Retirement Education and Research

Look below for information, communications, and videos

Retirement was a primary issue where much attention was focused during our last collective bargaining agreement (CBA). While enhancements were made to Section 28, we know many hoped for more improvements that were not achieved in the latest agreement. Over the course of the last year, your elected representatives, MEC Officers, Negotiating Committee and R&I Committee have been involved in an effort to research our retirement plan as it currently exists, and explore possibilities that could enhance it. As this process continues to evolve, we’ve created this website as a central location to provide you with important information—from key players involved to previously released R&I educational videos and Chairman’s Messages.

The research process is underway. However, as you can imagine, this is an extensive project and will take our team of consultants significant time to develop concepts for consideration. It’s not until we reach that point that your elected representatives will determine if the outcome is worthy of further consideration. As previously noted in various communications, there is NO bargaining on retirement taking place with the company nor will there be without your inclusion.

Please take some time to peruse the website. We encourage you to bookmark it as a favorite as the information here will continue to be updated as we move forward.

Communications

Watch these here or by clicking the links:

Q&A

Once we’ve received and answered a few questions, we will also have Frequently Asked Questions available for you to read.
If you’re curious about something that’s not there, just ask!

Previous Questions Asked and Answered

Q. Why did you go to the company to renegotiate our retirement plan without first taking a membership vote?

A. No one has gone to the company to negotiate anything. An informational meeting to introduce a plan concept that would significantly improve our retirements was held with company finance and actuarial experts so that they can do their due diligence and determine if they are interested in bargaining. Over the next few months, we will do the same thing with the crew force and at some point in the future we will determine if we as a group wish to enter into bargaining. We still have a long way to go. I believe once you have a grasp of the plan design you will appreciate the increased value and security it could create for us. I ask that you be patient and consider the facts once you have them. Sorry if this prospect is disturbing , but if we have a chance to improve our retirements, the MEC unanimously believes we should pursue it. That being said, we are a long way from bargaining with the support of the pilot group.

 

Q. What effect does prior court ordered Mercer QDRO with regard to our divorced crew members and ex spouse entitlements upon retirement?  

A. The creation of a new retirement plan should have no impact on an existing qualified domestic relations order (QDRO). Typically, a QDRO divides the retirement plan benefits between the two divorcing parties, based on the number of years of the marriage. Because the divorce is final, benefits earned after the marriage would not usually be covered by the QDRO. Additionally, since the new variable plan did not exist at the time of the divorce and QDRO, it would not fall within the QDRO because a QDRO must specify the name of the plan subject to the order.

 

Q. I’m struggling to find any details on what is actually being proposed for a new retirement system. Where can I find details on this? I find it interesting that there is very little known about this proposal, yet the negotiating committee has been authorized to talk to the company. Not allowing the people you serve know the details before you go to the company only generates miss trust. I’m sure it is just that I am not looking in the right place, but I would feel better if I could actually see the details the proposal.

A. The current project underway has involved an extremely significant analysis of our current retirement benefits and the research and development of an alternative plan to improve our Defined Benefit Plan. There is currently no negotiation on Sec 28. Prior to any negotiation with FDX, pilots will be extensively educated on the proposed new plan design. To go forward with this proposal, FedEx and the MEC will need to agree to enter into a formal negotiation, at which point the pilots will be notified. A project of this size is impossible to present all of the information to all of the stake holders simultaneously and requires a very sequential set of steps. Please be patient as we manage our way through and perform our due diligence.

 

Q. Over 200 of us will be making a decision to give notice of retirement this December. Many of us will be retiring 3-4 years early like myself. We need to have the knowledge that you have on what will be the best possible scenario we could expect from this new proposal for our particular circumstance. Please don’t hoard information like what happens in contract negotiations. Tell us what we are asking Management to buy off on.

