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UPA 2023: What Does It Mean For You and Your Retirement?

by , | Updated: Jan 22, 2024 | Published: Jan 3, 2024 | Insights

UPA 2023

UPA 2023: What Does It Mean For You and Your Retirement?

An Overview Of The Important Changes To Your United Benefits 


As we enter the new year, United Airlines pilots may wonder about the impact of the new UPA 2023 contract on their retirement plans with the newly adjusted contribution limits. The R&G Wealth Team has diligently monitored the contract’s progress, providing insights into its various aspects.

Important Changes

While this article refrains from commenting on certain contract elements, such as work rules, or evaluating the contract’s overall value, it does shed light on significant financial changes affecting pilots. The focus here is on detailing the financial planning implications of the contract, including how pilots can leverage them in conjunction with the 2024 IRS contribution PRAP limits. We will cover these topics below.

Section 22 – Retirement

The most substantial changes in the contract relate to retirement and carry significant financial planning implications:

Non-Elective Contributions (NECs)

NECs are set to increase to 17% in 2024 and 18% in 2026, accelerating 401(k) accumulation. This will allow company contributions to accumulate more quickly in 401(k)s and potentially reduce the need for additional pilot deferrals. A thorough planning is necessary to induce or prevent a “spillover” event once IRS contribution limits are exceeded depending on each pilot’s unique situation.

Profit Sharing Contributions

Similar to NECs, profit sharing contributions can expedite 401(k) accumulation, leading to earlier “spillover” events in the calendar year.

In-Service Distributions

In-service distributions are available from age 59 ½, offering flexibility for personal and United in-service distributions.

Market-Based Cash Balance Plan (MBCBP)

A new pension option, providing pilots with an additional pension option without carrying the risk of underfunded pension liabilities. While implementation details are pending final approval, the plan is anticipated to commence in 2025. It is expected that it will look similar to the MBCBP implemented by Delta and American.

HRA/RHA Funding Options

Pilots can choose to fund HRA/RHA separately or in combination with MBCBP, offering flexibility in managing spillover funds.

Section 24 – Insurance

Following retirement, changes to insurance are paramount in financial planning:

HRA/RHA Spillover

Capped at $10,000 until MBCBP implementation for those exceeding the 401a17 limit ($345,000 maximum compensation limit in 2024). Excess funds will be paid out in cash, subject to taxes and union dues until the MBCBP plan is established.

Long-Term Disability (LTD)

Increased maximum benefit to $13,521.40 from $11,000 and subject to pay scale increases for a greater benefit rather than being capped to a maximum amount.  This also reduced the elimination period to 60 days and has extended the sick bank to help bridge the gap and cover the reduced waiting period. Finally, with the inception of the MBCBP, pilots on LTD will now have company NECs contributed to this plan to the tune of 34% of the maximum benefit amount.

Company-Paid Life Insurance

Improved benefits with a new formula modifier doubling, along with the increase in pay scales, significantly enhancing a pilot’s life insurance coverage.

Section 3 – Compensation

A notable increase in pay scales, profit-sharing formula improvements, retirement contributions, and Ratification Bonus payments contribute to a substantial rise in annual income. However, pilots may face higher tax brackets, necessitating careful tax planning. In light of the upcoming SECURE Act 2.0, which will impose challenges for high-income earners to allocate additional pre-tax funds into qualified accounts by mandating that catch-up contributions in 2026 must be directed towards Roth accounts exclusively, it becomes crucial to explore strategies for consistently lowering your annual tax obligations.

Section 7 – Furlough

The minimum furlough notice extended from 30 to 90 days, providing pilots with more time for contingency planning in case of industry or company hardship.

Section 11 – Vacation

Changes in vacation policies now allow non-elective contributions to pilot 401(k)s whether vacation is used or forfeited, relieving pressure on pilots to use all vacation days for fear of missing out on the company’s contributions into their retirement plan on forfeited vacation days.

Section 12 – Leaves of Absence

The addition of eight weeks of paid maternity and fourteen days of parental leave enhances financial flexibility for pilots planning or expanding their families.


