I am not referring to 401k.
I am referring to the A-fund or A-plans as they are variously called which are a defined benefit retirement plan. Those are the plans that are the bread and butter of an airline retirement. They are generated by a multiplier (1.5% at American or 2.0 percent at Continental for example, ) times length of service times at the average of the highest of 5 of the last 10 years income. It provides an anuity based on the number that you come out with. Somewhere around 50 percent or so of your last years salary for the rest of your life. Some people then sell the annuity to get a lump sum payout because of survivor issues with the annuity.
Vesting has nothing to do with 20 years. Its starts immediately, but you can't collect till you are 60.
The B fund at an ailine is a defined contribution plan and works very similar to a 401k without requiring an employee match first. Some airlines then have 401k (with no match, that is provided by the befund already) as well for a vehical to serve yourself.
In any event the cash value of the annuity is severly degraded by continuing to work as it is calculated vs your life expectancy, and if go out early the courts have ruled its is generally a 6 percent per year hit. In rare cases airlines have negotiated an early out usually to avoid a furlough (which most contracts then forbid overtime during and removes flexiblity during scheduling). During the early out the airline has to kick in dramatically more money to make up for the fact that the A fund is no longer conforming and pay the differences (100s of thousands of dollars, effectively it is just as cheap to convert it to a no show job)
I thought you used to work for TWA. How come I have to explain basic pensions and tax law? (not meant as a dig, just thought you were retired TWA)
Cheers
Wino