August/September 2013 Fleet Discussion

[roabilly]

Another thing to consider in this argument is the “what if” of divorce. In some states 401ks are community property to divvied up between the two parties. Pension plans are sometimes recognized differently in some of these states resulting in better protection of the post retirement dispursments.

 

[freedom]

I talk a lot of Trash when it comes to the pension ... but I still think it's worth having ... As Prez and others have stated a three pronged approach to retirement is important ....

* this doesn't mean I now suddenly have unconditional faith in the pension , I don't and still think it's going to take a hit someday ....

 

[necigrad]

in my experience, senior people generally *are* "biased" (read: prefer) a pension, while junior people are "biased" towards a 401k. Different genrations, different opportunities available.

I think it's less of the first an more of the second. It's not senior vs. junior but younger vs. older. It also, IMO, has less to do with age and more of generation. When my parents were growing up and entering the workforce, they did so with parents that grew up in homes devastated by the depression. Companies offered pensions and that was guaranteed money for life (at least for the most part). Their children (my generation) grew up with pensions becoming less popular and a big press for 401(k)s. That generations children have heard nothing good about pensions, only how they go under and people don't get their expected retirement.

Since those who are from the earlier generations grew up with the concept of pensions they are typically more comfortable with that. In addition, it's more difficult to get a decent retirement out of a 401(k) with only a short investment period compared to a pension. The 'youngins' today favor a 401(k) because they don't get turned over to the PBGC and don't rely on contributions after retirement, whereas pensions do. Because they are younger they are also able to bulk up their account with decades of contributions. Just to put it in perspective, I'm figuring that in a perfect would when I retire from working like in about 25-30 years I'd like to have approximately $4-6 MILLION in savings. Will I get that? Probably not, but it's actually not completely unrealistic to do with decades of contributions; to do so with maybe 10 years would be impossible.

Pensions and 401(k)s are completely different investment strategies, with their own benefits and drawbacks. Only a fool picks one or the other if offered both, and only a fool will depend on others to invest their money or themselves (unless actually qualified, few are) to do the investing.Having the IAMNPF managing my pension is great; in theory they will be far more successful and reliable in managing that money to ensure it's there 50 years from now. Having a 401(k) allows me to play a little, and even still I invest in mutual funds with fund managers that are far more qualified then I. One backfills the other and winds up providing many layers of redundancies.

 

[Tim Nelson]

The whole iampf issue might not even come up if not for the fact that the plan is dependent on increasing participants as more and more are retiring. Sorta like social security.
So, separate from market risks, other risk are becoming just as great, like a dwindling membership participation.
If the ibt wins at usairways mx then i happen to know they will officially campaign at United ramp for 16,000 more iam members. Imo, if there is a vote at united, the ibt will dominate. Thus how well balanced will the iampf be if it loses 13,000 participants in the next 6 months?
Thats my concern. Imo, the iam will win the usairways mx but who knows.

 

[mike33]

I have a simple exercise for everyone here in this thread--Ask everyone you know with ten or more years of service if they have over $200,000.00 accumulated in their 401k plans. If they don’t… the IAM pension has already out- performed their ability to invest wisely, and to be a satisfactory custodian of their own retirement.

Better yet… how many of you reading here have 200k or more… and If you do have that amount, or more… did you make it in less than ten years? If you answer no to either question… the IAMNPF has outperformed your wherewithal and investment strategy!

There are situations that the 401k is far more superior to the pension. Those are far and few inbetween though anymore. The main reason was the fund scandals. Remember about 14 yrs ago or so when we could trade funds unlimited at us airways on a daily basis?. Well usairways fidelity had a fund called Putnam international that followed the Hang Seng / nikkei markets. They all rotated around the US market. so you could transfer funds from the US markets upside to the other markets and buy their downside and when another US downside came you would sell the international funds and buy US funds. That lasted awhile and for 2 yrs my strategy improved my 401k by 49% each year. Yes i have way more than 200k but that investment strategy wont happen again ever because of the rules change.
The bottom line now is that i prefer the pension but hope they up the ante so it gets back to at least 80$ per yr of service.

 

[Tim Nelson]

Retirement plans are a matter of preference. Really not a right or wrong. Thats why i would like our nc to consider the language in the alk contract that allows a choice. Roabily can opt to stay in the iampf and i can opt into a dcp roth.
To move the rate of the iampf to the previous level would take alot more money. Probably another .80 cents or so. Imo id rather have that securely piled into wage or vacation. Iam lowered the iampf rate by 40% with our $1.05 contribution and id hate to be a sucker if we dumped about $2 in the iampf hands only to be lowered again. The damn thing is eating up our future retirement and imo it would be like tossing money into a fire.
What is it called....fool me once?

Remember there is a strong push to allow defined pension money of retirees to be tapped into as well. Every trend of defined pensions is bad news.
Im very uncomfortable, especially not knowing who is going to win the ibt iam vote.

 

[roabilly]

There are situations that the 401k is far more superior to the pension. Those are far and few inbetween though anymore. The main reason was the fund scandals. Remember about 14 yrs ago or so when we could trade funds unlimited at us airways on a daily basis?. Well usairways fidelity had a fund called Putnam international that followed the Hang Seng / nikkei markets. They all rotated around the US market. so you could transfer funds from the US markets upside to the other markets and buy their downside and when another US downside came you would sell the international funds and buy US funds. That lasted awhile and for 2 yrs my strategy improved my 401k by 49% each year. Yes i have way more than 200k but that investment strategy wont happen again ever because of the rules change.
The bottom line now is that i prefer the pension but hope they up the ante so it gets back to at least 80$ per yr of service.

