Management and AFA Making Progress on Disputes Related to the Quarterly Productivity Premium (QPP)
Alaska Airlines management and AFA have been in discussions regarding several disputes associated with the Quarterly Productivity Premium (QPP) (see also the June 12th “Where is the Printed Contract?” and/or the “Quarterly Productivity Premium (QPP) Update – April 24, 2015” for more background). After months of back and forth, the parties are now making swift progress towards resolving those disputes.
One aspect of the QPP dispute is in relation to 401(k) contributions
One aspect of the QPP dispute is in relation to 401(k) contributions. At one point management held the position that QPP was not eligible earning for 401(k). We are pleased to report that going forward management has agreed all QPP payouts will be considered eligible earnings for 401(k).
Today’s paycheck contains a make-whole contribution to 401(k) based on Q1 QPP
AFA received “notice” only this morning that the June 19th (today’s) paycheck contains an additional make-whole contribution to 401(k) for those who received the QPP from the first quarter (Q1) (paid on May 5th). That means any Flight Attendant who achieved the Q1 QPP of $500 received an additional pre-tax contribution to 401(k) of $35 on top of your normal 401(k) contribution on today’s paycheck. (This is assuming you are contributing 7% of your earnings to 401(k), which you all should be doing with few exceptions!) You should have also received an additional $35 Company match on top of the normal Company match. In other words, your total 401(k) contribution will be proportionately higher on this check than usual. This is a really good thing—except for the lack of notice!
Roth 401(k) tax implications
For those of you who participate in the Roth 401(k) option, additional funds were withheld for taxes on your portion of the Roth 401(k) contribution at your personal tax rate. On an additional $35 contribution, that would translate to as much as $9 or so more than your usual withholdings based on the higher income tax brackets.
Normal 401(k) contributions on QPP earnings will be paid in Q2 going forward
Beginning with the second quarter QPP payout (Q2 = April, May, June) on August 5th, 401(k) contributions based on QPP earnings will be made normally.
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AFA would have passed this information along to you sooner had we been provided sufficient notice. We will continue to update you on any developments with the QPP disputes as we resolve them.
Your MEC – Jeffrey Peterson, Brian Palmer, Yvette Gesch, Becky Strachan, Laura Masserant, Cathy Gwynn, Sandra Morrow, Stephen Couckuyt; and MEC Grievance chairperson Jennifer Wise MacColl