- Medical & Dental. Most airlines offer excellent medical and dental protection for the pilot and the pilot's family. The medical and dental plans are paid for by the company and will cover 80 to 100 percent of the costs, with most providing a maximum out-of-pocket expense for the pilot of anywhere from $500 to $1,000 each year. This eliminates the risk of catastrophic losses due to illness or injury.
- Retirement. All major airlines and many lesser ones offer retirement programs, with the bigger companies offering both a company retirement plan and a voluntary plan, usually a 401(k) with various fund programs in which you can invest your money. For company retirement plans, see the sidebar, "Don't Wait for the Gold Watch," page 40.
A 401(k) program, which most airlines offer, is a tax-deferred retirement plan in which the employee contributes to a fund. In a 401(k), you contribute a percentage of your salary to the fund; your employer is not required to, but generally will either match your contribution or put up a percentage for each dollar you contribute to your account. The maximum contribution is determined by Internal Revenue Service (IRS) regulations.
The employee has various investment options when participating in a 401(k) plan. Among these are keeping the funds in a savings account and making investments, which may include both conservative and high-risk investment vehicles. The interest earned and payoffs are determined by the type of investment an individual makes. The vestment period is determined by the plan the company agrees to: A fund can be fully vested immediately or after as many as seven years. If you choose to leave the company before the fund is vested, you are entitled to withdraw all the money you have contributed to the fund, but no more, and the employer's contribution, if any, goes back to the company. If you withdraw the money after the vestment date, all of the money belongs to you. Your contributions are not taxed until your retirement, or until you withdraw the money prior to retirement.
- Profit Sharing. Profit-sharing options vary from airline to airline and are not available at some of them. However, profit-sharing plans at such major carriers as American, Continental, Federal Express and TWA are potentially a significant bonus to a pilot's income, depending on the airline's profit picture. Federal Express is an example of an airline that has been successful in using profit sharing, employee ownership in the company, and other motivational tools to improve the company's bottom line and to create a work force enthusiasm that comes back to employees in the form of larger profit-sharing bonuses. (In some cases, profit-sharing plans can backfire on an airline, e.g., at People Express.)
- Travel. All major carriers offer free and reduced-rate travel for their pilots. In many cases there will be a waiting period before you are allowed to use passes. You will find that the passes are very liberal and will be more than enough to satisfy your desire to travel. You will receive passes on other carriers as well as your own airline. The amount you pay for a pass on another airline will vary, but 90 percent, 75 percent and 50 percent discounts are available. When traveling on a 90 percent or 75 percent pass, you must travel on a standby basis. These rates are available for you and eligible family members. All major airlines except Delta have jump seat privileges for pilots providing no-cost travel on a space-available basis. Some companies require you to be in uniform to ride the jump seat.
- Loss-of-License Insurance. Many major carriers provide loss-of-license insurance for their pilots in case they ever fail to pass their Class I medical. The benefits range from $1,000 per month for 46 months to half-pay for the rest of the pilot's life. Many pilots purchase, on their own, supplemental loss-of-license insurance that will provide up to $150,000 tax-free in a lump sum or in monthly payments should medical problems prematurely end their flying careers.