Rod,

   I think that the only way we can push is 401k......with greatly increased contributions. If Sanger is true to his word (I know thats a stretch), then this is a true possibility with great inhancement of our benefits.

   Pensions have TONS of problems. The biggest being you must totally trust the company you work for to truly keep that fund a loft with GIGANTIC sums of money. What they generally turn into is a savings account for the company that will eventually fall on its face....A real example our current Medicare system is used the same way by our government and look where it sits. So where does the employee end up when this happens, sitting on the beach BROKE hoping someone will give you some money.

Great topic idea........hopefully lots of ideas are on there way.

Mark T      AMR Shasta

Hi all,

Just got back from a fun-filled week in Cancun, Mexico.  The weather was great and we missed all the hurricanes (whew!)  I've been trying to get caught up on all of the posts.  Looks like a lot has happened during the past week.  I thought this would be a good topic to jump back into.

For the past 5 years, I have contributed to the 401k plan.  While the law says I can contribute up to $13,000 per year, due to poor employee participation in the plan, The IRS has limited me to a max of $7200 per year.  Now at my (slightly advanced) age, I need to maximize my investments if I plan on retiring before the age of 80.  I just can't do it with the 401k. My girlfriend, (who happens to be a CPA) tells me that over the past 3 years most 401k plans have actually lost value. This dosen't sound like a good investment to me.

While some companies have indeed defaulted on their pension plans, the great majority of pension plans are stable and therefore offer employees a defined benifit which they receive for the rest of their lives.  The 401k on the otherhand is like a savings account with a fixed amount in it and will therefore be depleted during retirement.

Therefore, I am a strong advocate of the pension plan system.  I want to know that I'll have a paycheck until the day I die.  I believe this is an issue of utmost importance, and one we need to be unified on in order to force AMR to provide us with the benifits we deserve.

Roland Guy, RN NREMT-P

CoCo shop steward

Your not a dumb ass for asking this question.  A pension is the most important task for EMS to obtain.  Every public safety occupation has some kind of retirement plan that allows you to vacate your career that beats your body to death prior to your early death.  Police and Fire die young.  There is not much proof out there for EMS since EMS beats bodies so badly that people have no staying power for an entire career of 20-30years. 

If you want a retirement plan, you have to pay for it.  The pension can be provided to you but it will come at a cost of your salary cola being less.  It may water down your benefits.  It will harm something.

We should go for a pension though because social security is not enough.  We should do what we need to do to get a pension.  You just have to ask yourself, Salary or Retirement?  You can't have it all.

401k is ok but a pension plan is far superior.  401k is just a way to shelter money from taxes.  It truly only helps people in high tax brackets looking to decrease what they have to pay in taxes.  401k is not a good retirement plan.  It is a bonus plan to have play money in retirement.  Calling a 401k a retirement plan is like calling .............can't think of an analogy that is relevent.  I just don't think highly of the 401k alone.  It is a fantastic benefit you should use immediately since your employer matches your contribution.  It is a great system, just incomplete.

Forfend,

Let me play devil's advocate.

It is not a good way, but a great way to reduce your income tax. (For Lucinda) These are pre-tax contributions. Let's use even numbers for simplicity. You put a dollar into this account, and your employer matches your contribution, up to a certain percentage. If it is a dollar for dollar match, you've earned 100% on your earnings right off the bat. You have your choice of different types of funds to put these monies into, ranging from money markets to high-risk high-return mutual funds. Let's say in one year you make 40,000 dollars gross. If you put 10,000 dollars into your 401(k), you can only be taxed on 30,000 dollars. That is another big bonus. The other bonus is you are the account manager. You can change funds, change percentage of your own contribution, etc. You cannot start taking money out until 59 1/2 yrs of age, and must start taking out by age of 70. You can take out loans on your account for up to half of the vested amount ( I think that is right), and pay yourself back. The interest rate you pay to the 401(k) provider is 1% over prime. If you change employers, your 401(k) can be rolled over into IRA's so you won't be penalized ( the penalty, if memory serves me correct, is 15%, but I'm not totally sure). It is the smart thing to get into, especially since it is the only device we currently have. When we were AMR prior to being bought by Laidlaw, we also had a stock purchasing plan, after the IPO (initial public offering) which was around 6 bucks for employees. Those that held on sold them at 44 or so dollars per share. The problem is year after year the IRS limits our 401(k)contributions to $7500 because we do not have enough people in the plan. Those of us not getting any older are realizing we are not going to be able to make our financial goals for retirement. AMR has been completely unwilling to entertain a pension, then to add to it the fact that they do a **** poor job of marketing their own 401(k) plan. These are not things a quality employer does. There needs to be a big change in attitude here from AMR. (if I've made mistakes on the 401(k) rules, pls feel free  to interject, won't hurt my feelings whatsoever).

