JCBA Negotiations and updates for AA Fleet

[WeAAsles]

Allow me to cut-and-paste, edit, and add a few details to what I previously posted...

If the approximate $80/month benefit, per year of service, is cut to only $40/month as permitted under Kline-Miller. Let's assume the employee is one year to retirement and one year in the pension equals $480 a year ($40 x 12 months) and the company contributes $2,200 (approx. $1.05 x 2,080 hours) to the IAMNPF. Let's further assume a 15-year life expectancy after retirement.

By conducting a Net Present Value (NPV) calculation at 15 years of $480 in annual payments with an investment of $2,200 at 10%, it is still $1,450 positive. If it result was $0 NPV would be break even for the expected/required rate of return of 10%. To be more exact as to the rate of return by the IRR (Internal Rate of Return) method with those same numbers, the return is still over 20%! Better than the long-run returns of most mutual funds!

Under the scenario I created, the pension would need to drop to about $20/month per year of service, just to equal a reasonable estimate of a typical expected rate of return for a mutual fund at 10% annually. That's nearly a 75% reduction in pension benefit before one would be indifferent to either the IAMNPF or a company 401K! Does anyone realistically think the pension will be slashed down to $20/month per year of service?

Now my college professors way back when use to say that if we cannot quantify it, then we cannot prove it. As I have met my burden of proof as to my assertions, I look forward to either of you to provide some financial analysis to the contrary.

(For the record, I do NOT support the pension outside some very limited situations, as in the case of those people who are very close to retirement.)

Curious? I have between 10 to 12 years before I chose to retire. Do you support me in the plan?

And I'm still leaning towards the way they have it over at UAL Fleet myself.

 

[Albert]

Curious? I have between 10 to 12 years before I chose to retire. Do you support me in the plan?

And I'm still leaning towards the way they have it over at UAL Fleet myself.

Weez your better off in a pension you'll blow the whole 401 the second a pretty girl shakes her a$$ at you

 

[Traymark]

Decent question.
If I was Garcia, I'd ask the company what is the cost to include the IAMPF for LAA folks that would prefer it to an enhanced 401K.
My initial ask would be for an industry leading 401K contribution.
If the inclusion of an option for some to go into the IAMPF lowers that contribution or makes it a match and also lowers it, then I would reject it because I believe the industry leading 401k contribution is whats in the best interest of the membership now and in the long run.

You can disagree with that, fine. That is what I would do and I'm confident financial experts would back me up that the 401K is a much stronger vehicle for retirement than the IAMPF as it currently stands.

That fund is in poor shape. In fact , before the TWU advocates any of it's members going into it, there should be a full independent audit by a credible financial entity, of the health of that fund in real numbers, not the phony ones they throw around to the low information voters.

Multi employer pension funds are the weakest of all pensions = fact.

 

[WeAAsles]

Weez your better off in a pension you'll blow the whole 401 the second a pretty girl shakes her a$$ at you

You have me mistaken with the Ice Cream truck driver.

 

[WeAAsles]

Decent question.
If I was Garcia, I'd ask the company what is the cost to include the IAMPF for LAA folks that would prefer it to an enhanced 401K.
My initial ask would be for an industry leading 401K contribution.
If the inclusion of an option for some to go into the IAMPF lowers that contribution or makes it a match and also lowers it, then I would reject it because I believe the industry leading 401k contribution is whats in the best interest of the membership now and in the long run.

You can disagree with that, fine. That is what I would do and I'm confident financial experts would back me up that the 401K is a much stronger vehicle for retirement than the IAMPF as it currently stands.

That fund is in poor shape. In fact , before the TWU advocates any of it's members going into it, there should be a full independent audit by a credible financial entity, of the health of that fund in real numbers, not the phony ones they throw around to the low information voters.

Multi employer pension funds are the weakest of all pensions = fact.

So you just completely admitted that you wouldn't be a Union Leader and let your members decide when it comes to this issue but that you would be a dictatorship of one.