Ohhh… yes… I remember those years! I watched several genius investors plunder their whole 401k balances on US Stock that went poof in BK! They were on the phone daily calling to switch funds in and out… their losses were one of the main reasons for the rule changes!

 

[roabilly]

I think it's less of the first an more of the second. It's not senior vs. junior but younger vs. older. It also, IMO, has less to do with age and more of generation. When my parents were growing up and entering the workforce, they did so with parents that grew up in homes devastated by the depression. Companies offered pensions and that was guaranteed money for life (at least for the most part). Their children (my generation) grew up with pensions becoming less popular and a big press for 401(k)s. That generations children have heard nothing good about pensions, only how they go under and people don't get their expected retirement.

Since those who are from the earlier generations grew up with the concept of pensions they are typically more comfortable with that. In addition, it's more difficult to get a decent retirement out of a 401(k) with only a short investment period compared to a pension. The 'youngins' today favor a 401(k) because they don't get turned over to the PBGC and don't rely on contributions after retirement, whereas pensions do. Because they are younger they are also able to bulk up their account with decades of contributions. Just to put it in perspective, I'm figuring that in a perfect would when I retire from working like in about 25-30 years I'd like to have approximately $4-6 MILLION in savings. Will I get that? Probably not, but it's actually not completely unrealistic to do with decades of contributions; to do so with maybe 10 years would be impossible.

Pensions and 401(k)s are completely different investment strategies, with their own benefits and drawbacks. Only a fool picks one or the other if offered both, and only a fool will depend on others to invest their money or themselves (unless actually qualified, few are) to do the investing.Having the IAMNPF managing my pension is great; in theory they will be far more successful and reliable in managing that money to ensure it's there 50 years from now. Having a 401(k) allows me to play a little, and even still I invest in mutual funds with fund managers that are far more qualified then I. One backfills the other and winds up providing many layers of redundancies.

I hear ya Grad…

The average 401k balance for a 55 plus American is now $255,000.00! This observation of course is an average, and it has doubled since 2009 due to the soaring markets. Now… let’s think about this… 255k as you near retirement sounds awesome, but the IAMNPF has already matched that since inception! If you achive the 4 to 6 million (and I hope you do) you will be a small sliver of the overall pie. The vast majorities of Americans are substantially under funded for retirement, and will work well into their late 60’s or early 70’s!

I contended that 401ks were a sham when I was in my 20's-- so... it's not an age issue!

 

[roabilly]

This post will conclude my 401k arguments…

One thing that is never discussed is the ability for employees to raid their 401k plans. This has cost 25% of Americans dearly. Essentially, people are taking hardships, loans, and early withdrawals just to make ends meet. What this does is cost them in fees and taxes making the plan a high interest loan, not a retirement plan! This is one other reason Corporate America lobbied for the plans… the financial institutions profit from the early withdrawal penalties.

Breaching your 401k (Forbes)

Now… if you remove assets from a 401k early as mentioned above, and absorb the fees and taxes-- to let’s say buy a house or a car… you have opened up a protected asset to civil judgment from creditors. Essentially, retirement accounts are protected form creditors in BK proceedings whereas other assets are not. A great number of the 25% that raided their plans eventually ended up in BK, where the creditors were able to secure portions of certain assets paid for by the 401k withdrawals that orginally would have been safe!

 

[mike33]

Absolutely correct ROA. People think that because you are paying interest of 9 % to yourself on the loan it's a good deal. It's still a loan with no write offs.

 

[Tim Nelson]

Roa, its all assumptions. Can you guarantee me that the iampf wont create a C scale schedule to stick us all on if it loses usairway mx and united ramp participants?
Remember 3 days after losing 15,000 nw participants, the trustees moved "swiftly" to protect the plan and mailed out the "tuffa lucka" letter on december 13, 2010.
Most of what you are talking about Roa is myth.

 

[ograc]

The whole iampf issue might not even come up if not for the fact that the plan is dependent on increasing participants as more and more are retiring. Sorta like social security.
So, separate from market risks, other risk are becoming just as great, like a dwindling membership participation.
If the ibt wins at usairways mx then i happen to know they will officially campaign at United ramp for 16,000 more iam members. Imo, if there is a vote at united, the ibt will dominate. Thus how well balanced will the iampf be if it loses 13,000 participants in the next 6 months?
Thats my concern. Imo, the iam will win the usairways mx but who knows.

When will the votes be counted for the Maintenance & Related election? i agree the results of this election will have rippling effects throughout the industry.

 

[700UW]

Monday August 12th at 2pm the voting ends and results should be known in about 20 minutes after that.

According to the research, it looks like the IAM will remain.

 

[ograc]

Not to change the subject; but I believe we are getting ahead of ourselves. To my knowledge the Mediator has not even scheduled future contract negotiations with the company. Based on the company's posture at the last round of negotiations I believe it's premature to expect the company to offer a choice of 401K, the IAM pension or both. They don't even want to acknowledge past sacrifices of the Fleet service group. We're miles apart in contract negotiations with no light at the end of the tunnel IMO. Although the debate over which is a better option (IAM Pension vs. 401K or a choice of the two) is credible and spirited; we are far from this issue given the current status of negotiations. It's time for the company to take us seriously. It's time for the group to "Lock and Load"! WE NEED A CONTRACT! NOW!

 

[cltrat]

yes we do ograc, til we get one and not some load of crap like customer service has to vote on or worse something like that trash UA had to vote down.All this 401 and pension banter takes a backseat to me