I highly recommend, until we do get a pension that everyone can live with, to get involved in the 401(k). You begin earning immediately, not to mention a reduction in your taxes.

Thank you,

Rod

   We discussed the pension issue during the last contract and it was soundly rejected..and for good reasons. Please get the idea of private pensions being anything like public service pensions out of your head...they are nothing alike! They are nothing more than crooked unions supporting crooked politicians who turn around and bump up pension benefits that they all collect! And paid for by taxpayers! So it is easy for cheif of CHP to fall out of his chair in his office and collect 150K/yr. like 90% of the rest of them do!

   As far as our 401k's go, they are the best thing out there and continue to be so! That is why they were created! Every year over 1000 pension funds go bust (or stollen by unions or companies) and recovery of those funds takes years and at a fraction of their value. And the US Pensions Security Fund is currently 500 billion dollars in the hole. So not much insurance if someone ends up in the Caymen Islands with your retirement funds. 401k funds are yours to keep and manage as you see fit and can never be taken away! Change jobs, it's yours! Get hurt, it's yours! Failure or success to pay attention to your money, it's yours!  It will be a cold day in hell before I let AMR or SEIU control my money!!!!!

   As for the very few restricted in their contributions to below the 13k max, we too bad for you. Last year there were only 20 people in all of AMR that it applied to! And those were people makeing over 90k/yr. So pardon me for not getting  upset that you have to go open a roth account also. Had you very few (and our wondefull union) not been pushing to rob me of my 401k funds to join some pathetic pension scheme and actively educated the membership of the importance of our 401k plan, perhaps more members would be contributing over the years! But for everyoneone under 90k/yr, you are entitled to contribute the maximun of 13k/yr + AMR's 5k-7K =20K/yr possibly going into your retirement account. After 30 years that will net you nearly 2 million dollars!  2 million that is yours and can never be touched by anyone but you! 

   Since the idea that AMR is going to spend a few million dollars to "back-fund" a pension is a pipe dream, the best we could ever get is for them to start one today and go forward from here. Not to attractive to those who have been here for 10 years. Time is everything in investing, and all those years of seniority would go by-by in a pension plan!  I made 42% in my 401k during the 2002/2003 market rise and have only lost 3% this year since I pulled out of the market! If we had a union that cared about the membership instead of it's greedy grab for our 401k cash...everyone could have done the same!

Good to see you here Kevin. I hope all is well.

You sound like you are market savvy, and have a good idea when to transfer funds when the market so dictates. That is important to come out well in a 401(k). I think you and I both agree (?) that dollar cost averaging ain't gonna do it by itself.

However, there are many people that are not market savvy, and they do not want to put that kind of energy into their retirement (other than the hard work while actually at work), and they prefer to have it there when they are done <BTW, I also read the Sacramento Bee's exclusive on the CHP's nonsense over medical retirements....I cannot believe that this is still going on over there>. Even people that stay up to the minute on the market still get it wrong. What do we say to those people?

Yes, I said that to entice not only Kevin to respond, but everyone as well. I'll be damned if one person is going to make up everyone's mind on this. This is going to be collectively decided upon.

Pardon while I sit on the fence, but I am not going to make up my mind until I see exactly what type of pension, if we do decide on that, is being offered. I also do not want to set my mind until we figure out who bought AMR. I think this is critical. Unfortunately, I realize I may not have that kind of time to play with.

Let's keep this thread moving.

Thank you,

Rod Billings, Shop Steward, AMR CoCo Operations

Thank you Erin.

My goal is not to shoot Kevin down here. I think he can make 2 million dollars when it's all over with said and done. I don't think most can though as an educated guess. I think he makes some very good points that everyone should be aware of. I know there are people out there that believe pensions are being forced down their throats. I like my 401(k). But I also will not close my mind to other options. I just want to see this other option before it has been decided upon for us. Kevin is not the only person to bring this up. I have people in my county that feel the same way he does. If I am going to be a shop steward for this union, then I must concede and respect the wishes of these members.

Kevin,

That is true. However, a union is supposed to guide members in negotiating with the employer to get better benefits (retirement). And, we did improve our 401K contributions in last negotiations. I don't recall a pension being on the table last negotiations. In any event, I'm interested in the union based pension programs. I attended a pension workshop at the 250 leadership conference 2 years ago, and had a lot of unanswered questions. What corruption with union's and pensions are you referencing?

Kevin,

Just so you know, there is no sarcasm intended in my post. I am elated you have been posting. These are exactly the kind of posts I was hoping for. I'd like to see more, not only from you, but others as well.

Let's keep this thread going. We have an issue, and it needs to be worked out by us.

Rod

Like I said

Good luck