Possible Buy Out Incentive Suggestion

[FLYUSAIRWAYS]

This is just a suggestion for Parker to take into consideration for future employee buyouts. Take Customer Service for example. Any employee with 15 years of service, and age 60-64, in addition to receiving X amount of CASH, they would also receive their Medical Insurance til age 65, when Medicare kicks in. This would really make alot of employees in that age group sit up and take notice. It would also retire alot of topped out agents. What are your thoughts???

 

[cynic]

Medical insurance costs are so high that most, if not all, of the savings would be lost. I don't see any way that they pay insurance as part of a buyout.

 

[FWAAA]

I would agree with cynic. Don't know what the airline spends, on average, per employee, but my medical isurance (CA state government) runs $21k per year. If US spends just half of that, then four years of insurance for a 61 year old would be over $40,000. And the employee will likely want another $40k or more in cash to quit. I don't see Parker being that generous.

 

[necigrad]

Allow retirement flight benefits and give $100,000 at 15 years or more regardless of age and I'd leave. No thought required.

My logic is that at my rate they'd recover the $100,000 in two years (I'm a FSA) and I'm not currently meeting the age+ service equaling 65. I wouldn't leave just because of flgiht bennies, thus the money is necessary to entice my leaving.

 

[Tim Nelson]

Buyout at both delta and united had an attachment of health care.

 

[Kev3188]

Not sure what UA's package involved, but at DL it was $10k per year (up to a max of $120K, IIRC) to be used solely for medical insurance/expenses. They held the money, and you submitted expenses to be paid out of the fund.

FWAAA & Cynic have a point about the costs involved, but I think companies come out ahead over the long term; especially at DL, where they can replace a topped out, benefitted employee with a Ready Reserve employee that has no benefits except for pass travel.

 

[usa1]

Most over 55 qualify for health insurance through the PBGC/HCTC. Add a supplemental retire plan ($ monthly) to bridge us from 55 to age 62 or 65 would retire many.

 

[Kev3188]

FWIW, to qualify for what I listed above, you had to:

*Be at least 50 yrs. old

*Have at least 18 years of service

*Have a combined "age" (years of service + age) of 73.

There was also 20-39 weeks of severance pay, depending on years of service.

 

[usa1]

I don't ever see an early out being offered. But there are a lot of customer service agents that planned to leave on their original DP requirement date, at age 55. Would need to bridge those over 55 until age 59 1/2 or 62 with a monthly supplemental retirement check. US Airways C/S employees could get healthcare through PBGC/HCTC pension agreement. PBGC/HCTC cost the company nothing. And getting rid of these older employees would save the company BIG bucks in healthcare cost. It's a no brain'er. And the saving has to be placed in the employee monthly supplemental check.

 

[FWAAA]

FWAAA & Cynic have a point about the costs involved, but I think companies come out ahead over the long term; especially at DL, where they can replace a topped out, benefitted employee with a Ready Reserve employee that has no benefits except for pass travel.

I certainly agree that an early out program can produce long-term savings - I just don't think Parker will write checks for $100k each. How's that go - "price of everything, value of nothing?"

I think that necigrad's estimate of $50k annual savings (two-year payback of $100k buyout) might be a little optimistic - new hires earn a lot less, but there are training costs and a period of lower productivity that eats some of the savings in the first year or two.

 

[FLYUSAIRWAYS]

Then again too, just the thought of having to spend 2 weeks in DFW learning Sabre again, is enough to make the 60 year old agents sign their retirement papers in a heartbeat.

 

[UPNAWAY]

My guess if there are no big immediate needs to cut head count they will not offer a buy initially. But that could come down a few years later after the integration is all done to try and save some money and replace older workers with new hires.

 

[supercruiser]

Most over 55 qualify for health insurance through the PBGC/HCTC. Add a supplemental retire plan ($ monthly) to bridge us from 55 to age 62 or 65 would retire many.

PBGC/HLTC program is being terminated at the end of this year, so can't count on that.

 

[Crash Pad DCA]

Not sure what UA's package involved, but at DL it was $10k per year (up to a max of $120K, IIRC) to be used solely for medical insurance/expenses. They held the money, and you submitted expenses to be paid out of the fund.

FWAAA & Cynic have a point about the costs involved, but I think companies come out ahead over the long term; especially at DL, where they can replace a topped out, benefitted employee with a Ready Reserve employee that has no benefits except for pass travel.

Really p*ss poor pass travel benefits...IIRC Ready Reserve only gets 30 flight days of free flight travel....After that, pay to fly. Oh! and a flight that leaves one day and arrives the next day counts as two flight days! And strictly only 14 TATL trips/year..paid or unpaid. DL is really making out well with Ready Reserve (no sick, no vacation, etc.)

 

[700UW]

Wasnt the HCTC not renewed?