Pension Calculator or Jetnet

[jimntx]

Certain company cheerleaders are claiming that only pilots and management will be hurt by dumping the pension plans on the PBGC. That "you will receive every dime that you would have gotten anyway".

Well, not according to the Pension Calculator that the company has provided on Jetnet--the employee website portal. If I were to retire on 12/31/12 and start my pension on 1/1/2013 AND the company still has the pension plan, I would receive approximately $495/mo. If I have the same last day worked (actual) and pension start date, but the PBGC has the pension, I will received only $420/mo--a reduction of over 16% in the monthly benefit--because the last day worked will be 11/29/11 regardless of when I actually stop working.

However, I am only a short-timer. I just got my 10 years in January. (And, yes I realize that I was vested at 5 years, but I would not have been eligible for any other benefit--like retiree travel--until last month.)

It would be interesting to see what effect dumping the pensions on the PBGC would have on long-term AA employees. Anyone else willing to go to Jetnet and run the numbers? Do a regular pension estimate using some dates in the future--for instance, last day worked--12/31/12, pension start date--1/1/2013. Then do a PBGC estimate using the same dates--just check the PBGC box.
(Remember that a PBGC estimate will force 11/29/2011 into the last day worked field. You will still need to provide a pension start date.)

It would be particularly interesting to see the effect upon those of you who have the years but are not old enough yet to retire; so, use a pension start date for the month after you turn 60.

You don't need to post the actual numbers--a rounding error or two will not be significant. Just give us approximate numbers, but to keep one of the cheerleaders from calling you a liar, make sure your numbers are honest, if not exact.

Even if you don't want to post the numbers here, you need to do this for your own protection and retirement planning. Your monthly benefit is going to be less if the PBGC takes over.

P.S. The thread title was supposed to be Pension Calculation on Jetnet. Sorry about the typo.

 

[FWAAA]

It appears that you (like many) are confusing two separate amounts: one is the amount of pension you earned as of 11/29/11 and the second is the amount of pension you would have earned for futute work (beyond 11/29/11) if the plans are not terminated.

When pensions are terminated (or frozen via a hard freeze), the benefit accrual stops on the date of termination or freeze, and in the case of bankruptcy, the PBGC deems that date to be the date of the bankruptcy filing.

Of course, your pension does not exceed the PBGC maximum guarantee for someone your age, so the PBGC limits do not affect you - much like they won't affect most employees (except for pilots and management).

 

[limit]

Only accrued benefits as of november are not lost and as long as you start collecting after you turn 60 you will not loose anything accrued.
In your case, and everyone's really you lose any further accumulation you would have had by retiring 1,2,5 or whatever the case might be, years from now.
Nobody is talking loss of future benefits, those will be gone forever.Accrued is the key word here.

 

[limit]

Now if you want to know my future pension loss the way you figure it out, the difference between accrued and future, at age 67 for me, would be almost 12000 per year
Good luck getting anywhere close to that with a 5.5 match on the market.

 

[eolesen]

Anyone else willing to go to Jetnet and run the numbers?

I'd love to, but apparently it's not available to former employees affected by this, and HR has yet to respond to me on it.

 

[jimntx]

There is a far cry between "you will not lose a dime" and "you will not lose accrued benefits." Also, that is just semantics. If my monthly benefit is reduced by 16% in perpetuity, then I am losing benefits I would have collected otherwise--regardless of whether this year is included in the calculation or not. If the company is forced to keep the pensions, my monthly benefit will continue to increase as I continue to work. If the PBGC takes over the pensions, my pension amount will be $425/mo, period.

If you were being honest, you would say, "You will not lose any benefits as long as you retired the same day the company filed for bankruptcy." There is a difference.

By the way, to everyone else, I gave an incorrect instruction earlier. If you run a PBGC estimate you can not enter a pension start date. You have to enter a whole age for the start, and the calculator assumes the start date of the pension to be the first day of the month following your birthdate. For instance, if I enter 68, then the calculator plugs in a start date of 4/1/2013.

 

[DallasConehead]

For me a 25 year mech, I will get all I have earned since that amount falls below PBGC max chart rate. This is at ages 60 and 65, and the PBGC payout is the same for both ages. There is a cut if I go at 55 of approx 225/month because PBGC chart is less for that age.

The problem right now is I am not accruing time in any pension and not getting any match at this time assuming 11/29 will be the stop date. So the longer this BS goes on the more the hit. If I had the extra $$ I would up 401k from 15% to 20% but it isnt in cards right now.

 

[Wretched Wrench]

For me a 25 year mech, I will get all I have earned since that amount falls below PBGC max chart rate.

With AA's default, (the largest ever) the PBGC will run out of money in a very short time.

 

[BoeingBoy]

There is a far cry between "you will not lose a dime" and "you will not lose accrued benefits." Also, that is just semantics.

