JAFA From United States of America, joined Aug 2003, 782 posts, RR: 4
Reply 5, posted (8 years 10 months 3 weeks 3 days 20 hours ago) and read 2507 times:
This means the pilots will keep the pensions earned up to this point, and a new 401K type pension plan will start from today until they retire. So they will get thier pension from two plans when they retire. One from the frozen plan and one from the new plan which starts now.
Cubsrule From United States of America, joined May 2004, 23302 posts, RR: 20
Reply 8, posted (8 years 10 months 3 weeks 3 days 19 hours ago) and read 2434 times:
Quoting JAFA (Reply 5): This means the pilots will keep the pensions earned up to this point, and a new 401K type pension plan will start from today until they retire. So they will get thier pension from two plans when they retire.
I think it's really the best solution for all involved-- in what is clearly a very bad situation. It's unfair to take away pensions already earned, but at the same time this creates a much better (i.e. more survivable situation) for the company. Both sides are to be commended for this logical and reasonable compromise.
I can't decide whether I miss the tulip or the bowling shoe more
DLPMMM From United States of America, joined Apr 2005, 3602 posts, RR: 10
Reply 9, posted (8 years 10 months 3 weeks 3 days 19 hours ago) and read 2425 times:
Quoting Centrair (Reply 7): I always wondered why they didn't have 401Ks. Many businesses offer these as a retirement option. Aren't they safer?
I was reading the release from the MX/ground negotiations. The MX/ground didn't want a 401K but wanted the current system. It just doesn't make sense to me.
401K plans are defined contribution plans that are much safer as there are seperate accounts in the individual employee's name generally held by a 3rd party financial institution. Many companies prefer the 401K and similar defined contribution plans as they are much cheaper than the defined benefit plans they are currently bound to by union contract.
The difference between plan types is clear when you look at the names.
Defined Contribution Plan: For every period worked, the company will contribute a given amount of money to your private retirement account (often matching your own pre-tax contributions to the same account). The employee keeps almost complete control over the account and how it is invested. When the employee leaves the company, the company's obligation to the former employee is finished.
Defined Benefit Plan: After a certain vesting period, the company agrees to pay a given % of an employees salary to him each month after retirement until the empolyee and any spouse the employee may have dies. Not a bad deal when most employees died at 67 or so years old. Very expensivew with people reaching retirement in their 50s and living into their 90s.
Bobnwa From United States of America, joined exactly 14 years ago today! , 6533 posts, RR: 9
Reply 10, posted (8 years 10 months 3 weeks 3 days 10 hours ago) and read 2295 times:
Before some of you start in with the " I'll bet management does not have their pensions frozen" remarks, that already occurred quite a while ago.
The IAM has chosen to turn the pension for their members over to the IAM pension managers. I think this is a mistake on their parts, just like back in the early 90's when the IAM chose to get preferred stock for their pay cuts, while the rest of the employee groups chose common stock. The common stock groups made a nice profit selling their stock on the open market.
Also, please notice that NWA has not dumped any pensions nor did they ever intend to. "NWA will dump pensions' was the subject of many postings on this board.