TWU or IAM in a Merger

[Tim Nelson]

The pension does go to $48 starting in 2014 and I agree that sucks. However, if you compare the the two the DBP smokes the 401K. If the Company put the money into the 401K instead of the DBP and you let it grow for 20 years and earn 7% that would come out to around $100,000. Then if you took out a 20 year annuity upon retirement you would get $5000 per year or $417 per month. Now if you get $48 per month for 20 years under the DBP that would equal $960 per month. Even at the $48 per month DBP we are far better off than having that money put into a 401K. I do recommend that everyone invests in the 401K on their own. Remember, experts say you should have the 3 legged stool for retirement, personal savings, Social Security and a Pension plan. Not many people are able to get into a Pension today which leaves them with personal savings and Social Security.

P. Rez

Pat,
The history of this IAM pension plan was that the US AIRWAYS fleet had to take a $47 million concession to get it since the 401k they had was substantially superior with up to 10% with no restrictions on contributions on overtime, etc. And the company made the same contributions without discriminating between part time and full time as the IAM pension plan benefit does.

Since you are on the negotiating committee, my hope is that once you guys do tackle this that you consider that any increase in the retirement have the company contribute to the 401k instead of increasing its contribution amount into the IAM pension. The IAM pension plan is untrustworthy since others can change the future benefits overnight.

As aside, the IAM pension plan benefit is further reduced, significantly, if one chooses to have the spousal offset.

At any rate, your retirement comparisons are skewed since you stopped the 7% personal investment income after the 20 years on the 401k. The IAM pension trustees continue to get the investment income of the company IAM pension amounts after the 20 years and that is implied in the rate. Whatever the case, the retirement sucks right now, I'm of the opinion that the focus should be on getting company contributions into the 401k instead of increasing the % into a IAM pension plan that has already burnt us once with a 'robin hood reversed'. The IAM pension plan schedule used to be in the fair column but it isn't anymore so we must move on.

Merry Christmas

regards,

 

[737823]

Pat,
The history of this IAM pension plan was that the US AIRWAYS fleet had to take a $47 million concession to get it since the 401k they had was substantially superior with up to 10% with no restrictions on contributions on overtime, etc. And the company made the same contributions without discriminating between part time and full time as the IAM pension plan benefit does.

Since you are on the negotiating committee, my hope is that once you guys do tackle this that you consider that any increase in the retirement have the company contribute to the 401k instead of increasing its contribution amount into the IAM pension. The IAM pension plan is untrustworthy since others can change the future benefits overnight.

As aside, the IAM pension plan benefit is further reduced, significantly, if one chooses to have the spousal offset.

At any rate, your retirement comparisons are skewed since you stopped the 7% personal investment income after the 20 years on the 401k. The IAM pension trustees continue to get the investment income of the company IAM pension amounts after the 20 years and that is implied in the rate. Whatever the case, the retirement sucks right now, I'm of the opinion that the focus should be on getting company contributions into the 401k instead of increasing the % into a IAM pension plan that has already burnt us once with a 'robin hood reversed'.

Merry Christmas

regards,

Thanks Tim. What 700UW and other proponents of the IAM pension don't understand is that in negotiations the company considers this cost and doesn't consider the cost in isolation. He keeps saying that workers covered under a 401K "use their own money not the company's" and while true, this is offset by lower base rates, higher medical, less SCOPE protection, etc. Kev has been a proponent for doing away with the pension for this reason and even went as far to say that labor "gives away the store to save the pension", I agree it is in the interest of everyone to manage their own retirement in the plan that is best suited for their financial needs and goals. Every individual is different and has different needs and a one size fits all approach is not best. Look at the result of the Lockheed Martin strike, the company wanted to transition new hires to 401K, the IAM said no and staged an unsuccessful extended strike only to then eliminate pension for new hires.

Josh

 

[P. REZ]

Pat,
The history of this IAM pension plan was that the US AIRWAYS fleet had to take a $47 million concession to get it since the 401k they had was substantially superior with up to 10% with no restrictions on contributions on overtime, etc. And the company made the same contributions without discriminating between part time and full time as the IAM pension plan benefit does.

Since you are on the negotiating committee, my hope is that once you guys do tackle this that you consider that any increase in the retirement have the company contribute to the 401k instead of increasing its contribution amount into the IAM pension. The IAM pension plan is untrustworthy since others can change the future benefits overnight.

As aside, the IAM pension plan benefit is further reduced, significantly, if one chooses to have the spousal offset.

At any rate, your retirement comparisons are skewed since you stopped the 7% personal investment income after the 20 years on the 401k. The IAM pension trustees continue to get the investment income of the company IAM pension amounts after the 20 years and that is implied in the rate. Whatever the case, the retirement sucks right now, I'm of the opinion that the focus should be on getting company contributions into the 401k instead of increasing the % into a IAM pension plan that has already burnt us once with a 'robin hood reversed'. The IAM pension plan schedule used to be in the fair column but it isn't anymore so we must move on.

