CAP pensions

[Pumbaa]

It would seem the simplest thing to do would be to set up a matching 401K type plan.  I believe that is a 403b in the non profit arena.  You contribute and CAP matches a percentage.  The percentage match could be based on years of active service.

This way it is a voluntary program.  If the person does not contribute no matching funds.

Simple...

[Ned]

Although we still don't have a idea of the "problem" we are trying to solve, some of the math is sort of interesting.

There are a bunch of financial calculators available on the web.

If we start with the notion that a "retired CAP AFAM mission guy pension" should be something like $5/mo after 20 years service, that sounds like about $1,200 a month or so.

I found a couple of companies that would sell an annuity that would guarentee a 60 year old guy $1,200 a month for life for only $187,000 or so.

And using a 401k calculator, I learned that if you put only a little over $500 a month/$6,000 a year into a 401k for that 20 years, and assume a return of 4% a year, you can come pretty close to the $187,000.


So, using the figure provided above of approx 2,400 folks that might qualify for such a thing times the $6,000  in yearly contributions that would be required comes out to something like 14 million dollars a year.

Or something like three to four times the entire amount of dues paid every year by all the members combined.

Just to fund the pensions.


Maybe it's just me, but that sounds like a little to much for a recruiting incentive.

And you guys thought the race car was a bad idea. . .

[RiverAux]

If we start with the notion that a "retired CAP AFAM mission guy pension" should be something like $5/mo after 20 years service, that sounds like about $1,200 a month or so.

Well, maybe I didn't phrase it as clearly as I should.  For every year of service you get $5 per month.  So, 20 years of service would be $100 per month (The program I used as a model has a $200/month cap for volunteers -- 40 years service).  Recalculate using the right figures and see what you get.

[Ned]

Much better.

To reach your $200/yr after 40 years figure, a 60 year old guy would need to purchase an annuity for a little over $30,000.

A 401k would need contributions of little under $400 per year to get there after 40 years.

And you do know that $200 a year works out to the princely sum of 54 cents a day, right?

So, our hypothetcial 2,400 pension-earning ES gods would only need a hair under a half million dollars a year in funding to pay for  their 54 cents a day for life.

Another way to look at it would be to assume that about it takes the dues of about 7 other members to support the pension funding for our "AFAM ES guy", so she/he could get their 54 cents a day after 40 years.



You were right, the numbers scrub out much better that way.

[RiverAux]

Even better if we assume that most participants would only have 20-30 years of service and if we assume the participant has to kick in a little as well. 

Sure, the pension isn't amounting to a ton of money, but it might help.  I looked at my 2008 Social Security statement and if I stopped contributing today and retired  at 62, I would get $1,200 per month.  A $100/month on top of that would be a 8% increase in my monthly income -- not bad.  Heck, in my current real job if I got promoted I couldn't get that big an increase in my monthly income. 

[lordmonar]

1.  Go with the volunteer firefighter benefit I mentioned at the top of $5/month X years of service.
2.  Limit it to those who have actual retired from CAP service (requires 20 years) and assume all participants have only the minimum years == Participant benefits would then be $100 per month = $1,200/year.
3.  Assume that 7% of CAP seniors stay in long enough to retire (not out of line based on a quick look at the number of people in my wing who have been in over 20 years).  == 7% of 35K = 2,450 people
4.  For the sake of argument assume that 25% of all seniors who reach CAP retirement have been aircrew qualified for that whole period and are eligible (probably not a bad estimate based on what is shown on the Homeland Security page).  2,450 people X .25 = 613
5.  So, we're at 613 CAP senior members who would be eligible to get the pension. 
6.  Assume that half of all eligible retired and started getting benefits right now.  307 eligible X $1,200 per year = 1st year cost of $368,400 + 10% admin = $405,240.

So basically you are talking about one new air plane a year..... 

Also....if you give a monitary benifit you can expect a higher retention rate and more people getting and keeping rateings that make them eligible for the pension.

I vote we just buy the plane.

[D2SK]

 

[Climbnsink]

No new taxes.  Geez we are volunteers, not employees.  Leave the taxpayers money alone.   I feel guilty enough flying stuff subsidized by the poor taxpayers. 

[RiverAux]

Also....if you give a monitary benifit you can expect a higher retention rate and more people getting and keeping rateings that make them eligible for the pension.

Yes, I would probably expect it to help in those areas to some extent, and it might also help in recruitment of younger senior members (Someone that is already 60 isn't going to get excited about a benefit that they wouldn't be eligible for until they're 80).   Even if we restrict it to aircrew members, I suspect it would help us in retention of mid and high-level mission staff since many members who are in CAP that long also advance up the ES chain.  One could argue that the side benefit of keeping those people around might outweight the benefit of retaining aircrew members since it is a lot easier to train a new scanner than a new AOBD. 