Isn't that the same complaint you and others had about Jim Little when he entered into the Association without a membership vote?

Jim Little was King and you would be too.

 

[Jester]

Curious? I have between 10 to 12 years before I chose to retire. Do you support me in the plan?

And I'm still leaning towards the way they have it over at UAL Fleet myself.

A decade out? I would stay with the 401K, especially given the risk of the pension reducing benefits. That's just a guess. For more complete analysis we would need to separately take the Future Value of the employer share of the contributions up to retirement date . (I exclude the employee's contribution as that could be handled separately in an IRA, as to make a comparison against only the employer contribution as with the pension.)

The estimated future value at retirement could then be compared against the pension as a starting point going forward. At this point, we could run different scenarios as to life expectancy, expected rates of return and reduction of future monthly benefits with the pension. By discounting the estimated pension payments at time of retirement with a NPV calculation, if the pension NPV is larger than the estimated future value of the 401K at retirement, then the pension would be a better option.

So I am going to completely pull numbers from my ass... if the employer's share of the 401K 10 years from now along with compounding returns on investment had a future value of $100,000 we would compare that to the discounted cash flow of the pension. Let's say $80/month x 10 years of service = $9,600 annual benefit (again this part of playing with the assumptions of future pension reductions), and a 15-year life expectancy (another assumption to play with) let's discount the future cash flow into the present value with a 10% rate of return (another playful assumption). The pension's discounted cash flow at retirement date would be approximately $80,320 NPV. As the future value of the $100,000 401K is greater than the discounted cash flow value of the $80,320 pension at retirement date, then the 401K would be a better option.

If you want to have some fun with discounting cash flows, you can use this free online tool... http://www.calculatorsoup.com/calculators/financial/present-value-cash-flows-calculator.php

 

[WeAAsles]

A decade out? I would stay with the 401K, especially given the risk of the pension reducing benefits. That's just a guess. For more complete analysis we would need to separately take the Future Value of the employer share of the contributions up to retirement date . (I exclude the employee's contribution as that could be handled separately in an IRA, as to make a comparison against only the employer contribution as with the pension.)

The estimated future value at retirement could then be compared against the pension as a starting point going forward. At this point, we could run different scenarios as to life expectancy, expected rates of return and reduction of future monthly benefits with the pension. By discounting the estimated pension payments at time of retirement with a NPV calculation, if the pension NPV is larger than the estimated future value of the 401K at retirement, then the pension would be a better option.

So I am going to completely pull numbers from my ass... if the employer's share of the 401K 10 years from now along with compounding returns on investment had a future value of $100,000 we would compare that to the discounted cash flow of the pension. Let's say $80/month x 10 years of service = $9,600 annual benefit (again this part of playing with the assumptions of future pension reductions), and a 15-year life expectancy (another assumption to play with) let's discount the future cash flow into the present value with a 10% rate of return (another playful assumption). The pension's discounted cash flow at retirement date would be approximately $80,320 NPV. As the future value of the $100,000 401K is greater than the discounted cash flow value of the $80,320 pension at retirement date, then the 401K would be a better option.

If you want to have some fun with discounting cash flows, you can use this free online tool... http://www.calculatorsoup.com/calculators/financial/present-value-cash-flows-calculator.php

Ah but you're leaving out one big caveat my friend. The fact that I am already past target on my 401k future disbursement even with a more modest rate of return than average. AND the wages I expect to receive moving forward that I'm going to divert into an even larger contribution to my 401k or else maybe make extra payments on my mortgage freeing up more cash flow in my future.

The IAMPF I see as a non expected extra asset already if I gain access and will be utilized separately for more frivolous expenses.

So again for me it's not about where I expect to make (always gambling) the most money but how I allocate the money I make to maintain my lifestyle. The accumulation of wealth is not how people should be playing this game.

 

[Albert]

Ah but you're leaving out one big caveat my friend. The fact that I am already past target on my 401k future disbursement even with a more modest rate of return than average. AND the wages I expect to receive moving forward that I'm going to divert into an even larger contribution to my 401k or else maybe make extra payments on my mortgage freeing up more cash flow in my future.