Well, first "you will not lose a dime" doesn't sound like words any company thinking of terminating pensions would use. All it takes is a rudimentary understanding of what happens when a DB plan is terminated to know that you lose benefits not accrued on the termination date. So anyone surprised that they won't get the same benefit as they would have in 4, 10, 20 or however many years hasn't been paying attention. I would strongly doubt that AA management (or whoever put the information out about losing benefits) would use language that would give the impression that anyone not retired would get the same benefit that they'd have gotten when they did retire if the plan was still in effect.

How specific is the calculator? Do you have to enter your work group or is there separate calculators for each work group? Does it take into account how the PGGC calculates benefits for terminated plans or is it designed to be a ballpark figure? Does it take into account PC categories or use the same calculations for all members of the group(s)?

Jim

 

[usa1]

The company said this month that it wants to trim $2 billion a year from its costs, including $1.25 billion in employee-related expenses.Then AMR wants to move ahead with last year's order for 460 narrow-body airplanes and earlier plans to acquire wide-body Boeing 787 and 777 aircraft. The airline also intends to invest in products and services like lie-flat seats and in-flight wi-fi that high-end customers who pay the most for tickets will find attractive.

http://uk.finance.yahoo.com/news/american-airlines-aims-bolster-routes-195403030.html

At least you know where your lost pension percentage is going ....

 

[WorldTraveler]

Pension calculators like this are fairly accurate and do pull employee-specific information. If they couldn't be specific to each employee, they would not be used, even given the disclaimer that is added at the bottom of every calculation that these numbers are not guaranteed until an actual start date is initiated.
.
The bottom line is that terminating or freezing a pension will significantly diminish the amount of pension benefits an employee would have received because the vast majority of current employees are not at full years of service or age. Former employees like E who may or may not have had full YOS and age when he left may not be hurt by the termination but by the changes in rules of what would have been available.
Further, it is likely that no active employee will receive pension benefits during BK so you automatically lose a couple years worth of funding and because of the time value of money, you can't make up with a lump sum what you would have obtained if the funding had continued on an ongoing basis, even at a reduced level.
.
And it is absolutely true that AMR's restructuring plan requires them to get rid of the pension underfunding in order to have the financial ability to take on the $25B in new aircraft orders (even if via leases) that are part of AA's turnaround plan.
The fact that other airlines who have not terminated all of their plans and retain responsibility for the pension underfunding have also not ordered the large number of new aircraft that AA has ordered shows that there are choices about which debts you choose to pay and how, even in the midst of difficult decisions, financial priorities become apparent.

 

[BoeingBoy]

Pension calculators like this are fairly accurate and do pull employee-specific information.

That doesn't sound right in this case if an employee has to put age or retirement date in - that should be employee-specific information that you claim is pulled so all that would be needed is an employee number or other identifying information. When you say "like this" I assume you know no more than I do about the one(s) on jetnet.

Sure, there are pension calculators online that are only as accurate as the info put in - the old GIGO.

Jim

 

[WorldTraveler]

That doesn't sound right in this case if an employee has to put age or retirement date in - that should be employee-specific information that you claim is pulled so all that would be needed is an employee number or other identifying information. When you say "like this" I assume you know no more than I do about the one(s) on jetnet.

Sure, there are pension calculators online that are only as accurate as the info put in - the old GIGO.

Jim

someone who actually is using AA's pension calculator will have to comment but you probably have to put in at least the date you intend to start benefits or the age.

In order to make even a pension estimate, you need to know an employee's earnings history - and making a rough guess w/o that information means the only way you could do it is to assume that someone at X years of seniority exactly followed the pay scale progression for his current job classification etc.... if a company cannot be more accurate that that then they should not be offering a pension calculator - and I doubt that AA is that crude in its approach.

 

[BoeingBoy]

Does not the PBGC use the actual amount of money in the plan as part of it's process of determining benefits? By George, I do believe they do. With approximately $8.5 billion in total funding a 1% change in value of the fund holdings would make an $85 million difference. Could that maybe, just maybe change an employee's benefit if the plan was terminated?

The "Whole Truth" is that an employee's benefits from the PBGC depend on more than payroll history and retirement date... GIGO

Jim

 

[limit]

Its employee specific.
There are two ways to calculate benefits.
1. you can put in any date as retirement date and any date as starting to withdraw date.
you are also asked for your spouse birth date, so that it can show you
her/his cut if you die first, and is very detailed in providing different scenarios .

2.The new option put up last month allows you to check the PBGC box , in which case the calculator automatically uses 11/19/2011
as you "retirement" date.
You still have to enter a benefit start date so that it can give you a result depending on the benefit
start date per PBGC rules ( If you chose to start withdrawal at 55 it will be less than at 57, ..,60 and so on).
Your benefit after 60 does not change as there is no penalty per the rules after that date.

The reason for the birth day is simple , the way I see it.
The guys that wrote the code just decided to have you put in your date ( needed to see if you are retiring pre 60 ),
, instead of the system pulling it automatically.
The system does pull your average salary required by the formula to determine benefits and provides that average salary used on its results page.