One of the things lots of us consider before making the big decision to work for a company is what the retirement or pension plan looks like. After devoting most of your youthful years to working for a company, part of the benefits you expect to get in return is a company system that would help you plan for a financially stable life upon retirement. If you currently work with Delta Airlines or are gearing toward working for them, you’re probably already wondering and asking questions like this about Delta Airlines Retirement or Pension Plan plan is for their employees. Well, let’s find out!
Does Delta Airlines have a Retirement or Pension Plan?
Pension plans are more or less retirement plans and this is one benefit that Delta Airlines offers its employees. During the employee service time, Delta Airlines deducts a fixed amount of money from their employee’s monthly salary. These monthly deductions form the employee’s savings/investment fund which they pay them back regularly when retirement eventually kicks in.
Delta Airlines has employees ranging from the administrative staff to the design and software engineers, sales personnel, flight attendants, and pilots and each of these employees has specific pension types that they are entitled to.
Retirement Benefits for Employees
Delta Airlines employees, particularly pilots are one of the highest risk-high pay Delta Airlines employees and as such, they enjoy the most pension plan. The Delta 401(K) is the most common Delta Airlines retirement benefit for all Delta employees- pilots, flight attendants, accountants, and so on. Pilots at Delta Airlines also enjoy the Delta Pilots Savings Plan (DPSP) in addition to the 401(K) plan.
Delta 401(K)
Delta 401(K) is one of the predominant means through which Delta Airlines employees save for retirement. This Pension plan requires that a fixed amount of money, which is deducted with the employee’s consent and is typically a percentage of every employee’s paycheck is directed to the employee’s 401(K) funds.
With the Delta 401(K), Delta Airlines employees enjoy tax advantages on the money they contribute towards the 401(K) plan. This is possible through the two key 401(K) investment options: Traditional 401(K) and the Roth 401(K).
Traditional 401(K)
In this 401(K) option, contributions are deducted directly from the employee’s payroll before tax deductions are made. This, therefore, reduces the total employee income that is taxable at the end of the year.
Roth 401(K)
In this 401(k) option, contribution deductions are made after the employee’s income has been taxed. This implies that at the end of the year, employees do not have to worry about their income being taxed further.
Delta Pilots Savings Plan (DPSP)
The Delta Pilots Savings Plan (DPSP) is one of the most common retirement benefits after the Delta 401(K) and only pilots can enjoy the benefits from this plan. Like the 401(K), DPSP is a defined contribution plan, through payroll deductions, that is subject to the requirements of the Employee Retirement Income Security Act of 1974.
This benefit is mandatory and as such, although there is room for you to enroll for this plan, if 90 days after you were hired as a Delta Airlines pilot, you do not enroll, this will be done for you automatically at a 3% pre-tax contribution rate. One benefit of enrolling is that you get to decide how much contribution rate you want as opposed to the automatic enrollment.
Delta Airlines Retirement Plan Administrative Committee
Delta Airlines set up a committee that is in charge of the operation and administration of the employee Retirement Plan. This committee comprises the Board of Directors.
The investment management and control of assets are, however, under the administrative responsibility of the Benefit Funds Investment Committee (BFIC). This committee is in charge of reviewing the financial operations of Delta Airlines to ensure that all employee contributions are properly accounted for.
The Delta Team
This team consists of a group of Delta Airlines employees tasked with the responsibility of helping Delta Airlines staff plan for retirement by answering the “when would you want to retire, how much do you want to save, and what the long and short term financial goals are” questions. This helps the Delta employees get a sense of the contribution rate that would help them achieve these goals.
The Delta Team consists of Certified Financial Planners, Chartered Retirement Planning Counselors, and Certified Divorce Financial Analysts.
Conclusion
Delta Airlines provides pension benefits for its employees. This means that as a Delta Airlines employee, by the time you retire, there’s money saved up somewhere for you, courtesy of Delta Airlines. You can also choose to employ the services of Delta Airlines Investment partners (RAA) to assist with your financial planning.
Frequently Asked Questions
What percentage deductions are made in the 401(K) for each payroll?
The amount that would be deducted from your payroll is flexible. You are at liberty to decide the amount that you want to contribute monthly to your pension fund. As a rule of thumb, about 10%-15% is feasible. However, since Delta Airlines offer a matching contribution, take advantage of this. You can employ the services of financial planners such as RAA to help you plan properly for your retirement. https://raa.com/airlines/delta/
Are there limits to how much I can contribute to my pension fund annually?
Yes. The Internal Revenue Service (IRS) has put a $20,500 limit to the annual contribution that employees can make. However, employees above 50 years are permitted to make “catch-up” contributions. This means that these one are allowed to contribute beyond this $20,500.