The IAMPF I see as a non expected extra asset already if I gain access and will be utilized separately for more frivolous expenses.

So again for me it's not about where I expect to make (always gambling) the most money but how I allocate the money I make to maintain my lifestyle. The accumulation of wealth is not how people should be playing this game.

You make it sound like you own a mansion and a yacht and a string of poloponies . Weez you live in a bachelor pad and eat Velveeta sandwiches every night and thats when you are splurging

 

[Traymark]

So you just completely admitted that you wouldn't be a Union Leader and let your members decide when it comes to this issue but that you would be a dictatorship of one.

Not so fast my friend,
I was assuming I was a leader of a duly elected union.
The one we currently have has not been elected , they were forced on us, that is different, not the same and the main reason I was screaming for a representation election.

Once the union is elected by the membership, they have the authority to make decisions, yes, but I also said, the pension fund should be audited before the TWU advocates for anyone to enter into it, I noticed you didn't comment on that as an audit doesn't fit your narrative of a "dictatorship of one"
Fail.
Thanks for playing.

 

[Traymark]

Here's my bet.
You'll have less people among the membership complaining about not getting into the IAMPF if they instead bring back a real industry leading 10% contribution for the 401K instead, than if they force us into the pension fund and keep the match the same.

 

[WeAAsles]

You make it sound like you own a mansion and a yacht and a string of poloponies . Weez you live in a bachelor pad and eat Velveeta sandwiches every night and thats when you are splurging

Again I "chose" to buy a modest, no thrills, decent sized Condo rather than that Mansion that many others feel they need to have just because the Credit Union approved the (In deep debt) loan.

No Yacht, cool car and can't stand melted cheese.

 

[WeAAsles]

Not so fast my friend,
I was assuming I was a leader of a duly elected union.
The one we currently have has not been elected , they were forced on us, that is different, not the same and the main reason I was screaming for a representation election.

Once the union is elected by the membership, they have the authority to make decisions, yes, but I also said, the pension fund should be audited before the TWU advocates for anyone to enter into it, I noticed you didn't comment on that as an audit doesn't fit your narrative of a "dictatorship of one"
Fail.
Thanks for playing.

The TWU does have its own actuaries and financial wiz kids. Have you ever spoken to Gary or Dale to ask them if maybe they have done those audits already?

And he'll "probably" be officially elected in September as for now he was appointed by the IEC. The IEC are Presidents and others that yes you did elect.

But again you did say you would be the same dictator you considered Jim Little to be.

You can't weasel around that. YOU would not allow ME a choice.

 

[Albert]

Here's my bet.
You'll have less people among the membership complaining about not getting into the IAMPF if they instead bring back a real industry leading 10% contribution for the 401K instead, than if they force us into the pension fund and keep the match the same.

What's 10% of your salary? Did you figure it out yet? well you ain't getting that number

 

[Traymark]

I'd let you choose your representation with a vote.
We never got that choice and that is at the heart of what we are going through now.

 

[Tim Nelson]

Here's my bet.
You'll have less people among the membership complaining about not getting into the IAMPF if they instead bring back a real industry leading 10% contribution for the 401K instead, than if they force us into the pension fund and keep the match the same.

Why are you even talking about this? A 5.5% 401k is a complete joke if that's one of the choices. A company contribution should be at least 8+%. If they come back with a choice of 5.5% or $2.50 in the IAMNPF then the IAMNPF is the better offer. But if they did that then it would be a 'tipped hand' since the 5.5% doesn't represent a $2.50 company contribution. 5.5% would be $1.75 company contribution.

As far as retirement, I think the benefit should be $7,000+ a year. It used to be about 10%, back in the day.
Also, life insurance used to always be one year's salary. Ours at LUS is $25,000 I believe. That needs to be upped to $65,000 using the one year pay bar.

As much as we complain, most of my complaints are about the lack of choice. As I think we will be getting an overall good contract very soon.