In conclusion, the UPA 2023 agreement brings substantial improvements in pay, work-life quality, work rules, sick leave, vacation, and retirement benefits for United’s pilots. The R&G Wealth Team is ready to guide pilots through these considerations and more.

Need Some Help?

If you’d like some help from one of our CPAs or CERTIFIED FINANCIAL PLANNER (CFP®) advisors, the Rhame & Gorrell Wealth Management team is here to help.

Our experienced Wealth Managers can help you review your financial and tax situation and come up with a custom tax optimization strategy going forward – all at no cost to you!

Feel free to contact us at (832) 789-1100, [email protected], or click the button below to schedule your complimentary in-person or virtual strategy session today.


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Wealth Manager

Cydney takes great pride in her work with high-net-worth individuals and families, helping them navigate the constantly evolving legal and financial landscape. She excels at analyzing intricate client situations and developing investment strategies that align with their goals, always prioritizing her clients’ needs.

With 8 years of industry experience, Cydney came to our firm from another Independent Registered Investment Advisor (RIA) where she also played a key role in their Investment Committee, managing dynamic portfolios and asset allocations. She started her career in the Oil and Gas sector as a cost controller for a multinational corporation while pursuing her Bachelor’s Honors Degree in Accounting and Finance. Her dedication and hard work paid off as she graduated with First Class Honors from the University of Bradford, receiving an Outstanding Academic Achievement Award from her European College. Cydney also brings her international experience, gained while working abroad with a Big 4 Accounting Firm, which has expanded her perspective and enables her to assist clients in navigating the complexities, challenges, and opportunities in their financial lives.

Cydney is a registered state Investment Advisor Representative and holds a Series 65 license. She has successfully completed Level 1 of the Chartered Financial Analyst (CFA) designation.


Managing Director & Senior Wealth Manager

Jeff Rhame is one of the founders and President of Rhame & Gorrell Wealth Management. Jeff’s vision for starting Rhame & Gorrell was to deliver wealth management services and investment strategies typically available at the highest levels of wealth. Today, clients benefit from these sophisticated financial services, targeted to meet their unique needs.

Jeff leads a team of investment specialists that develop asset allocation strategies for high-net worth families. They seek out the most appropriate investment ingredients and then construct portfolios to meet our clients’ goals from income generation and capital preservation to tax-efficiency and growth.

Jeff has been honored with Top Professional’s Five Star Wealth Managers, recognized by The Wall Street Journal and Texas Monthly, for the last 10 years in a row and twice as Best of The Woodlands – Top Financial Advisors and Planners by Woodlands Online. For over 15 years, Jeff served as an adjunct professor for the University of Houston and Lone Star College Systems, teaching classes on Investment Management and Estate & Insurance Planning. As a member of the Financial Planning Association, he has also taught, and continues to teach, on & off-site retirement workshops for the employees of many Fortune 500 companies, such as ExxonMobil, Chevron.

Jeff is proudly serving as a member of three organizations: Memorial Hermann Hospital’s Advisory Board in The Woodlands, The Nelson Rusche College of Business Executive Advisory Board at Stephen F. Austin State University, and as the Vice-Chairman of the Tall Timbers District of The Boy Scouts of America.

Jeff received a degree in Accounting from Stephen F. Austin State University, and through post graduate work at The University of Houston, achieved his status as a CERTIFIED FINANCIAL PLANNER™ practitioner.



Rhame & Gorrell Wealth Management is not affiliated with or endorsed by United Airlines

Rhame & Gorrell Wealth Management, LLC (“RGWM”) is an SEC registered investment adviser with its principal place of business in the State of Texas. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that RGWM has attained a certain level of skill, training, or ability.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own CPA or tax professional before engaging in any transaction.  The effectiveness of any of the strategies described will depend on your individual situation and should not be construed as personalized investment advice.

For additional information about RGWM, including fees and services, send for our Firm Disclosure Brochures as set forth on Form ADV Part 2A and Part 3 by contacting the Firm directly. You can also access our Firm Brochures at www.adviserinfo.sec.gov. Please read the disclosure brochures carefully before you invest or send money.

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