Pension

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tsgarp
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Pension

Post by tsgarp »

Hi,
I was wondering about the details of Air Canada's new hire pension plan. What is the formula to determine your pension? How many years in until you are vested?
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groundpilot
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Re: Pension

Post by groundpilot »

tsgarp wrote: Thu Sep 12, 2019 10:36 am Hi,
I was wondering about the details of Air Canada's new hire pension plan. What is the formula to determine your pension? How many years in until you are vested?

It is based on career average earnings so varies quite a bit from pilot to pilot.

Having said that I have plotted a conservative career and figure at age 60 it will be around a $100,000 annuity with just over 20 years. Of course does not take into account inflation...
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neophyte
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Re: Pension

Post by neophyte »

Are new hires on a Target Benefit style pension? DC Pension? DB pension?

I heard recently that everyone is back on the DB. Any truth to this?
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yycflyguy
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Re: Pension

Post by yycflyguy »

neophyte wrote: Tue Sep 17, 2019 8:14 am Are new hires on a Target Benefit style pension? DC Pension? DB pension?

I heard recently that everyone is back on the DB. Any truth to this?
Negative. However, it is a future, realistic negotiation goal.
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Hangry
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Re: Pension

Post by Hangry »

yycflyguy wrote: Tue Sep 17, 2019 9:10 am
neophyte wrote: Tue Sep 17, 2019 8:14 am Are new hires on a Target Benefit style pension? DC Pension? DB pension?

I heard recently that everyone is back on the DB. Any truth to this?
Negative. However, it is a future, realistic negotiation goal.
That is just not true. The DB is dead. Cemented in with the 10 year deal.
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Celtic1
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Re: Pension

Post by Celtic1 »

groundpilot wrote: Thu Sep 12, 2019 11:53 am
tsgarp wrote: Thu Sep 12, 2019 10:36 am Hi,
I was wondering about the details of Air Canada's new hire pension plan. What is the formula to determine your pension? How many years in until you are vested?

It is based on career average earnings so varies quite a bit from pilot to pilot.

Having said that I have plotted a conservative career and figure at age 60 it will be around a $100,000 annuity with just over 20 years. Of course does not take into account inflation...
Is this 100k estimate on the old plan or the new one? I would have thought it would be quite a bit lower on the new plan based on 20 years service.

Thanks
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DropTanks
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Re: Pension

Post by DropTanks »

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Last edited by DropTanks on Wed Feb 05, 2020 11:02 am, edited 1 time in total.
rudder
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Re: Pension

Post by rudder »

While I agree you can beat the annual RCT limits under the terms of the new plan, I would take a closer look at the entitlement formula.

Yes, early earnings as a CA will dramatically enhance the benefit. Similarly, 4 years of status pay then NB FO pay for years thereafter creates significantly lower annual earned benefits towards the final pension benefit total. This plan does not function like a typical DB Plan - there will be no unfunded liabilities created by a back end earnings calculation.

The pension lottery will be much like the upgrade lottery. It is all about timing and age.
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yycflyguy
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Re: Pension

Post by yycflyguy »

Hangry wrote: Tue Sep 17, 2019 9:17 am
yycflyguy wrote: Tue Sep 17, 2019 9:10 am
neophyte wrote: Tue Sep 17, 2019 8:14 am Are new hires on a Target Benefit style pension? DC Pension? DB pension?

I heard recently that everyone is back on the DB. Any truth to this?
Negative. However, it is a future, realistic negotiation goal.
That is just not true. The DB is dead. Cemented in with the 10 year deal.
What evidence do you have to the contrary that it is not a negotiation goal?

Fact;
1. Everyone on DB is presently cheaper for the company as they enjoy a funding holiday
2. Pilots are contributing an additional 1.5% to an overfunded DB plan
3. Pilot unity starts with same pension plans

Call or email your representatives and ask if this is a negotiation goal.
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Mr. North
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Re: Pension

Post by Mr. North »

Not everyone wants to be put on the DB. I personally prefer the security and independence of CWIP. It keeps the company from using the pension as a bargaining chip. And for many of the young pilots joining I'd argue they will make more with CWIP.
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Thomasthetank
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Re: Pension

Post by Thomasthetank »

yycflyguy wrote: Tue Sep 17, 2019 9:10 am
Negative. However, it is a future, realistic negotiation goal.
If you knew the history of Air Canada and its DB plans...

