Southwest Pilot Agreement

Southwest Negotiating Committee

Highlights of the 2024 Agreement

By: Weston Pollock, Partner and Wealth Advisor, and Jack Snider, Wealth Advisor.

Do you have questions about the new 2024 Southwest pilot agreement and how it will affect your retirement flight path? We have gathered a summary of key data about the new agreement. Please note that this is not an exhaustive summary of the provisions in the agreement, nor is it intended as advice. We recommend you speak to a Smith Anglin advisor for further advice about the Southwest Airlines pilot contract.

Primary Updates to Your 2024 Contract:
  1. The Market-Based Cash Balance Plan (MBCBP) is established.
  2. Profit sharing rollover options and changes to your profit sharing deferral options.
  3. Increased company retirement contributions into your 401(k) plan.
  4. Ratification of bonus/retro pay.
  5. Increase in pilot compensation.
Market Based Cash Balance Plan (MBCBP):
  • Southwest will establish a new Market Based Cash Balance Plan.
  • Wages below the IRS 401(a)(17) limit of $345,000 will be eligible for qualified MBCBP credits.
  • Southwest will contribute 1% of your 2024 wages to your MBCBP in 2024 and 2% per year starting in 2026.
  • The MBCBP will be invested by a trust with a target allocation of 40% stocks / 60% box mix.
  • The MBCBP will offer in-service distributions beginning at age 59.5 if the account balance exceeds the accumulated pay credits. You will be allowed one in-service distribution per plan year.
Southwest Profit Sharing Plan:
  • Southwest pilots with five years of service or more are eligible to transfer their profit sharing from Empower to their Schwab 401(k). This is a one-time transfer.
  • When a pilot reaches age 59.5, Southwest will allow, once per calendar year, a pilot who is 100% vested to transfer some or all of the pilot’s Profit Sharing Plan account balance to their 401(k) account.
  • Southwest has adjusted the profit sharing deferral rate options to 3.5%, 7%, or the actual profit sharing percentage calculated by the company for the plan year.
Southwest NEC (Non-Elective Contribution) 401(k):

The company NEC will be 15% at the date of ratification. The NEC will then increase to 17% at the second paycheck advance, but no later than 60 days after the date of ratification. It will then increase to 18% on January 1, 2026.

Effective Date % NEC Maximum 401(a)(17) Contribution (per year) MBCBP/Non-Qualified Contribution
Within 60 days of Ratification
January 1, 2026

*Please note that the NEC contribution is based on your annual pay and could be less than the maximum contribution listed above.

Ratification Bonus/Retro Pay:
  • Southwest will pay 1.5% of pilot’s 2020 year earnings, 5.6% of pilot’s 2021 year earnings, and 14% of pilot’s 2022 year earnings.
  • Southwest pilots are eligible to direct their bonus pay as a contribution to their 401(k) plan.
  • Tax withholding on bonus pay has yet to be released as of January 9, 2024.
Pilot Compensation:
  • Southwest pilots will receive a 29.15% pay increase at the date of ratification, followed by 4% pay increases in 2025, 2026, and 2027. They will receive a 3.25% pay increase in 2028.
  • See pay tables below:
Captain Pay Table
YOS 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
First Officer Pay Table
YOS 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028

Your Smith Anglin advisor will provide you with further information.

Weston Pollock

Weston Pollock brings over 30 years of sales and business development expertise to Smith Anglin. He received his Bachelor of Business Administration degree in Finance and Real Estate from Baylor University, and is a licensed securities and life insurance representative. Weston’s primary role is leading the firm’s marketing and business development efforts with a focus on Southwest Airlines.

Jack Snider

Jack Snider is an Arkansas native from Little Rock who received his bachelor’s degree in finance and accounting at The University of Arkansas. He is a licensed investment advisor and has been a valued member of our advisor team for seven years. He specializes in working with the Southwest pilot community and is well-versed in its retirement benefits. This expertise enables him to assess our clients’ specific needs when planning for their retirement. He is passionate about helping others whether in or out of the office and strives to provide first-class service daily.

The information contained in this white paper is provided for general informational purposes only and does not constitute legal, financial, or investment advice. The content is based on our understanding of retirement benefits and election options offered in the upcoming contract. Smith Anglin Financial, LLC is not affiliated with ALPA or Fed Ex. While we have made every effort to ensure the accuracy of the information provided, we make no representations or warranties of any kind, express or implied, about the accuracy, reliability, suitability, or availability, with respect to the content contained herein. Any reliance you place on such information is strictly at your own risk. Furthermore, this white paper does not create a client relationship between the reader and our organization. We strongly recommend consulting with your financial professional, before making any decisions or taking any actions based on the information presented in this white paper.

It is important to note that the retirement benefits and election options discussed in this white paper may be subject to change. Regulations and policies can vary by jurisdiction and are subject to updates, amendments, or revocations. We do not guarantee the continued accuracy or applicability of the information provided in this white paper in the future. This white paper is not an offering or solicitation of securities or investment products. By accessing and reading this white paper, you acknowledge and agree that our organization and its representatives shall not be held liable for any direct, indirect, or consequential damages arising out of the use or reliance upon the information provided. You further agree to release our organization from any and all claims, liabilities, or losses that may arise directly or indirectly from your use of or reliance on the content in this white paper.

Smith Anglin Financial, LLC (“Smith Anglin”) is an SEC registered investment adviser (RIA) located in Dallas, Texas. Smith Anglin and its representatives are in compliance with the current registration and notice filing requirements imposed upon SEC registered investment advisers by those states in which Smith Anglin maintains clients. Smith Anglin may only transact business in those states in which it is notice filed, or qualifies for an exemption or exclusion from notice filing requirements. Any subsequent, direct communication by Smith Anglin with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of Smith Anglin, please contact the United States Securities and Exchange Commission on their web site at A copy of Smith Anglin’s current written disclosure statement discussing Smith Anglin’s business operations, services, and fees is available from Smith Anglin upon written request. Smith Anglin does not make any representations as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Smith Anglin’s web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Securities offered through Purshe Kaplan Sterling Investments (PKS), Member FINRA/SIPC, headquartered at 80 State Street, Albany, NY 12207. Investments through PKS or RIA are not FDIC insured, not bank guaranteed and may lose value, including loss of principal. Not insured by any state or federal agency. Purshe Kaplan Sterling Investments and Smith Anglin Financial, LLC are not affiliated companies.

Weston Pollock
Jack Snider

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