Southwest pilot talks proceed quietly

[PCL_128]

Likewise, I am sure SWA management would love to pay SWA pilots your payrates.

Oh, I don't doubt it, which is exactly why we're fighting to increase them, just as I hope you guys fight for a B-plan.

 

[FlyingSig]

A B-Plan does not have these limits.

Not true (as just about every Delta pilot can tell you this year).

The maximum employee + employer contribution towards retirement is covered under 415 limits which for this year is $45000. If you put the max $15500 into your 401k this year this leaves $29500 that the employer can contribute to ALL your retirement accounts (401k & DC aka B-plan in any combination). Any benefit due to you over this amount will come as taxable income.

I haven't put a dime into my 401k this year because my bankruptcy claim filled up my 415 limits which in turn gave me a 23% pay raise for the rest of the year (2% company 401K, 9% company DC, plus my personal 14% 401K contribution). Personally I'm not looking foward to January because the extra money has been nice.

 

[PCL_128]

Not true (as just about every Delta pilot can tell you this year).

The maximum employee + employer contribution towards retirement is covered under 415 limits which for this year is $45000. If you put the max $15500 into your 401k this year this leaves $29500 that the employer can contribute to ALL your retirement accounts (401k & DC aka B-plan in any combination). Any benefit due to you over this amount will come as taxable income.

I haven't put a dime into my 401k this year because my bankruptcy claim filled up my 415 limits which in turn gave me a 23% pay raise for the rest of the year (2% company 401K, 9% company DC, plus my personal 14% 401K contribution). Personally I'm not looking foward to January because the extra money has been nice.

That's all true, but like you said, the 401k limit is only $15,500. If you only had a 401k, then you'd max out your retirement contributions much quicker than with a B-plan. With AirTran's current 10.5% B-plan, I'd have to make $428k in a year to max out my retirement contributions under the rules that apply to B-plans. A $45k limit is much better than a $15,500 limit, which is what anyone with only a 401k has to live with.

 

[Splert]

Not true (as just about every Delta pilot can tell you this year).

The maximum employee + employer contribution towards retirement is covered under 415 limits which for this year is $45000. If you put the max $15500 into your 401k this year this leaves $29500 that the employer can contribute to ALL your retirement accounts (401k & DC aka B-plan in any combination). Any benefit due to you over this amount will come as taxable income.

I haven't put a dime into my 401k this year because my bankruptcy claim filled up my 415 limits which in turn gave me a 23% pay raise for the rest of the year (2% company 401K, 9% company DC, plus my personal 14% 401K contribution). Personally I'm not looking foward to January because the extra money has been nice.

Roger...

A 401K suffers from HCE testing which limits the amount under the $45,000 limit if/when the 401K fails.

B-Plans are better than 401K only plans.

Splert...

 

[Hose A. Jiminez]

That's all true, but like you said, the 401k limit is only $15,500. If you only had a 401k, then you'd max out your retirement contributions much quicker than with a B-plan. With AirTran's current 10.5% B-plan, I'd have to make $428k in a year to max out my retirement contributions under the rules that apply to B-plans. A $45k limit is much better than a $15,500 limit, which is what anyone with only a 401k has to live with.

In correct.

Lets say you make 200k and put away 8% That will get you roughly 15500. Company matches appx 8% (SWA plan) of your salary. Thats another 15500. Profit share of 10%, thats another 20000.

Thats a total of 51K. 45k is the max this year so 6k will have additional tax.

A salary of 100k (2nd year pay) will get you about 33,500 if you max out.

True, we have to save some of our own money, but if you are not doing that anyway youre fool enough to end up broke one way or another.

I didnt understand it at first either. Hope this helps.

 

[PCL_128]

You're counting profit share, and I would never do that. Profit share is never guaranteed, but a B-plan defined contribution is. No matter how well the company is doing, they still have to put 10.5% of my gross income into my B-plan account. I don't have to put a dime in, and nothing is dependent on company profits. There's no reason for SWA pilots to be responsible for funding their own retirements when every other major has either an A-fund or a B-fund that requires no employee contributions.

 

[SWA GUY]

PCL,

Can your company snatch your B-fund out from under you or is it protected?

 

[PCL_128]

B-funds are always protected. The money is in your own account. It's not at all like an A-fund (what people usually call a "pension"). The B-fund money is out of the reach of management, the bankruptcy courts, or anyone else. Basically, a B-fund is a 401k without a required employee contribution and with higher limits for yearly contributions.

 

[SWA GUY]

Thanks PCL.

 

[SWA/FO]

I'd say if they want to mess with our boarding procedures then we need a B fund at SWA.