United's pilot retirement stack looks straightforward at the headline level: a non-elective 401(k) contribution stepping up to 18% by 2026, a cash balance spillover, a profit-sharing formula with tiered percentages. The detail that actually matters for planning purposes lives further down — a profit-sharing threshold that can zero out a marginal year entirely, and a disability plan with its own specific benefit structure.
The headline percentage is the easy part. The threshold underneath it is the part worth understanding.
The figures below are drawn directly from the 2023 United Pilot Agreement, United's SEC filings, the plan's official Summary Plan Description, and Charles Schwab's PRAP plan guide — primary sources rather than secondary summaries. One detail remains genuinely unconfirmed: who funds the LTD premium itself. That specific point is flagged where it comes up.
PRAP: The Pilot Retirement Account Plan
Tier 1
Pilot Retirement Account Plan (PRAP)
United's traditional pilot pension was terminated during its mid-2000s bankruptcy, replaced by the PRAP — a defined contribution plan. Under the 2023 United Pilot Agreement, the non-elective company contribution stepped from 16% to 17% in 2024–2025, and to 18% in 2026, capped at the IRS §401(a)(17) compensation limit. PRAP contributions vest immediately at 100%, with no vesting schedule to track.
This is a non-elective contribution — paid regardless of the pilot's own deferral rate — not a matching formula.
Tier 2
Market Based Cash Balance Plan and the RHA
Once PRAP additions for the year reach the IRS §415(c) annual-additions limit, further company contributions spill into either United's Market Based Cash Balance Plan (MBCBP) or a Retiree Health Account (RHA) — a funded, qualified structure in both cases, not an unfunded deferred-comp arrangement.
The two destinations carry meaningfully different estate treatment. The RHA is funded through a VEBA trust and reserved strictly for qualified healthcare expenses; under the United Pilot Agreement (§24-G-6-c), once a pilot and all eligible surviving dependents (generally covered to age 26) have died or lost eligibility, any remaining RHA balance is forfeited and reallocated among the other pilots' RHA accounts in the trust — it does not pass to an estate. The MBCBP, by contrast, is distributed at death under the plan's cash-balance provisions, consistent with an inheritable qualified account. A pilot prioritizing family wealth transfer has a real reason to prefer MBCBP treatment over RHA treatment for spillover dollars, where the plan allows a choice.
Tier 3
Profit Sharing — An On/Off Switch, Not a Dial
Effective January 1, 2024, United's profit-sharing plan — the United Airlines Holdings, Inc. Profit Sharing Plan, filed as an exhibit to United's Form 10-K — pays out only if annual pre-tax profit clears a $10 million threshold. Below that line, the payout is zero — not a smaller percentage, nothing.
Above the threshold, the plan document sets a base percentage of pre-tax profit — 1% up to $2.5 billion, 20% above that — multiplied by a pilot-specific factor of 10 and 20 respectively, netting out to an effective rate functionally similar to a straight 10%/20% split. The exact dollar payout also depends on total company-wide eligible wages for the year, so it isn't a perfectly clean percentage the way a simpler formula would be — a 2024 payout was reported around 7.6% of eligible pay.
The $10 million floor is the feature worth understanding regardless of the formula's precision. A formula that pays from the first dollar of profit means a weak year still produces something, however small. United's threshold design means a company that narrowly misses it produces the same planning result as a loss year: nothing. Budget it as contingent income, not a baseline.
Confirmed: The Mega-Backdoor Roth Pathway
Per Charles Schwab's official PRAP plan guide, the plan supports voluntary post-tax contributions from 1% to 100% of eligible pay, which begin automatically the payroll cycle after a pilot maxes out pre-tax and Roth 401(k) elective deferrals for the year — absorbing the remaining room up to the §415(c) annual-additions ceiling.
Converting those post-tax dollars to Roth is not automatic by default, however. A pilot has to set up a standing election with the plan's recordkeeper to have new post-tax contributions rolled over to Roth as they're made; without it, converted balances require periodic manual action. Setting up that standing election once, rather than relying on memory to convert periodically, is the practical way to execute this strategy cleanly.
IRS Limits — Where the Threshold Design Actually Matters
| Contribution Type | 2026 Limit |
|---|---|
| Employee elective deferral — IRC §402(g) | $24,500 |
| Age 50+ catch-up | $8,000 |
| Ages 60–63 catch-up — SECURE 2.0 | $11,250 |
| All-sources limit — IRC §415(c), excluding catch-up | $72,000 |
| Qualifying compensation cap — IRC §401(a)(17) | $360,000 |
| Source: IRS Notice 2025-67. Limits are subject to annual COLA adjustments. | |
Illustrative Math
$360,000 compensation cap × 18% non-elective PRAP contribution = $64,800 — leaving roughly $7,200 of headroom under the $72,000 §415(c) ceiling.
