R&I Seminar: A ‘Low-Risk, High-Yield’ Investment for Pilots

By Kevin Cuddihy, Contributing Writer
Capt. Ken Binder (FedEx Express), ALPA’s Retirement and Insurance (R&I) Committee chair, takes questions along with other members of the committee at the recent R&I Seminar.

With 16 pilot groups in some stage of negotiations, the timing couldn’t have been better for ALPA’s Retirement & Insurance (R&I) Seminar, which was held May 5–6 at the Association’s McLean, Va., conference center. Participating in two days of presentations, roundtables, and Q&As on a myriad of topics in the benefits world, 43 pilot volunteers from 14 pilot groups were focused on how to enhance contracts and educate and inform their fellow pilots.

“It takes a different breed of pilot to volunteer in this area,” said Capt. Joseph Genovese, ALPA’s vice president–finance/treasurer, welcoming the pilots to the seminar. “You do some of the most important and longest-lasting work of anyone in the Association.”

“This is a very important moment in negotiations,” commented Betty Ginsburg, director of ALPA’s Representation Department, explaining how the pandemic has merged schedules, with rapid timelines. “Things are moving fast, and we’ll be seeing lots of changes,” she noted. “When we come out of this, we’ll see a different world in terms of benefits—and you all are key.”

In addition to the uncommonly high number of negotiations, a significant number of ALPA pilots are rapidly approaching their federally mandated retirement age—and with it a longer retirement as well as life expectancies. And with many pilot groups now focusing on noncash benefits over salary (see “Beyond Defined Contribution Plans”), the importance of staying informed about benefit trends and developments is even more important.

Members of ALPA’s R&I Committee, staff subject-matter experts, and outside consultants from top firms and the government provided a robust and well-rounded lesson in all areas of benefits, such as 401(k) trends, guaranteed life annuities, retiree health care, long-term care and disability insurance, potential legal changes to benefits in the future, Canadian benefits, and more. Attendees were able to ask questions, share successes, and learn from their colleagues.

“The great thing about events like this,” remarked Capt. Ken Binder (FedEx Express), ALPA’s R&I Committee chair, “is that everyone can come and learn and share their stories. These successes are cross-pollinated by the group and taken back to other pilot groups to find more success.”

By staying educated, keeping up to date, and remaining adaptable, these volunteers will be ready to serve their pilot group and help create the best possible set of benefits for their specific needs.

“When you leave here, I hope you have a greater understanding of the current landscape, of the upcoming trends, and of ways you can benefit your entire pilot group,” said Genovese. “More importantly, I hope you establish relationships with the staff as well as with your colleagues here. We’re a union, and what benefits one can benefit all. Share your successes and learn from the successes of others—that’s the best way to achieve even more success.”

Beyond Defined Contribution Plans

Some Retirement & Insurance (R&I) Seminar attendees came a day early on May 4 for the newly created Retirement & Insurance (R&I) Forum, held in response to pilot feedback to provide a deeper dive on a singular topic. The half-day event, titled “Beyond DC Plans,” focused on ways to introduce new tax-advantaged benefits into pilot contracts, especially at carriers where many of the current retirement benefits are bumping up against or have already surpassed government tax limits.

The forum started with a brief history of the “spillover” issue for pilots, explaining how as salaries continued to rise and Congress continued to put limits on retirement income, more and more ALPA pilots were finding themselves with spillover funds that they still wanted to earmark for retirement.

“After the bankruptcy era, we focused primarily on returning salaries to where they should be,” explained Capt. Ken Binder (FedEx Express), ALPA’s R&I Committee chair. “We’re not there for everyone, but for those who are, we can now focus on those noncash benefits that can really improve our retirements.”

Outside consultants as well as staff shared information on nonqualified deferred compensation plans, company-owned life insurance, health reimbursement arrangement VEBAs, market-based cash balance plans, and more. Pilots learned the risks, potential rewards, and how each could play a part in creating a more robust retirement.

“We need to be constantly ready to adapt our plans and to build plans that can be adapted,” concluded Binder.

This article was originally published in the May 2022 issue of Air Line Pilot.

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