR (and companies like them go bankrupt).

Like someone said before, I will gladly take A plan benefits when I retire. I am certainly not expecting them to be there though.

 

[capt. megadeth]

The fact that our plan is tied in with the manager's plan is a great incentive for ups not to do away with it.

You know what 7576? I thought that too and I brought it up to my fiancee. Well, my joy was quickly crushed when he says, "That doesn't mean anything. All they have to do is dump everyones pension plan and give the manager's huge bonuses to make up for it. They will find a way out of it." I thought about it and maybe I am really paranoid, but I wouldn't be surprised if this (or something else the company dreams up) happens one day. Basically, if it's there, great but I am not going to be surprised if it's not. I don't put anything past airline management anymore.

 

[AC560]

How Big do you think the Govt will allow the B Plan, 401 K contribution get before they start taking their bite? Not big enough to make up for the loss of an A Plan.

For 2007 it is $15,500 with a $5000 additional if you are over 50. The government doesn't get a bite of either plan until you begin to collect on it. You pay taxes on income derived out of a 401K or a defined plan. The government always gets their cut.

Also, a A Plan pays for itself when well managed and the company isn't borrowing from it.

How well it pays is dependent on how much of your compensation is in A plan contributions in exchange for that $3k per year. The pension isn't a benefit it is part of your salary so you need to look at the numbers to determine what rate of return you are getting for your salary contributions over your career.

 

[Aviator7576]

Aplan

Mega...

I know you must adore your bf, but companies cannot just "dump" their pension plans. Those pension obligations are just those, obligations. Aside from ups going bankrupt, which I don't see happening even in YOUR lifetime, much less mine, the A plan is as safe as we keep it in our future contract negotiations. Talk to Jim M. who is as much an expert on pensions as anyone here at the IPA. He has posted on the b&g to allay some of the concerns over age 60 vs 65 vis a vis the A plan. The fact that the money is tied in with the manager's money makes it very unlikely they can reward them without having to reward us at the same time.

I know you young pups want to get as much money and control it for the rest of your career...that is a good thing. But right now the limits on the money are such that when you max out (and it won't be that long) for your B plan and 401k, you still need more. Don't throw away the A plan on promises of a better B plan. Right now we are at 12%; our plan would be maxed out at 13.1% with a full 401k contribution. Never give away something until you have something better in hand.

JMO

Aviator7576

 

[AC560]

but companies cannot just "dump" their pension plans. Those pension obligations are just those, obligations.

Actually they can and do; IBM, Verizon being some of the examples. In some cases this works out good for the employees in other cases it doesn't. You won't end up with nothing but you could end up with a lot less then you thought you would have.

The other problem with defined plans is that when they become over funded (i.e. they are generating more return on investment then necessary to cover promised benefits) most companies write that money to their bottom line. GE wrote something like $1.5B into the bottom line a couple of years ago. So instead of the workers who paid into that plan getting better benefits, GE management got a payday. You don't see as much of this today but in the 90's it was accounting for 50+% of companies profits thanks to the hot stock market.

 

[L'il J.Seinfeld]

Jim M also has issues. I'll roll the dice and do my own research. If JM had succeeded our peers at FedEx would be making even more than our junior FOs make now.

UPS can't dump our A plan, but the US Congress can.

 

[Aviator7576]

Aplan

AC560...

Those plans that you referred to were not with employee groups that had a labor contract. Companies can and will change conditions of employment at their whim...that is why we have a contract.

LilJ...

You may have issues with JM and his plan for bringing fo's to parity. But last contract we were sold a b-scale by Bob M...it takes a lot of money to fix it once you get that far behind. JM is very smart on the pension plans (not only us but the competition) and did his best in all areas. If it didn't please you, Don L and his rants about getting rid of the A plan didn't please me either. CA top end pay and A plan took a hit to get you FO's up to parity. And if you think congress will just cancel A plans, you need to take off your tin foil hat, uncover your windows and go out for some fresh air.

JMO

Aviator7576

 

[L'il J.Seinfeld]

AC560...

Those plans that you referred to were not with employee groups that had a labor contract. Companies can and will change conditions of employment at their whim...that is why we have a contract.

LilJ...

You may have issues with JM and his plan for bringing fo's to parity. But last contract we were sold a b-scale by Bob M...it takes a lot of money to fix it once you get that far behind. JM is very smart on the pension plans (not only us but the competition) and did his best in all areas. If it didn't please you, Don L and his rants about getting rid of the A plan didn't please me either. CA top end pay and A plan took a hit to get you FO's up to parity. And if you think congress will just cancel A plans, you need to take off your tin foil hat, uncover your windows and go out for some fresh air.

JMO

Aviator7576

Up to parity!!?? How can you state such a thing? Our peers at FDX are making 30k per year more than we are flying the same airplanes! Our top Capts are making the same as FDX capts. I am very grateful to DC and CD and am glad that Tom and Jim did not get away with what they tried to do.

 

[AC560]

Those plans that you referred to were not with employee groups that had a labor contract. Companies can and will change conditions of employment at their whim...that is why we have a contract.

And all management has to do once you have retired is dangle a little carrot in front of L'il Jerry and he is voting to cut you off (or at the very least kill your COLA adjustments). I was merely making the point there is nothing legally that stops them from doing it.

With a defined plan you not only have to trust management (which nobody in a union does) but trust all your union members (which based on my experience most union people trust their own members less then they trust management). I am not advocating you giving up compensation just saying you would probably be better off putting that compensation under your control as opposed to the control of other people.