United Pilot Agreement

United Negotiating Committee

Financial Highlights of the 2023 Contract

By: Wayne Worthington, CFA, CFP®

Do you have questions about the 2023 United Airlines pilot tentative agreement and how it will affect your retirement flight path? We have gathered a summary of financial 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 your Smith Anglin advisor for further advice.

Five Major Financial Topics:
  1. Increase pilot compensation by 13.8% – 18.7% immediately and 35.3% – 37.1% cumulative through 2027.
  2. The Company profit sharing plan shall be funded with 10% on pre-tax profit up to $2.5 billion of pre-tax profit, plus 20% on pre-tax profit in excess of $2.5 billion of pre-tax profit.
  3. Increased Company Retirement Contributions into the PRAP. Increasing to 17% in 2024 and to 18% in 2026, including Profit Sharing pay.
  4. Establish a Market Based Cash Balance Plan (MBCBP). Contributions to the 401(k) plan that exceed the yearly IRS limit may be directed to spill-over into the MBCBP and/or the RHA.
  5. Retroactive pay, taxable in 2023. 4% of 2020 & 2021 pay; 14% of 2022 and 2023 (up to DOS).
Compensation - Top Pay Scale Proposed (Hourly):
  • Immediate pay rate increase of 13.8% – 18.7%. Pay will increase a total of 33% – 38.8%, compounded over the next 4 years.
  • Pay rate increases for years of service span over 12 years. (Excluding A380.)
Pilot Type Oct 2023 Top Pay Increase Jan 2027 Top Pay Increase
Widebody Captain
$421.72 / hour
$493.31 / hour
Widebody First Officer
$288.07 / hour
$336.97 / hour
Narrowbody Captain
$353.00 / hour
$412.92 / hour
Narrowbody First Officer
$241.10 / hour
$282.03 / hour
Company PRAP Contributions (401k):
  • The Company Contributions will increase to 17% in 2024 and to 18% in 2026.
  • Company Contributions that flow over the IRS 415(c) limit will spill over to the RHA or MBCBP.
  • Company Contributions do not max out. (Estimated IRS limit increase of 3% annually.)
Effective Date % PRAP Contribution MBCBP/RHA Contribution
Jan 2024
Jan 2025
Jan 2026
Pilot PRAP Contribution Strategy:
  • Pilots now can save and invest much more for retirement.
  • The Maximum compensation limit of $330,000 can be surpassed for retirement savings.
  • Up to $50,000/year more than before if the right strategy is elected.
  • The proper Pilot deferral election is more important than ever.
Market Based Cash Balance Plan (MBCBP):

Proposed New Pension Offer

  • United will establish a new Market Based Cash Balance Plan.
  • Company Contribution in excess of the PRAP limit will now spill-over to the MBCBP/RHA.
  • The MBCBP will be invested by a trust with a target stock allocation of 30%.
  • The MBCBP can be paid out as a lump sum or as an annuity.
Retro Pay Bonus:

Pilots with earned income in 2020 thru Sept 2023 will receive a retro-pay bonus check.

  • United will pay 4% of 2020 and 2021 earnings, and 14% of 2022 and 2023 earnings to DOS.
  • This Retro pay applied to retirees. (Does not include VSL pay.)
  • Retro pay qualifies for the Company PRAP contributions.
Wayne Worthington

Wayne Worthington brings over 30 years of experience to Smith Anglin Financial. He regularly meets with prospective clients and counsels existing clients, with a primary focus working with FedEx and United pilots. Wayne earned the Chartered Financial Analyst (CFA) designation and is a CERTIFIED FINANCIAL PLANNER® professional. He holds an MBA from Boston University and an engineering degree from Iowa State University. Wayne has also enjoyed being an adjunct professor of Corporate Finance at the university level.

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.

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