In a year profit sharing pays out, that additional income adds toward closing the gap, however modest the payout. In a year United misses the $10 million profitability threshold, profit sharing contributes exactly nothing toward it — the pilot's only path to the MBCBP spillover in that scenario runs through PRAP contributions and elective deferrals alone.
Coordinating With the Rest of the Household
The PRAP, MBCBP/RHA, and threshold-dependent profit sharing form the core of the stack. A complete picture for a United pilot household typically also includes:
- A traditional or Roth IRA, subject to the §408 limit ($7,000 for 2026, $8,000 with catch-up), with deductibility of a traditional contribution depending on active-participant status and household modified adjusted gross income.
- A spousal IRA, including a backdoor Roth IRA where household income exceeds the direct-contribution limit and the spouse holds no pre-tax IRA balance subject to the pro-rata rule.
- A Health Savings Account, if the household is enrolled in a qualifying high-deductible health plan.
- A taxable brokerage account, sized around a conservative profit-sharing assumption rather than the threshold-clearing year.
- The spouse's employer retirement plan, often under-utilized in pilot households.
Given the RHA's forfeiture provision, a pilot with a shorter expected retirement horizon, health concerns, or no dependents to cover healthcare costs for may want to weigh MBCBP treatment against RHA treatment differently than a younger, healthier colleague with a family would — this is a genuine case where the "same" spillover choice carries different planning weight for two pilots at the same seniority.
Income Protection: ALPA's National LTD Plan
United pilots have access to an ALPA-administered National Long-Term Disability plan with an own-occupation definition tied to loss of FAA medical certification. Per the United Pilot Agreement (§24-H), the maximum monthly benefit is $13,521.40 for disabilities on or after September 29, 2023, with a 60-day elimination period. The contract also directs a company contribution into the pilot's MBCBP while on LTD — equal to twice the current PRAP non-elective percentage, or 34% at the 2024–2025 rate of 17%, rising to 36% once the PRAP contribution reaches 18% in 2026 — so retirement contributions continue even while a pilot is grounded.
What the contract text doesn't specify is who funds the LTD premium itself — whether it's pilot-paid, company-paid, or split. That detail changes the after-tax value of the benefit and whether it should be modeled as a household expense. Confirm directly with ALPA before building it into a plan.
The Next Contract Cycle
The 2023 United Pilot Agreement becomes amendable September 30, 2027. As of mid-2026, the Master Executive Council has reportedly begun polling pilots ahead of that cycle, but no Section 6 opener has been filed and no interim amendments have surfaced.
Pilots reading this closer to 2027 should confirm whether the PRAP percentage, profit-sharing threshold, or LTD terms have shifted heading into the next agreement.
How This Sits in the Decision Sequence
Near-identical headline numbers don't change the order of the underlying decisions.
ILS Decision Sequencing System™
- Establish the income floor using base pay and a conservative, threshold-aware profit-sharing estimate.
- Map the PRAP contribution, MBCBP/RHA spillover, and profit-sharing threshold against IRS limits and household capacity.
- Pressure-test irreversible or hard-to-reverse elections — Roth vs. traditional deferral allocation, MBCBP/RHA spillover treatment, beneficiary forms.
- Sequence tax buckets across the PRAP, MBCBP, IRAs, HSA, and taxable accounts.
- Confirm income protection — LTD funding source and replacement ratio — is calibrated to the income floor.
- Only then revisit allocation across all accounts.
References
- Air Line Pilots Association, United Master Executive Council. (2023). United Pilot Agreement 2023 (UPA 2023), full contract text. alpa.org
- United Airlines Holdings, Inc. (2024). Profit Sharing Plan, Amended and Restated January 1, 2024 — Exhibit 10.2 to Form 10-K. U.S. Securities and Exchange Commission, sec.gov
- United Airlines Pilots' Retiree Health Account (RHA) Summary Plan Description. (2024). Retirement plan administration services.
- Charles Schwab. (n.d.). United Airlines Pilot Retirement Account Plan (PRAP) guide. content.schwab.com
- Internal Revenue Service. (2025). Notice 2025-67: 2026 limitations adjusted as provided in section 415(d), etc. irs.gov
FAQ: The United Airlines Pilot Benefits Stack
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What is the PRAP at United Airlines?
