The negotiating committee met in Houston, Texas from June 1, 2009 thru June 4, 2009. In an effort to help move the process forward the committee strategically prepared counter proposals for several of the open Articles.
One of the hot topics, especially in light of our recent shift bid, was imploring the Company to implement an electronic format for bidding. While there is some upside to having the Union Stewards present during the shift bid there is a tremendous downside as well. With nearly 500 members in Bid Area 101, the handling of a shift bid utilizing this type of manual bid procedure is highly conducive of errors. Our current Collective Bargaining Agreement (CBA) provides the ability for the Company to employ a technological bidding process. We urge you to convey your desire for this type of bidding process to management. Article 7.K of our CBA defines the shift bid process.
On June 3, 2009the Company gave us a presentation concerning the upcoming implementation of the 401K enhancements. The 401K enhancements were originally scheduled to be implemented last year. Due to tremendous market volatility and the concerned feedback and questions from this Union and various other work groups the program was postponed. The purpose of this presentation was to outline the changes from the previously planned implementation.
The Company’s implementation schedule is as follows. During the week of June 15, 2009 the Company will be mailing (also available online) the Fund Election Kits. They will include the following titled materials, “What You Need to Do” guide, What You Need to Know” guide, “Fund Comparison” guide and a “Fund Fact Sheets”. The Company will begin road shows from July 6, 2009 thru August 7, 2009. The election period will begin July 13, 2009 and end at 3:00pm CST on August 14, 2009. The systems New Investment Option Lineup will be live September 1, 2009.
There will be three (3) types of investment options or categories if you will. The first will be “Retirement Target Date Portfolios”. This will be for employee’s who want a simple investment solution where professional investment managers do all the work based on the employee’s target retirement date (with age 65 being the default date).
The second category will consist of “Core Portfolios”. This will be for those employees who want to build their own investment mix using a core set of best-in-class investments (i.e.: Small-Mid Cap Equity Portfolio, Large Cap Value Equity Portfolio, Fixed Income Portfolio, Stable Value Portfolio, Large Cap Core Portfolio, International Equity Portfolio and Large Cap Growth Equity Portfolio).
The third category will be a “Brokerage Account”. This will be for those employees’s who want more choices among literally thousands of mutual funds, individual stocks and bonds.
If an election is not made during the election period, your current 401K Savings Plan account balance and future contributions will automatically be invested in the “Retirement Target Date Portfolio” closest to the retirement date that assumes normal retirement at age 65.
All of the mutual funds currently offered will be available in the new program through the “Brokerage Account” option with no commissions and no transaction fees. The only exceptions will be that the T. Rowe Price Equity Index Trust Fund and the T. Rowe Price Stable Value Fund will not be available (also CAL stock will not be available). In addition, all other investment options will be made available, however transaction fees will apply. The Company is currently negotiating for the best available rates concerning these type fees.
One of our previous concerns was the time an employee was out of the market and respective volatility during the transition period. According to CAL, any of the present funds may be kept with no liquidation required. In other words there will not be a sale and re-buy when transitioning. Shares will not be out of the market and the number of mutual fund shares will remain unchanged. However, shares will be unavailable to trade for about 2 weeks (
The information provided in this update is to outline what we have learned during the Company’s presentation. We are sure there will be more concerns and questions that arise as the process and road shows unfold. Please pay close attention to the literature and road shows and make sure all of your questions are answered before you act. If you have any questions that go unanswered please forward those to the Union office so we can get them addressed.
We would like to make one last point concerning the “Brokerage Account” option. While we understand the ability of this type option to entice employees to utilize more riskier vehicles of investing we urge you to please be cautious when dealing with individual stocks and any of the various exotic investment options that may become available (i.e.: options, calls, puts etc.). While there may be great reward there is also tremendous risk with many of these type investments.
Thank you for your time and if there are any questions feel free to contact the Union office.