It would be interesting to see some stats on average length of service in volunteer fire departments with pension plans vs those without them to see what kind of effect it has in those areas. 

However, I would still look at it primarily as a reward for faithful service to the federal government. 

[BillB]

If you gave "pensions" to air ctews, why would anyone work groundteams, or mission base? Or if you're going to gibe it to air crews and ground teams what do you do about the cadets who normally comprise 50% of a ground team Seems like you are creating a class structure for a very small number of members.

[A.Member]

Would you be in favor of having CAP lobby the feds to get some form of reduced benefit pension program for volunteers?

No, and I find the idea rather bizarre.  

As noted, as volunteers we do not earn monetary compensation in this organization, this is just one significant difference from volunteer police/fire organizations.

[A.Member]

No new taxes.  Geez we are volunteers, not employees.  Leave the taxpayers money alone.   I feel guilty enough flying stuff subsidized by the poor taxpayers. 

:clap:

[A.Member]

However, I would still look at it primarily as a reward for faithful service to the federal government. 

The reward is knowing that you've served your community and country while hopefully making a positive impact on a few lives along the way.

[RiverAux]

If you gave "pensions" to air ctews, why would anyone work groundteams, or mission base? Or if you're going to gibe it to air crews and ground teams what do you do about the cadets who normally comprise 50% of a ground team Seems like you are creating a class structure for a very small number of members.

Well, as discussed earlier, those who are risking the most in service of CAP and the federal government are the aircrews.  Recognition of the risks of flying as "hazardous duty" in many government agencies and I don't know if it is still the case, but I think that at one time this happened in the military as well.  Along with that recognition came extra benefits.

I don't think we have to worry about all our hard core ground team members dropping that in order to fly so that they can participate in a pension program. 

All that being said, I'm not opposed to having such a program open to all CAP members, its just that I don't think we would be able to get it approved if we did.  The justification would be weaker and the costs would be higher. 

As noted, as volunteers we do not earn monetary compensation in this organization, this is just one significant difference from volunteer police/fire organizations.

Volunteer firefighters and policemen are no different than CAP members in that they are not paid.  So the comment above doesn't make any sense to me.

[A.Member]

Volunteer firefighters and policemen are no different than CAP members in that they are not paid.  So the comment above doesn't make any sense to me.

I'll admit I'm no expert on the topic but this is not the case for the ones I know of in my area.  Certainly, they won't get rich (that's not why people volunteer anyway) but they are paid either on an per call or on-call basis.  It's possible that the source of payment may come from areas outside the city but they do receive some compensation; even if the payment is in the form of a pension and/or other benefits.  It's my understanding that there are only a handfull of true full-time (paid), firefighters in my state.  This may not be the case nationwide, I don't know, but it's been the case here.

[Climbnsink]

Just because some volunteer firefighters get pensions doesn't mean that all volunteers should get pensions.   I hope that Vol. FF pensions are voted on and paid entirely by the local community.  Otherwise it's another taxpayer ripoff/redistribution nonsense.   Just one more tax for a worthy cause- no thanks. 

[RiverAux]

I'll admit I'm no expert on the topic but this is not the case for the ones I know of in my area.  Certainly, they won't get rich (that's not why people volunteer anyway) but they are paid either on an per call or on-call basis. 

Well then they are part-time firefighters, not volunteers.  There is a difference. 

[PaulR]

No new taxes.  Geez we are volunteers, not employees.  Leave the taxpayers money alone.   I feel guilty enough flying stuff subsidized by the poor taxpayers. 

Amen!!  Next thing we all know, the Coast Guard Auxiliary, the Boy/Girl Scouts, and the Police Explorers will want some sort of similar deal.  No way.  From what I understand, our new Leader wants to raise our taxes more as it is...  

[Ned]

]Well then they are part-time firefighters, not volunteers.  There is a difference. 

You will find that there is no "bright-line" definition between volunteers and part-time.

Many receive no pay at all and have to buy their own equipment.

Some receive uniform allowances that allow them to buy their own uniforms and equipment.

Some receive nominal fees for each month or even each call-out.  This is often done to help establish that they are "employees" for workmens comp coverage, but the fees are in the $10 a month/call out category.

Some receive a little more -- perhaps $2-3 per hour to compensate for uniform and equipment cleaning and maintenance.

FWIW, when I was a reserve cop, we were required to volunteer at least one shift a month, but could also work the same outside pay jobs (directing traffic at construction sites, school dances, concerts, etc) that the regulars could.  Some guys worked essentially full time as "reserve cops" and made a good living.

So, in the real world it can be a little fuzzy when drawing the line between "volunteer" and "part time."

Fortunately, in CAP we are pretty clearly volunteers under almost anyone's definition.

[RiverAux]

I think we're straying a bit, so won't respond beyond to say that there are similar gray areas involving CAP volunteers as well.