PRAP stands for Pilot Retirement Account Plan — United's defined contribution vehicle that replaced its traditional pilot pension, terminated during the airline's mid-2000s bankruptcy. Under the 2023 United Pilot Agreement, the company's non-elective PRAP contribution stepped from 16% to 17% in 2024–2025 and to 18% in 2026, capped at the IRS compensation limit. Contributions vest immediately at 100%.
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Does United have a company match on the 401(k)?
No. The PRAP contribution is non-elective, meaning it is paid as a percentage of eligible pay regardless of what the pilot personally contributes. Because there is no matching formula, the true-up question that matters for a matching plan doesn't apply the same way here.
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Why doesn't United pilot profit sharing pay every year?
Effective January 1, 2024, United's profit-sharing plan — the United Airlines Holdings, Inc. Profit Sharing Plan, per its SEC-filed plan document — pays nothing at all unless annual pre-tax profit exceeds a $10 million threshold. Above that floor, the plan applies a base percentage of pre-tax profit (1% up to $2.5 billion, 20% above that) multiplied by a pilot-specific factor set at 10 and 20 respectively — netting out to an effective rate functionally similar to a straight 10%/20% split, though the exact dollar payout also depends on total company-wide eligible wages that year. This on/off threshold, rather than a formula that pays from the first dollar of profit, is a distinguishing feature worth budgeting around: a marginal year can produce nothing at all.
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What is the Market Based Cash Balance Plan (MBCBP) at United?
United's MBCBP, introduced under the 2023 agreement, absorbs company contributions once a pilot's PRAP additions hit the IRS §415(c) annual-additions limit for the year — a funded, qualified vehicle, not an unfunded deferred-comp plan. A parallel destination, the Retiree Health Account (RHA), is funded through a VEBA trust and reserved strictly for qualified healthcare expenses. Per the United Pilot Agreement (§24-G-6-c) and the plan's official Summary Plan Description, once a pilot and all eligible surviving dependents (generally to age 26) have died or lost eligibility, any remaining RHA balance is forfeited and reallocated among the other RHA accounts in the VEBA trust — it does not pass to the pilot's estate. The MBCBP, by contrast, is distributed at death under the plan's cash-balance provisions, consistent with an inheritable qualified account.
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Does United offer a deferred compensation (NQDC) plan?
No confirmed non-qualified deferred compensation plan for United pilots was found as of mid-2026. United's overflow mechanism for pilots who exceed IRS qualified-plan limits is the MBCBP, which is a funded, qualified vehicle rather than a voluntary employee deferral of flight pay or profit sharing.
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What is ALPA's National LTD plan for United pilots?
United pilots have access to an ALPA-administered National Long-Term Disability plan with an own-occupation definition tied to loss of FAA medical certification. Per the United Pilot Agreement (§24-H), the maximum monthly benefit is $13,521.40 for disabilities on or after September 29, 2023, with a 60-day elimination period. The contract also directs a company contribution into the pilot's MBCBP while on LTD, equal to twice the current PRAP non-elective percentage — 34% at the 2024–2025 rate of 17%, rising to 36% once the PRAP contribution reaches 18% in 2026 — so retirement contributions continue even while a pilot is out on disability. Confirm current premium and funding responsibility directly with ALPA, since public sources did not consistently specify who pays for the LTD premium itself.
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Can United pilots do a mega-backdoor Roth?
Yes, with one nuance. Per Charles Schwab's official PRAP plan guide, pilots can contribute 1% to 100% of eligible pay on a post-tax basis, and these contributions begin automatically the payroll cycle after a pilot maxes out pre-tax and Roth 401(k) elective deferrals for the year. Converting those post-tax dollars to Roth, however, is not automatic by default — a pilot must set up a standing election with the plan's recordkeeper to have new post-tax contributions rolled over to Roth as they're made. Without that election, converted balances require periodic manual action instead.
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When can ALPA and United renegotiate the contract?
The 2023 United Pilot Agreement becomes amendable September 30, 2027. As of mid-2026, the United ALPA Master Executive Council has reportedly begun polling pilots ahead of the 2027 bargaining cycle, but no Section 6 opener has been filed and no interim amendments have surfaced.
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Where does the United benefits stack fit in overall financial planning?
Mapping the PRAP non-elective contribution, the MBCBP/RHA spillover, and a threshold-dependent profit-sharing range against IRS limits and household capacity is the second step in the ILS Decision Sequencing System — after the income floor is established and before allocation or coverage decisions are optimized.