If you knew how the Company has to account for DB plan costs on its balance sheet. (Despite someone telling you it's "free" for the Company right now)...

If you knew the attitude towards DB plans of the two senior executives in the Company that hold the hammer on this...

You wouldn't be using the word "realistic". :shock:

If you believe your ACPA elected rep when they tell you the Company will reopen the DB plan, you might as well ask them to lower your income tax! :lol:

IMHO
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Last edited by Thomasthetank on Mon Sep 23, 2019 8:12 am, edited 1 time in total.
groundpilot
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Re: Pension

Post by groundpilot »

DropTanks wrote: Tue Sep 17, 2019 3:29 pm New plan. It’s been said that the new plan can yield even more $$$ in retirement than the DB plan if you have the right career progression. I’d say people now that join young and upgrade quickly will make out like bandits in retirement from the TB plan.

The DB plan is deader than disco and will never see the light of day. Any company would give its left nut to get rid of a DB plan and they did it. They will not ever let it come back. Imho.
It may YIELD more but you are PUTTING MORE IN

You pay less into a DB and get MORE

But yes, the DB is DEAD
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fish4life
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Re: Pension

Post by fish4life »

Also in the airline industry I don’t think I’d even want a DB plan
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dumbbell daddy
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Re: Pension

Post by dumbbell daddy »

With the new AC pension "scheme", are you allowed to take out the commuted value when you retire instead of the payments? A typical DB plan would allow you to:

Transfer a large chunk to a LIRA.
Throw the remainder into your existing RRSP (if you had the room).
Take the rest in cash.

Thanks
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Thomasthetank
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Re: Pension

Post by Thomasthetank »

dumbbell daddy wrote: Sat Sep 21, 2019 5:42 pm With the new AC pension "scheme", are you allowed to take out the commuted value when you retire instead of the payments? A typical DB plan would allow you to:

Transfer a large chunk to a LIRA.
Throw the remainder into your existing RRSP (if you had the room).
Take the rest in cash.

Thanks
No expert on this, but we have a QRH that summarizes the two plans. Lump sum commuted values are available in both plans.

It says for DB members you can take a lump sum before age 50 if you have 25 years of service.

In CWIPP, you have a little more flexibilty. You can take a lump sum before age 50 if you have 20 YOS, or before age 55 if you have less than 20 YOS.

I think in both cases it has to go into a LIRA, not sure how much spills out and gets taxed. Don't know of anybody ever doing it in the DB plan, and of course, CWIPP is brand new so who knows if anybody ever will.
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dumbbell daddy
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Re: Pension

Post by dumbbell daddy »

Thanks for the response.
Cheers
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Thomasthetank
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Re: Pension

Post by Thomasthetank »

Duplicate post
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tsgarp
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Re: Pension

Post by tsgarp »

Sorry, really dumb question.

Under the DC plan, does the company choose how your pension fund is invested, or do you select an investment advisor? Also, if I'm understanding this correctly, you contribute 6% of your wages up to 140K, the company matches it and when you retire that money is yours?
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FL-280
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Re: Pension

Post by FL-280 »

The 140k Cap was removed with CWIP
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Thomasthetank
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Re: Pension

Post by Thomasthetank »

tsgarp wrote: Mon Sep 23, 2019 5:41 pm Sorry, really dumb question.

Under the DC plan, does the company choose how your pension fund is invested, or do you select an investment advisor? Also, if I'm understanding this correctly, you contribute 6% of your wages up to 140K, the company matches it and when you retire that money is yours?
You don't choose investments, it's more like a DB plan that way, you just show up for work. It's all explained on their website:

https://cwipp.ca/benefits
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