Merry Christmas

regards,

Tim,

For sake of argument let's do 2 scenarios. We'll make some assumptions too. Both employees are 30 years old and plan to retire at 60. Both work 40 hours per week. A employee gets $1.05 per hour into a 401k and B gets $1.05 per hour into a DBP that gives him $48 a month times years of service. They are both single and both live to 80.

Employee A would save $215,000 in 30 years with a 7% return in their 401k. When they retire they take out a 20 year annuity which would give them $896 per month.

Employee B would get $48 times 30 years or $1440 per month.

Employee B would get $544 more per month than Employee A.

Without being able to predict the future but comparing apples to apples, the DBP is a better option. This has nothing to do with negotiations, purely a financial opinion of mine. Remember, financial experts talk of the 3 legged stool of retirement, personal savings, Social Security and a Pension. So, by all means, I believe everyone should have a 401k.

Merry Christmas,

P. Rez

 

[Real tired]

So you want to take a paycut since a 401k is your own money?

Go to the plan's website and learn about who is in control.

The plan is funded to 105%, ask the folks about how much their 401ks lost when the market was down.

Not entirely correct.

In the case of Maintenance, the IAMNPF contribution IS our money. 50 dollars a week ("Company base, and Company Match") that used to go into our 401K plan. Both were taken from us, and yes we voted for it, with the T/A of 2008. That 2400 a year would have been worth more in a 401k plan in the long term in my opinion.

Second, the plan maybe funded now at 105%, but that is only recently the case. The Pension Protection Act of 2006 allowed our fund, that was previously in endangered status, to use prior years numbers, or re-amortize the funding over a longer term, which caused reduced payouts to participants, and reduced multipliers. In other words the funding comes on our backs.

 

[Tim Nelson]

Not entirely correct.

In the case of Maintenance, the IAMNPF contribution IS our money. 50 dollars a week ("Company base, and Company Match") that used to go into our 401K plan. Both were taken from us, and yes we voted for it, with the T/A of 2008. That 2400 a year would have been worth more in a 401k plan in the long term in my opinion.

Second, the plan maybe funded now at 105%, but that is only recently the case. The Pension Protection Act of 2006 allowed our fund, that was previously in endangered status, to use prior years numbers, or re-amortize the funding over a longer term, which caused reduced payouts to participants, and reduced multipliers. In other words the funding comes on our backs.

+1

 

[Tim Nelson]

Tim,

For sake of argument let's do 2 scenarios. We'll make some assumptions too. Both employees are 30 years old and plan to retire at 60. Both work 40 hours per week. A employee gets $1.05 per hour into a 401k and B gets $1.05 per hour into a DBP that gives him $48 a month times years of service. They are both single and both live to 80.

Employee A would save $215,000 in 30 years with a 7% return in their 401k. When they retire they take out a 20 year annuity which would give them $896 per month.

Employee B would get $48 times 30 years or $1440 per month.

Employee B would get $544 more per month than Employee A.

Without being able to predict the future but comparing apples to apples, the DBP is a better option. This has nothing to do with negotiations, purely a financial opinion of mine. Remember, financial experts talk of the 3 legged stool of retirement, personal savings, Social Security and a Pension. So, by all means, I believe everyone should have a 401k.

Merry Christmas,

P. Rez

Prez,

First off, glad to see you posting. I appreciate it.

I don't want to get into the financials of the difference other than to say we differ on the math, what is involved, and the incredibly unfair things in it. What I do want to say is that I hope you push for the company to put additional monies, if any, into the 401k [as opposed to the IAM pension] so our members can have a more balanced retirement. Will you do that? I hope someone actually listens on this point. The recent history of the IAM pension plan along with the continual loss of membership is too risky to afford another monster hit from the IAM pension trustees who may have to dip yet again into the nest eggs of our members.

regards,

 

[700UW]

Why do you post about membership loss?

Just because the IAM loses members doesnt mean the company they work for pays into the IAMNPF.

Funny how you keep clouding the issue even when its pointed out to you.

 

[necigrad]

my own pension orgnization cut the legs out from my promised retirment .....do you think i'm going to let them stick around to falter on more promises to me in the future ?

The pension has already failed me once , i am not going to give them another chance to fail me again ...

Freedom, it's been said MANY times in the past, I'll say it one last time , just for you. PROMISES MADE TO YOU FOR YOUR PENSION ARE NOT BEING BROKEN! You paid in at a certain rate on a certain scale, those years ARE NOT CHANGING. They did, however, say that FUTURE years will be at a lower rate, and if the membership doesn't like it they can exclude it in their next contract. Not one promise was broken. Not one.

