Chances For Airline Pension Relief Dimming

[USA320Pilot]

Chances for Airline Pension Relief Dimming in Congress

Friday December 5, 3:30 pm ET
By John Godfrey, Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones) - It was looking less likely Friday that Congress will pass pension funding relief being sought by U.S. airlines before adjourning for the year, House aides said Friday.

Airlines have been asking for relief from accelerated pension funding contributions required of substantially underfunded pension plans. These accelerated pension payments are called deficit reduction contributions.

Airlines had hoped to tie DRC relief to broader legislation replacing the 30- year Treasury bond in pension calculations. But opposition from key senators, coupled with the dwindling time in which to work out a compromise make chances for passing the DRC proposal dimmer.

Moving a compromise version of the bill would require the House to act first, and the pension bill isn't on its schedule.

One key stumbling block is Sen. Pete Fitzgerald, R-Ill., who announced Friday he will object to any effort to bring to the Senate floor legislation providing the DRC relief being sought by the airlines.

"I take a very dim view of this," Fitzgerald said.

Fitzgerald said it is inappropriate to give pension funding relief to weak businesses with already-underfunded pension plans.

Fitzgerald said it would be akin to the "debacle" of giving regulatory relief to the savings and loan industry in the 1980s.

 

[USA320Pilot]

I find it interesting that Senator Pete Fitzgerald from Illinois is going to prevent a legislative solution to the underfunded pensions considering this could cause a major problem for his states home town airline -- United. This obviously has implications for US Airways' pilots and possibly the other labor groups, but it could have another indirect effect on our company.

Today the Chicago Tribune reported that the biggest issue for US Airways’ business partner United Airlines, as it is for much of corporate America, is its inability to erase a funding deficit in its employee pension plans. Current rules require the company to come up with $4.8 billion over five years, most of it over the next three years.

The airline has asked the Internal Revenue Service for a waiver to spread out about $2.4 billion of the early payments over the entire five years. Northwest Airlines received a similar waiver last year.

United officials and unions, along with other airlines, are lobbying Congress heavily for measures that would change the interest rate calculation for the pension obligations. Like many companies, United also wants federal legislation that would enable it to pay the obligation over a longer period.

US Airways ran into a similar problem just as it was exiting bankruptcy this year, and the carrier wound up replacing its pilots' pension plan with a less expensive version.

Most experts agree that United workers would not accept such a move.

Any plan terminations "could be a critical blow to the momentum they seem to be showing," said William Swelbar, president of Eclat Consulting in Arlington, Va., which specializes in airline industry analysis. His firm has consulted with United's flight attendants.

"United seems to be making progress, but this elephant in the room is a big one," he said.

Chip comments: If the Chicago Tribune's comments of "US Airways ran into a similar problem just as it was exiting bankruptcy this year, and the carrier wound up replacing its pilots' pension plan with a less expensive version. Most experts agree that United workers would not accept such a move, come true, then what could happen to the Chicago-based airline and how will this effect any potential corporate transaction and the Pittsburgh hub negotiations? In my opinion, without pension relief, United will be forced to terminate at least the pilot's pension plan, which will likely occur -- but if not....

Regards,

Chip

 

[PITbull]

Chip,

I earnestly believe management had every intention of terminating our Pilot's pension plan. They waited to the last minute to do so, after they ran you dry. Heck, you even had to convince them to step up to the plate and help U's pilots with this legislation, which they knew would have a very difficult time passing.

 

[USA320Pilot]

U.S. House snubs Senate-proposed pension relief

Senate aides were not optimistic that either of the House-passed pension relief bills could move through their chamber when it returns to work on Tuesday

WASHINGTON (Reuters) - Chances for billions of dollars in proposed pension relief for troubled U.S. airlines and other companies this year dimmed on Monday as the House of Representatives headed home for the holidays without acting on a deal proposed by the Senate.

See Story

Regards,

Chip

 

[a320av8r]

Merry DELETED Christmas!

Love,
George II and
The Republican Party

(Sorry, but I need another $87,600,000,000.00 for Iraq and another $20,000,000,000.00 grant for big oil.) :angry:

 

[OldpropGuy]

Isn't it obvious? No one else cares about what they perceive to be overpaid pilots losing their fat pensions!

Welcome back to the real world of the majority of the working people.

Airline Pilot is not the proud profession it once was. Thanks to those allowing the outsourcing of our flying to Mesa and other substandard contract carriers, whose pilots who will fly for nothing, it will continue to deteriorate. :down: