15% provident fund Q
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15% provident fund Q
Hello all,
Question for a potentially NA based fr8ter guy. I heard that most guys take the 15 % as cash. Is that 15 % of $5400? So, an extra $800 a month (6200 mos. base salary + prov..correct?) Second Q, why do most folks in NA take the 15 % as cash. Somebody said their was a disadvantage to having the "company" invest it for you..??? Is that how it works? I also heard that they can take it away from you at any time for no reason...WHAT?! Could someone please explain the two different 15 % options, and why I should do one over the other. Any other CX retirement thoughts also welcomed.
Question for a potentially NA based fr8ter guy. I heard that most guys take the 15 % as cash. Is that 15 % of $5400? So, an extra $800 a month (6200 mos. base salary + prov..correct?) Second Q, why do most folks in NA take the 15 % as cash. Somebody said their was a disadvantage to having the "company" invest it for you..??? Is that how it works? I also heard that they can take it away from you at any time for no reason...WHAT?! Could someone please explain the two different 15 % options, and why I should do one over the other. Any other CX retirement thoughts also welcomed.
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Just to clarify Ali's point, even if you take a base you'll still suffer from the "vesting theft". The option you have when you take a basing is to stop paying into the provident fund, but the funds you already have in there stay until you leave the company.
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Not totally true! While in HK you are part of VETA. Should you switch basing companies (ie. go to USAB) the portion already invested becomes fully invested! The reverse is also true.
New freighter DEFO on a LAX (USAB) base. Does his 3.5/4 years then decides to go to HKG (VETA). The 4 years of accumulated PF will be fully vested and further contributions will be 4/10th vested then 5/10th the following year etc. In year 7 he decides to move back to the US and takes a SFO (USAB) base. All 7 years will be vested and further contributions will be 7/10th then 8/10th etc until 10 years.
If you have a few years in then change basing companies 6 months before you quit!
New freighter DEFO on a LAX (USAB) base. Does his 3.5/4 years then decides to go to HKG (VETA). The 4 years of accumulated PF will be fully vested and further contributions will be 4/10th vested then 5/10th the following year etc. In year 7 he decides to move back to the US and takes a SFO (USAB) base. All 7 years will be vested and further contributions will be 7/10th then 8/10th etc until 10 years.
If you have a few years in then change basing companies 6 months before you quit!
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Unfortunately this loophole does't exist for European bases as you stay working for Veta whether you're in HK or Europe. The best option for Europe would probably be to take the money as cash then reinvest it in an approved pension if you're UK resident. You'll then get the tax back on the reinvested money as well as avoiding the potential theft of funds should you decide to leave.
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There is also the point that under the, "provident fund" rules, (and I use the quotes in a semi sarcastic manner...) the company has the right to sequest your entire provident fund.
It took ages to find this information, as at first the company refused me access to the provident funds documents. The bank that oversees it, Coutts, refused me access, and eventually after badgering I was allowed sight by the company, but not to copy, the source document. (I took great delight in writing it out in longhand for an hour whilst an admin assistant stood over me to ensure that I did not steal it... Nice authority gradient for a senior captain...)
The clause was introduced by a personnel manager about fifteen years ago. If I add the word Greek here all CX staff at that time will know the perp. The provident fund managers objected to the clause, as it was way outside of industry norms, even for Hong Kong, but as Coutts wanted the business they wrote it into the contract as demanded.
The phrase is that the fund may be sequested from the pilot for "disobedience". A more communist (or indeed fascist) wording I could not imagine. It would behoove you to do as you are told in CX. As I mentioned at the time to the then Chief Pilot, if you tell me to land on a wet short runway with a tail wind and I refuse, I lose my provident fund. I shall not add his comment here as it is not worth promulgating.
To be fair to CX, this phrase was not invoked over the 49'rs, and though they had massive administrative obstruction most of them got the funds out. That suggests that it is held in reserve as a surprise for anyone that they want to screw badly as they terminate them.
Also to be again fair, I would estimate that most of the pilot managers are not aware of this clause, as they are under the same provident fund and have the same difficulty accessing the source document.
Back to the thread.
Most guys take the money and invest themselves. The Fidelity system has appalling execution (17 days at best), has interest rates on cash at least 2% below market, and their bonds portfolio lags the market. Some of their funds are ok and lead the market but you have to be lucky.
The reason Fidelity was chosen by CX to handle this massive portfolio is shrouded in the mists of the past. Various other banks in Hong Kong are still wondering how they missed out with their apparently better quotation offers.
Under Hong Kong law Fidelity are not allowed to give investment advice, so even if you are a senior captain with millions of HK$ invested they treat you as a nobody. A junior staff at CX will "advise" you, but you can get her into MEGO state in the first minute if you have read the Wall Street Journal twice in your life.
From this you will see that my advice is to take the money as cash and invest yourself. But do invest, and although a 1967 Corvette might look like an investment remember, "it has to be part of a balanced portfolio"
It took ages to find this information, as at first the company refused me access to the provident funds documents. The bank that oversees it, Coutts, refused me access, and eventually after badgering I was allowed sight by the company, but not to copy, the source document. (I took great delight in writing it out in longhand for an hour whilst an admin assistant stood over me to ensure that I did not steal it... Nice authority gradient for a senior captain...)
The clause was introduced by a personnel manager about fifteen years ago. If I add the word Greek here all CX staff at that time will know the perp. The provident fund managers objected to the clause, as it was way outside of industry norms, even for Hong Kong, but as Coutts wanted the business they wrote it into the contract as demanded.
The phrase is that the fund may be sequested from the pilot for "disobedience". A more communist (or indeed fascist) wording I could not imagine. It would behoove you to do as you are told in CX. As I mentioned at the time to the then Chief Pilot, if you tell me to land on a wet short runway with a tail wind and I refuse, I lose my provident fund. I shall not add his comment here as it is not worth promulgating.
To be fair to CX, this phrase was not invoked over the 49'rs, and though they had massive administrative obstruction most of them got the funds out. That suggests that it is held in reserve as a surprise for anyone that they want to screw badly as they terminate them.
Also to be again fair, I would estimate that most of the pilot managers are not aware of this clause, as they are under the same provident fund and have the same difficulty accessing the source document.
Back to the thread.
Most guys take the money and invest themselves. The Fidelity system has appalling execution (17 days at best), has interest rates on cash at least 2% below market, and their bonds portfolio lags the market. Some of their funds are ok and lead the market but you have to be lucky.
The reason Fidelity was chosen by CX to handle this massive portfolio is shrouded in the mists of the past. Various other banks in Hong Kong are still wondering how they missed out with their apparently better quotation offers.
Under Hong Kong law Fidelity are not allowed to give investment advice, so even if you are a senior captain with millions of HK$ invested they treat you as a nobody. A junior staff at CX will "advise" you, but you can get her into MEGO state in the first minute if you have read the Wall Street Journal twice in your life.
From this you will see that my advice is to take the money as cash and invest yourself. But do invest, and although a 1967 Corvette might look like an investment remember, "it has to be part of a balanced portfolio"