 

[Tim Nelson]

Freedom, it's been said MANY times in the past, I'll say it one last time , just for you. PROMISES MADE TO YOU FOR YOUR PENSION ARE NOT BEING BROKEN! You paid in at a certain rate on a certain scale, those years ARE NOT CHANGING. They did, however, say that FUTURE years will be at a lower rate, and if the membership doesn't like it they can exclude it in their next contract. Not one promise was broken. Not one.

I disagree with you that promises were not broken. The way the plan was presented was at best defrauding members since it threw around the term 'guaranteed' like candy. And the plan's defined benefit has a changing definition so calculating any future defined benefit isn't a good idea.

On November 23, 2005, Robert Roach put out a letter to all America West employees saying , "IAM represented Fleet service workers at US AIRWAYS enjoy an IAM National Pension Plan benefit of $78.30 a month for each year of future service." Well, that's at best misleading. Could you imagine if Roach calculated the benefit as it actually has happened, i.e., $78 on 7 years and $46 on the next 23? I couldn't imagine anyone being too happy about it. Just saying that insead of selling the plan, they should have been truthful instead of taking advantage of working people. Never mind that any employee who doesn't complete 5 years under the plan loses it all. Never mind that the $78 qualifier had nothing to do with 40% of the group since part timers get 'hammered' under the plan. Never mind that the multiplier is significantly reduced if one actually wants to make sure the plan is there for their spouse.

In a publication on goiam.org, "The IAM National Pension Plan provides the financial security of a 'guaranteed' monthly benefit upon retirement." Then it goes on to explain what that means to US AIRWAYS by doing a $78.30 x 30 years [much like what Pat Did] and it came up with $2,349. At this point, we now know that is false, if not a lie [the lie comes in this by the withholding of information]

I happen to believe that any calculation, of what the future benefit will be in 30 years, is at risk of a lie. Plus, as odd as this may sound, even the years we already accumulated simply are not guaranteed since other things can happen [Gosh forbid] where even what was already earned may not be there. What if the plan actually flops like other pension plans have? Thus far, it was bailed out twice on the backs of the actives in this decade alone so that those retired can keep their benefits going. In fact, that is exactly what the letter in 2010 said, i.e., the adjustment had to be made so those collecting can continue enjoying their benefits. Unions are out of style in this country and under attack, having a union pension is risky indeed.

And that is why having a more 'even' retirement is the way to go, i.e., IAM pension since we are stuck with it, company contributions into a 401k, and social security. To be sure, all 3 are not guaranteed and that is why it remains more important to have all 3.

regards,

 

[freedom]

Sorry Tim but we are not "Stuck" with the IAM pension .....

As others on here have said , the IAM and the IAM pension are two different things ..

This is 2012 and we live in AMERICA ..... i think it's time we start providing choices to our memebers ..

i as a union memeber want those monies that have been negoiatied on my behalf for my retirment , to go to MY 401k rather than the IAM pension ...

There is no reason that my UNION cannot unshackle me from this other organziation aka the pension ... let those who want to stay and pay into the pension do so , and let those of us who want all of our money to go into a 401k do so ....

If the IAM cannot free me from this group retirment tyranny , then i will be voting for the TWU if and when we merge with American , and i will encourage my fellow brothers and sisters to do the same ..

Offer a fair and equtiable soultuion IAM , or risk losing all of us ...

 

[Tim Nelson]

Sorry Tim but we are not "Stuck" with the IAM pension .....

As others on here have said , the IAM and the IAM pension are two different things ..

This is 2012 and we live in AMERICA ..... i think it's time we start providing choices to our memebers ..

i as a union memeber want those monies that have been negoiatied on my behalf for my retirment , to go to MY 401k rather than the IAM pension ...

There is no reason that my UNION cannot unshackle me from this other organziation aka the pension ... let those who want to stay and pay into the pension do so , and let those of us who want all of our money to go into a 401k do so ....

If the IAM cannot free me from this group retirment tyranny , then i will be voting for the TWU if and when we merge with American , and i will encourage my fellow brothers and sisters to do the same ..

Offer a fair and equtiable soultuion IAM , or risk losing all of us ...

Freedom,
I stand corrected, but when I say "stuck" it implies that nobody on the negotiation team is arguing or will argue to have the 'choice of retirement' given to the member. That is unfortunate, especially since putting the choice in the members hand's is a no cost item since the construction of the IAM pension plan, the 401k and roth are already constructed.

One of the things I feel needed to happen was to give the members the choice, i.e., where to direct the company contribution and by what %, on a yearly basis or at worst, a one time option. Much how they direct and move their money in fidelity.

The company has to put in $1.05 for full time and .65 for part time [a real tragedy indeed]. Some will want the option of the paternal IAM pension, especially if they have less than 5 years of service, while others will want personal choice and select the company contributions to come into their own private 401k or Roth plan.

regards,

 

[P. REZ]

Prez,

First off, glad to see you posting. I appreciate it.

