Pension
- Thread starter SKYROCK
- Start date
BobDDuck
Island Bus Driver
I hate to break it to you, but it doesn't actually work like that.
A pension requires coverage of forward looking liabilities to cover the future costs to the plan. It relies on a large pool of money, gaining interest (at an assumed rate, normally between 5% and 8%) to cover this amount. The actual pension account is very rarely funded at 100%. There are laws in place that specify how much (percentage wise) has to be in the account.
Because the pension doesn't exist at this point in time on United's books (it's all born by the PBGC), United would be starting from scratch and having to fund almost the whole thing as there isn't much a present value benefit with everything due right now.
Finally, even if it did happen, there would have to be offsets for anything put into 401Ks by United (which for the pilots I think is 16%?) as otherwise they'd be double dipping.
A pension requires coverage of forward looking liabilities to cover the future costs to the plan. It relies on a large pool of money, gaining interest (at an assumed rate, normally between 5% and 8%) to cover this amount. The actual pension account is very rarely funded at 100%. There are laws in place that specify how much (percentage wise) has to be in the account.
Because the pension doesn't exist at this point in time on United's books (it's all born by the PBGC), United would be starting from scratch and having to fund almost the whole thing as there isn't much a present value benefit with everything due right now.
Finally, even if it did happen, there would have to be offsets for anything put into 401Ks by United (which for the pilots I think is 16%?) as otherwise they'd be double dipping.
hook_dupin
Well-Known Member
The law does not work this way.
Cptnchia
Dissatisfied Customer
How many of those siggys are actually cognizant of the law? Plus, and more importantly, WHY IN THE HELL WOULD ANYONE WANT TO GIVE UP A 401K TO GO BACK TO A PENSION? I'm on track to retire with more than the pension would have ever paid me. It's my money and the company can never hold it hostage like they did the pension last time.
A Life Aloft
Well-Known Member
typhoonpilot
Well-Known Member
Check back with us when you are 65 and retired. You're honestly saying that you will have a monthly check equivalent to 50-65% (depending on previous airline contracts) of your final average earnings without having to worry about running out of principal before you die? If so, good for you, but you would be in an incredibly small minority.
The theft of employee pensions by big corporations was and is one of the biggest travesties to labor of the late 20th century/early 21st century. Read "Retirement Heist" by Ellen Schultz.
Typhoonpilot
SlumTodd_Millionaire
Most Hated Member
typhoonpilot said:
It only takes about a 13.5% contribution for 25 years to match a 60% FAE pension.
Until the laws change to protect pensions, you'd be crazy to prefer an A Plan.
Cptnchia
Dissatisfied Customer
Yes I am. Flying is actually a third career for me. I used to be a stock broker and worked in finance in the 80s. Unlike most airline pilots, I'm very financially responsible!
Me in the 80s:
B767
Well-Known Member
It's not that hard. I'm on track to get 60% of my average earnings by only pulling out 4% per year. Of course this number will be much higher if I get hired at a legacy before 2023. This number will also be much higher if I upgrade before 2020. I aimed low in my assumptions.
BravoHotel
Well-Known Member
What other pensions are there besides the gubment and the choo choo?
Cherokee_Cruiser
Bronteroc
Work work work A fund work work work
Blackhawk
Well-Known Member
The pension train wreck was a long time in coming and anyone honestly looking at the numbers understood they could not be sustained. I remember reading finance articles in the 1980s and 90s that talked about the issue and predicted bankruptcy for the auto makers, airlines and other industries as the only means of dealing with the problem- now way would labor give them up outside a bankruptcy court.
Personally, give me a good 401(k). I'd also like to convert my pitiful Social Security Ponzi scheme to a TSP.
Personally, give me a good 401(k). I'd also like to convert my pitiful Social Security Ponzi scheme to a TSP.
SlumTodd_Millionaire
Most Hated Member
Blackhawk said:
Well, the pensions were well funded until Reagan gave a gift to corporations allowing them to underfund their pensions.
And yet pilots at the legacies will continue to vote Republican.
CFIscare
Well-Known Member
Since when does that matter to people?
Cherokee_Cruiser
Bronteroc
2016 is going to suck. It's between Hillary, Carson, or Trump (Trump, I can't believe I'm even writing this).
Retirement, that's a funny word
Blackhawk
Well-Known Member
What executive action was that?
SlumTodd_Millionaire
Most Hated Member
Not to get OT, but Sanders is still in the running. As are Bush and Rubio.