A. The current retirement project being studied by the MEC has involved an extremely significant analysis of our current retirement benefits and the research and development of an alternative plan to improve our retirement benefits. There is currently no negotiation on Sec 28. To go forward with this proposal, FedEx and the MEC will need to agree to enter into a formal negotiation, at which point the pilots will be notified. It is nearly impossible to predict the speed at which a project like this might be completed. It is highly unlikely that any changes to the retirement package would be effective within the next calendar year. Please be patient as we manage our way through and perform our due diligence. Those pilot making decisions this December to retire should base your decision on the current FDX retirement package.

 

Q. What other “models” (if any) did the MEC consider/research before deciding on the Variable Benefit Model? 

There is unrest (once again) in the membership that we are not being included as promised in the decision-making process. Some thought that the membership would be the ones deciding which model we preferred & moved forward with… not the MEC “unilaterally” choosing.

A. The current project underway has involved an extremely significant analysis of our current retirement benefits and the research and development of an alternative plan to improve the FDX pilot retirement package. Part of that research brought forward the “Variable Plan Design”. There are a number of different options under the variable plans in general. Two of those designs are the Variable Benefit Model and the Variable Accrual Model. Within those two types of models there are significant design options that our SME’s and consultants needed to wade through and present to the MEC. A decision was made by the MEC to focus on one particular model at this point in order to simplify the process and allow a more focused approach. The MEC did not rule out the Variable Accrual Model, but instead is just focusing the effort on the Variable Benefit Model at this time.

Please keep in mind that there is currently no Section 28 negotiations. To go forward with this proposal, FedEx and the MEC will need to agree to enter into a formal negotiation, at which point the pilots will be notified and educated on the proposal. A project of this size is impossible to present all of the information to all of the stake holders simultaneously and requires a very sequential set of steps. Please be patient as we manage our way through and perform our due diligence.

 

Q. What is the future plan regarding our current “A” defined fund elimination and replacement from the company’s side? Will I not receive it when I retire in a few years or so?

A. The current examination of our “A-Plan” has involved a significant analysis and continues with research and development to improve that benefit. Federal law prohibits any plan amendment that results in the reduction or elimination of benefits that have already accrued. The only way in which you would not receive your full accrued benefit would be through a distress plan termination and takeover of the plan by the Pension Benefit Guaranty Corporation (PBGC). This is highly unlikely based on the current financial condition of FDX. Once retired, if you have accrued benefit under both plans, you will receive checks from both plans. Nothing can or will be taken away from you.

 

Q. I am planning to retire in 2020. Is my retirement package/ benefits at risk under the “Variable Benefit Plan model”?

A. Your current retirement benefits are not at risk under a Variable Benefit Model. We are not currently in negotiations with the Company; we are only in the research and development phase of this project, which involves analyzing your current benefit and examining ways to improve that benefit. The benefits you have already accrued under the current FDX Pension Plan are not at risk if the Variable Benefit Plan is created. The “anti-cutback” rule under federal law prohibits any plan amendment that results in the reduction in the value of any accrued benefit. Nothing can or will be taken away from you.

 

Q. If we proceed with changing our retirement, will considerations be made for those close to retirement in regards to the 1 year declaration of your retirement date to receive the bonuses? My concern is for those that have declared their retirement date or will do so soon (must do so 1+ years in advance), then find out a better retirement option is definitely in the works and now have to change their retirement date to wait for the new retirement plan and now the date change cancels their 2 bonuses. Thank you.

A. At the present time we are still in the research and development stage and it would be premature to assume that this will lead to a formal negotiation. However, if that were to occur, we don’t intend on altering the terms of the early notice under Section 28F. (End of Career Sick Leave/Advance Notice of Planned Retirement Bonus). In the event of a negotiated agreement, this issue will require attention due to the impact on pilots that may have provided early notice to retire and have not reached mandatory retirement age.  It is nearly impossible to predict the speed at which a project like this might be completed. It is highly unlikely that any changes to the retirement package would be effective within the next calendar year.