I don't want to get into the financials of the difference other than to say we differ on the math, what is involved, and the incredibly unfair things in it. What I do want to say is that I hope you push for the company to put additional monies, if any, into the 401k [as opposed to the IAM pension] so our members can have a more balanced retirement. Will you do that? I hope someone actually listens on this point. The recent history of the IAM pension plan along with the continual loss of membership is too risky to afford another monster hit from the IAM pension trustees who may have to dip yet again into the nest eggs of our members.

regards,

Tim,

What is your argument to a $544 difference?

P. Rez

 

[Airlinelifer]

Josh,

Roach also said that the IAM pension plan was 'guaranteed' back in 2005. I kept his letter. I am deeply concerned that the continual loss of IAM membership will cause the IAM pension trustees to revisit the plan and whack future benefits for a 3rd time in the last 10 years. We are now down to under 350,000 active members for the first time since a man went on the moon.

As the membership dwindles, participants in the IAM pension plan take a blow. The last big whack was when the last of 16,000 Delta employees finally voted out the IAM on December 10, 2010. We got our letter on December 13, 2010 notifying us "Tuffa Lucka".

Hopefully the IAM will quit asking for an increase in company contribution % into the IAM pension pockets and focus instead on getting any gains to go into the members pockets. Having the company contribute to a 401k puts more in the members pockets and it makes sure all eggs aren't in one basket. We've already experienced what happens with that.

regards,

What ever we accrued is what were going to get, the only "tougha lucka" is that we didnt win the vote.

 

[Tim Nelson]

Tim,

What is your argument to a $544 difference?

P. Rez

The future benefit in the IAM pension is based on the money put in, and the investment return up to and after the individual retires. The difference, as you presented it, restricted any future interest in regards to the 401k. For instance, why would someone want a annuity that pays out only $5,000 a year when the investment income of 7% would fetch $7,000? The difference, as you presented it, also has some big risk associated with it. In 2005, Robert Roach did the exact same math you did, complete with the 30 year scenario, but because of the membership risk, that scenario failed. What we don't know is if the scenario you presented will fail. You can say it won't but I'm uncomfortable sayng it won't fail when I look at the plan history.

And I believe that's where the tension is for our members, there is an 'unsettleness' because of a 'once bitten twice shy' that makes it close to unthinkable for greater % to be put into an IAM pension, as opposed to diversifying and having any additional funds put into a 401k. Whatever the case, I am not in the slightest saying to abolish the IAM pension plan. Although I am uncomfortable with it, some aren't, therefore I think [especially since paternalism is dead] a choice by each member regarding their own retirement options makes good sense. Perhaps a one time choice, maybe a yearly choice but it makes no sense to me to continue forcing exclusivity to the IAM pension when a 401k has already been constructed.

At any rate, I don't wish to dispute any more of the math and whether you or I am incorrect since it is meaningless as we already have the IAM pension and nobody is saying abolish it. Choice should be King though and I would hope that the negotiation team would be open to that.

thanks again Pat for being a stand up guy on here. That shows some independence and free thinking.

regards,

 

[P. REZ]

The future benefit in the IAM pension is based on the money put in, and the investment return up to and after the individual retires. The difference, as you presented it, restricted any future interest in regards to the 401k. For instance, why would someone want a annuity that pays out only $5,000 a year when the investment income of 7% would fetch $7,000? The difference, as you presented it, also has some big risk associated with it. In 2005, Robert Roach did the exact same math you did, complete with the 30 year scenario, but because of the membership risk, that scenario failed. What we don't know is if the scenario you presented will fail. You can say it won't but I'm uncomfortable sayng it won't fail when I look at the plan history.

And I believe that's where the tension is for our members, there is an 'unsettleness' because of a 'once bitten twice shy' that makes it close to unthinkable for greater % to be put into an IAM pension, as opposed to diversifying and having any additional funds put into a 401k. Whatever the case, I am not in the slightest saying to abolish the IAM pension plan. Although I am uncomfortable with it, some aren't, therefore I think [especially since paternalism is dead] a choice by each member regarding their own retirement options makes good sense. Perhaps a one time choice, maybe a yearly choice but it makes no sense to me to continue forcing exclusivity to the IAM pension when a 401k has already been constructed.

At any rate, I don't wish to dispute any more of the math and whether you or I am incorrect since it is meaningless as we already have the IAM pension and nobody is saying abolish it. Choice should be King though and I would hope that the negotiation team would be open to that.

thanks again Pat for being a stand up guy on here. That shows some independence and free thinking.

regards,

Tim,

The last thing I'm going to say on the issue is that the Negotiation team has at all times considered what is best for the membership. We all realize that we can't make everyone happy but we are all in this for the right reason.

P. Rez