Cabin crew pension and retirement savings by airline group: the Gulf gratuity, the US 401k, European schemes, Australian super and what crew have at 55
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#1 Qantas international, fifteen years, the old guy in the thread, and nobody under thirty asks about the pension, which is why I am writing it. The retirement savings at the airlines differ enormously by group and the crew who understand it at 25 are the ones who are fine at 55. Here it is, by group, from the crew on this forum and from my own superannuation statements.
The Gulf: the end of service gratuity
No pension. The end of service gratuity is the legal payment at the end of the contract: a number of days of basic salary per year of service, rising after the first years, paid as a lump sum when you leave. For a crew member who leaves after five years it is a few months of basic; after ten it is more. It is not a pension and the Gulf crew who save nothing else arrive home at 35 with the gratuity and no retirement savings, which is the trap. The ones who are fine are the ones who sent a fixed share home into a pension or an investment every month, as the money threads on the Gulf boards say. The tax free salary is the retirement savings if you make it so and nothing if you do not.
The US: the 401k and the pension
The US majors offer a 401k with a company match (the contracts set the percentage) and some have the legacy defined benefit pensions for the senior crew or a company contribution in place of them. The match is free money and the new hires who do not contribute enough to get the full match are leaving pay on the table. Sam's and Matthew's threads on the US boards have the contract details. The US crew who stay thirty years with the match and the market behind them retire comfortably; the ones who cashed out the 401k at every job change do not.
The European occupational schemes
The legacy carriers have occupational pension schemes under the agreements (the Lufthansa, Air France, BA, KLM, SAS and TAP schemes differ in generosity and the recent reforms have moved most from defined benefit to defined contribution for the new joiners), funded by the airline and the crew member, on top of the state pension. The low cost carriers offer the statutory minimum or a modest contribution. The European crew who stay to retirement at a legacy carrier have the occupational pension plus the state pension and are the best provided for in the industry; the ones at the low cost carriers have the state pension and whatever they saved.
Australia: superannuation
The compulsory employer contribution into the crew member's super fund, at the statutory rate, on top of the salary, from day one, which the Australian crew take for granted and the rest of the world envies. Fifteen years of it is a serious number and the Qantas crew who retire have it. The Gulf crew who move home to Australia at 35 start their super at 35, which is the honest cost of the Gulf years.
What the crew who left at 30 had
The Gulf ones: the gratuity and whatever they sent home. The US ones: the 401k balance if they kept it. The European ones: a few years in the occupational scheme, which stays and grows. The ones who left at 30 with nothing are the ones who did not know this thread's contents at 25.
What the ones who stayed to 55 have
The legacy European and Australian crew: the occupational or super plus the state pension, and a comfortable retirement. The US crew with the match and the years: the 401k and the pension where it exists, and the same. The Gulf crew who stayed to 55: rare, because the Gulf is not built for it, and the ones who did have the gratuity at its highest and whatever they built, and the honest ones say they should have gone home at 40 to a scheme.
For the ones under thirty
At the Gulf: a fixed share home into a pension every month, no exceptions. In the US: the full match from day one. In Europe: stay long enough at a legacy carrier for the scheme to matter, or save at the low cost one. In Australia: the super is doing it, add to it. The job is wonderful and it is not a pension, except where the agreement makes it one.
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#2 Qantas, eight years, and the super from day one being the thing the Australian crew take for granted and the Gulf returnees starting at 35 is the honest cost of the Gulf years, as Steve says, and Sienna's thread on the Gulf to home move has the same point. The old guy is right. Read it at 25.
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#3 American, 14 years, and the full match from day one is the US flight attendant's second best financial advice after the per diem one, and the crew who cashed out the 401k at job changes are the ones I worry about. The legacy pension for the senior crew is real at American and the new hires have the contribution. Steve has the US right.
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#4 SAS, twelve years, and the European occupational scheme being the thing that makes the legacy carrier a retirement and not just a job is the Scandinavian view exactly. The recent reforms moved the new joiners to defined contribution, as Steve says, and it is still far better than the low cost minimum. Pin this.
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#5 Ex Emirates, seven years, now corporate jet crew, and the gratuity after seven years was a few months of basic and the pension I built was the share I sent home monthly, which the money threads told me to do at 24. The Gulf trap is real and Steve has named it without drama. The ones who send nothing home have nothing.
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#6 Six years EK, now trainer in Brisbane, and I came home at 30 with the gratuity and the savings I sent home and started my super at 30, which is late and fine, and would have been a disaster at 40. Steve's 'should have gone home at 40 to a scheme' is the sentence the Gulf crew in their late thirties should read.
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#7 KLM, ten years, and the KLM pension scheme is the reason half the crew room is over fifty, alongside the part time models (Felix's Lufthansa thread). The agreement makes it a pension, exactly. The under thirties should read Steve's thread once a year.
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#8 United, month nine, reserve, crash pad, and I had not set the 401k contribution to the full match because the crash pad rent and the reserve pay made it feel impossible, and this thread has made me do it this week. The free money on the table. Thank you Steve from a 26 year old.
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#9 @benjireserve setting the match this week at 26 is the single best financial decision of your career and you have just made it on a forum thread, which is the best outcome this thread could have. @willdxb the share sent home monthly at 24 is the Gulf pension and you built it.