What does SWA offer for retirement plans? Pensions? 401K? profit sharing?

[ThisistheDream]

Does SWA have a defined pension plan for there retiring pilots? If so is it similiar to what the legacy airliness once had, since now they are being taken away? Or does SWA just have a good 401K match with company profit sharing or stock options? From what I know most LCC dont have any type of pension plans which maybe be another reason how LCC save so much and make more now?

 

[Chest Rockwell]

No defined benefit plan (pension). 401(k) with company match up to 7.3%. Just a guess, but I believe that profitsharing has averaged around 8% the last ten years (e.g. if you make $100,000, your ps contribution would be $8000). Current number of stock options depend on when you were hired. CR

 

[ThisistheDream]

How about when your retired at SWA, at this point does SWA still give you anything for retirement living or do you live on what you saved, your 401k match and profit sharing contributions that you recieved all while flying at SWA. What I am trying to get at is the legacy airlines pension paided on average of 80% of your last 3 years earnings for like 20 years after retirement so to say 150,000 a year you got after your done flying. Does SWA give you anything after your done flying? If not this would and does equate to billions in savings for SWA vs. the traditional Pension the legacy carriers had and another advandage SWA has that has made them very succesful

 

[Jim Smyth]

Your 401K and Profit Sharing is it so you have to plan appropriately. You live on what you saved in these plans, no pension or pension liability either. SWA also has another plan for medical insurance. You can cash in trips in your sick bank if you have any left to provide medical coverage for you and your spouse. It's prorated and basically the short version is you need about 5 years worth of accumulated sick back to cover the 5 years of medical insurance needed to age 65 for Medicare to kick in. If your wife is alot younger than you are like mine is ( 7 years younger) you need to have extra trips to cover her to age 65/Medicare. I will need essentially 11 years worth of sick bank. So if you are employed here long enough and dont go off with a medical condition you should be in good shape.

 

[Falconjet]

TITD:

The answer to your question is no, SWA does not offer a pension when the pilots retire.

FJ

 

[airbaker]

I believe that American Airlines equates their A plan value (ie DB plan) at about 7% of a pilot's compensation. In addition, AA has a B plan that equals 11% of your compensation, for a total retirement value of around 18%. It could be argued that Southwest's 401K match at 7% is equal to the value of a traditional "A" plan. And their "B" plan comes in the form of profit sharing and stock options.

Personally, I'd rather have complete control of my money from the start - and not depend on the goodwill of management to secure my retirement moneys. JMHO

 

[TexaSWA]

TITD:

The answer to your question is no, SWA does not offer a pension when the pilots retire.

FJ

And other companies dont match dollar for dollar your first 7.6% of your 401 contributions, give profit sharing that has averaged close to 12% of your income, and give stock options.

Southwest makes contributions that on average are close to those that the "legacies" make. Differences are the contributions are made directly to the employee instead of some "pension fund", and it is productivity based.

Bad news: If times are tight we dont get as much (of the profit sharing anyway)

Good news: Funds are held by and controlled by the employee and cannot be taken away.

Traditional pensions may be safe for FedEX and UPS, but given the volitility of the pax side, ill take our plan.

 

[chase]

maybe some answers...

Thisisadream,

Here are some threads (some dated info but other info is still pretty accurate) that maybe of some use. Good luck....

Profitsharing Thread info

http://forums.flightinfo.com/showthread.php?t=19405&highlight=401k



Stock Options



http://forums.flightinfo.com/showthread.php?t=19464&highlight=401k



Defined Benefit Plans vs. Defined Contribution plans….the date is interesting, the timebomb was talked about years ago….



Some discussion threads on 401K…some info is slightly outdated because we have added some other funds & taken some out.



http://forums.flightinfo.com/showthread.php?t=15865&highlight=401k+SWA

 

[Gearup727]

You don't retire from SW you just leave.

 

[Falconjet]

TexaSWA: I am a big SWA fan. You can take a look at my past posts and discover that. I wasn't implying anything negative about SW, I was just trying to point out to ThisistheDream that his/her question had been answered in the original response. Just figured I'd cut to the chase.

(ok, pun intended)

SW rocks.

FJ

 

[TexaSWA]

TexaSWA: I am a big SWA fan. You can take a look at my past posts and discover that. I wasn't implying anything negative about SW, I was just trying to point out to ThisistheDream that his/her question had been answered in the original response. Just figured I'd cut to the chase.

(ok, pun intended)

SW rocks.

FJ

I didnt think you were implying anything negative, just wanted to expand on your concise (consice?) responce. What we have is just like what everyone else has, except its different. Didnt mean to sound like I was being defensive. I am familiar with your posts for the past year or two. I know youre not a hater.

 

[TexaSWA]

You don't retire from SW you just leave.

You're right, freight dog, but it's just so much DANM FUN!!!

Now to bed with you!

I know you have a 2am departure, and there are Little Johnnys all over the world that are depending on you to get their Christmas presents delivered on time!

We wouldnt want them all to find out the truth about Santa, would we?

 

[ThisistheDream]

With the way things are going now with airlines throwing pension plans out the window, I would rather have a good 401k match and profit sharing bonus that goes to the employee so you control it and can't have it taken away which sounds like exactly what SWA has. But on the other hand when times where good at the UAL, USAIR and the pensions there where still ongoing, could it be said that those pension out weighed the SWA 401k match and profit sharing bonus by a huge margin. If a retired UAL pilot was getting 150,000 a year from UAL in a pension where as SWA pilot who retired the same day got Zero from that point on, this must save SWA Billions a year by not having a defined pension plan. With all the concessions and now pensions possibly going away at the Legacy airlines, I would think that the legacy carriers are soon going to be very competitve with the likes of SWA, Jet Blue, Airtran. The pay for similiar equipment is very close, (some new LCC have a lot less years of service for pay rates with CAPTand FO's on 5-8 year pay vs. a UAL 737 CAPTor FO on 15yr pay)but they will catch up in 5 plus years) and with the savings of no pensions to pay the retirement benefits would be very close to the same having 401k match etc. there are still alot of others factors but, when the playing field becomes even then what will happen?

 

[Jim Smyth]

Someone once said that you could take all the money in the world and divide it evenly among the people. In a year from that point the same people that are now broke would still be broke again and the people that are well off now will prosper again. It's an attitude thing that goes straight to your soul. Thats why at SWA they interview the way they do. They know they can teach anyone to fly a 737 the SWA way but you have to have the mindset, heart and attitude. I don't forsee any big changes in the future for us. Yes competetion will increase but this is nothing new for us and if things change we will adapt and over come.