Council 26 Message - 1/01/18
Council 26 Message - 1/01/18


Fellow Council 26 Members:

At your direction to improve retirement, and recognizing the deficiencies of our current Defined Benefit (A) Plan, your Council 26 Representatives firmly support the current process of exploring the options of a Variable Benefit (VB) Plan.

When your MEC began retirement research and development in April of 2016, we hired experts, gathered pilot SMEs, researched various plans, collected data from the company, considered plan designs, and unanimously chose to focus on this specific plan; which potentially can benefit our pilots the most. On October 31, 2017, your Negotiating Committee met with the company to explain this in concept and measure their interest. Our next steps are to inform our members on this VB Plan and then measure your support for this plan to become a part of our retirement.

Being an Association, we have to make collective decisions and maintain transparency.  This generates unique issues during the education process while avoiding “putting the cart in front of the horse” or “playing with our cards face-up.” We must balance pilot-education against compromising any future bargaining position or strategy. 

As the education process continues, we also must manage expectations. We can’t promise that you will get at least “X;” to do so would reveal our bottom line before any bargaining with the company. We also can’t promise what the top negotiated amount may be.  What we can promise is that we are doing everything we can to increase our defined benefit in retirement in a responsible and sustainable fashion.

Additional items to note:

  • A VB Plan would be in addition to your already-accrued A Plan benefits. (You would receive benefits from BOTH plans in retirement.)
  • No pilot left behind.
    • Transition issues are being identified to highlight potential negative impacts across the seniority list.
    • All pilots identified as less advantaged will be “bumped up” in some form so that no pilot will be financially disadvantaged.
    • Pilots not yet vested in the legacy plan will continue to accrue years-of-service for vesting purposes.
  • A freeze of our legacy A Plan - hard or soft – may be discussed as one possible avenue - but not the only one.
    • Hard freeze – years-of-service and Final Average Earnings freeze - potentially more desirable by the company because it would end their legacy-plan liabilities sooner, but with the potential to add more value to any new plan design.
    • Soft freeze – normally a freeze of years-of-service while Final Average Earnings continue to accrue - potentially more beneficial for some pilots.
  • Without the salary and years-of-service caps that are in our legacy plan, this VB plan should require far less attention and bargaining capital in future collective bargaining.
  • Advantages to negotiating our retirement outside of Section 6:
    • Value created by reducing the company’s financial liabilities associated with our current A Plan can be extracted for direct investment into a VB Plan.
    • The sooner a VB Plan begins making money the sooner we address the deficiencies associated with the A Plan.
    • There is no requirement for either party to negotiate outside of Section 6 negotiations. Walking away is a viable option for both sides.
  • There will be no “sell job.” This plan should sell itself.
  • Please have patience while we disseminate information for various knowledge levels. Remember that nothing will occur until after the information process is completed and pilot support has been clearly measured.

We believe that this plan creates enough value for the company to want to discuss this now, however it is yet to be determined if anything will happen. Our current research and development on retirement may very well become a part of our openers in 2021.

As we all process this information, we welcome any questions, and appreciate any feedback. Thanks for staying engaged.

See you on the line,

Michael Arcamuzi
Block 11 Representative 901-210-0701

Pete Harmon
Block 3 Representative

Anita Shew
Block 6 Representative

Rich Odbert
Block 11 Representative Elect

Eric Armstrong
Block 6 Representative Elect


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