Change of Control, the New American Airlines and the PBGC

[usa1]

This has been discussed in a number of threads in US Airways and American forums. Thought I would start its own.

http://afausairways....ne/dec27_11.htm

http://www.airlinefo...gc/page__st__24

http://www.airlinefo...ng/#entry955603

Based on the bit of info below, I think there will be a CoC. There will no longer be a US Airways, therefore no Piedmont or US Air.

According to information provided us after the AWA / US merger "this event" should allow those at retirement age, covered by the US Air PBGC agreement to start drawing their PBGC pention at 50-55 depending on which group you are in and keep working at the NEW COMPANY.

[background=rgb(245, 245, 255)]This update addresses the Change of Control (COC) provision of the US Airways East/LOA 93 contract –and specifically how it compares economically to the proposed MOU approved by the Board of Pilot Representatives.[/background]

[background=rgb(245, 245, 255)]The COC provision was designed to ensure that US Airways management deals with your union concerning major transactions such as the potential merger with American Airlines. While COC applies to some US Airways East Pilots, we were able to use it to negotiate an MOU with significant economic gains for all US Airways pilots. [/background]

[background=rgb(245, 245, 255)]Our cost estimates show that the economic values received by all US Airways pilots from the MOU exceed what only some would receive from a successfully executed grievance triggered by a Change of Control.[/background]

[background=rgb(245, 245, 255)]If the MOU is ratified and the merger is approved, all US Airways pilots will begin receiving the new MOU pay rates as of the date of the POR (estimated to be July 1, 2013) and an increase in [/background][background=transparent][background=transparent]pension[/background][/background][background=rgb(245, 245, 255)] contributions to 14%. In addition, all US Airways pilots will receive the new MOU pay rates retrospectively back to the date of ratification (February 8). On January 1, 2014, the pay rates increase by 8% and the pension contribution increases to 16%. All US Airways pilots will also share a $40 million lump sum payment. The MOU establishes all pilots as equal for compensation and working conditions at the POR, which will allow for the best outcome for seniority integration.[/background]
[background=rgb(245, 245, 255)]If the MOU is NOT ratified and the merger moves forward, USAPA would most probably file a grievance for the COC Scope provisions in our contract. If successful with the COC grievance, only some US Airways pilots would accrue snap back wages as of the date of the POR, since the COC provision does not apply to E-190 Pilots or West Pilots.[/background]

[background=rgb(245, 245, 255)]If this were to happen, and if USAPA is successful in pursuing a COC grievance, then the snap back wages would most likely continue until the new representative of the combined pilot group (probably APA) negotiates a Joint Collective Bargaining Agreement (JCBA). At that time all US Airways pilots would most likely be removed from the snap back wages and provided with the same wages of the APA pilots. Barring a significant change in the industry that would support continuing the COC, those wages would be the wages currently being provided to all US Airways pilots by ratifying the MOU.[/background]

[background=rgb(245, 245, 255)]According to USAPA’s Merger Counsel, arriving at a seniority integration process with disparity in wage rates may negatively impact the outcome for US Airways pilots.[/background]

[background=rgb(245, 245, 255)]MOU Timeline[/background]

[background=rgb(245, 245, 255)]The MOU indicates that the JCBA would be concluded 13-15 months after the POR date:[/background]

[background=rgb(245, 245, 255)]4 months for a single carrier petition to be filed with the NMB[/background]
[background=rgb(245, 245, 255)]6-8 months for the NMB to issue a decision,[/background]
[background=rgb(245, 245, 255)]30 days to negotiate the JCBA[/background]
[background=rgb(245, 245, 255)]60 days to resolve any disputes in arbitration.[/background]

 

[usa1]

Helpful Links

PBGC US Airways: http://www.pbgc.gov/...arge/usairways/
Create a personal PBGC online account: https://egov2.pbgc.g...ctplaninfo.aspx
PBGC Phone Number: 1-800-400-7242 Hours: 8 a.m. to 7 p.m. EST, Monday - Friday

We need to push this. After the US Airways, America West merger we were told because the US Airways name was the surviving id we could not start our PBGC retirement and continue working. They said the US Airways name had to cease.

Ex-Eastern employees were told they could work for the new US Airways and start theirs because they were not given any pension credit in the US Airways existing pension plan.

Reasons we should have the right to obtain our PBGC this time.
1-Our US Air PBGC plan is set.
2-The old American Airline pension was just frozen, obviously US Airways employees will receive no pension credits in it.
3-The US Airways name will be gone.
4-There will be a change of Control ... we will be working for a new company.


Here is how the attorneys explained it to AFA members after the AWA/US merger.

Q. Piedmont Airlines and PSA do not exist anymore, just like Eastern Airlines. Why can't I collect my Piedmont or PSA pension?

A. Eastern Airlines did not merge with another carrier and their pension was not integrated into another carrier's pension program. Both Piedmont and PSA pension programs were integrated into the US Airways Pension Program. Your time with Piedmont and PSA counted toward your US Airways Pension (Shuttle as well). The time a flight attendant spent with Eastern Airlines did not count toward any credit with a US Airways pension. Former Eastern Airlines flight attendants who were hired by US Airways started their seniority at zero years. Piedmont, PSA and Shuttle flight attendants kept their seniority and years of pension credits during the mergers.

 

[PullUp]

Some things to consider...
Early payout is less and once you start you can't change the benefit amount.
If the recipient dies, your spouse will receive 50% of your benefit until their passing (if you elect that option which reduces your payout)
Calculate total return based on your life expectancy and anticipated date of retirement. Sometime it is a better deal to start early with reduced payments, sometime it isn't.
If your PBGC payout will not be a primary source of income after retirement, taking early reduced payments may make sense.
Pilots may want to wait (if possible) to see if pending legislation or litigation will have any effect on payment amounts in the future.
Do your research, crunch the numbers, consult a professional, and do what's right for you.
Cheers.

 

[usa1]

Thanks ..... I fall into the "RETIREMENT PLAN FOR CERTAIN EMPLOYEES OF US AIRWAYS INC."
We get the same amount(s) if we start at 55 or 65. At our (ARD, actual retirement date) 55 we get one amount and then on our (FDC, first change date) it drops. The FDC matches the date you're eligible to start receiving Social Security.

No spouse in my case...

 

[usa1]

After a US/AA merger IM wondering how the new corporation will be structured? Will AMRQ fall under US Airways, therefore under US Airways Group INC? ... Or will US Airways Group inc. fall into the NEW AMR?

Coming out of the US Airways BK in 2005, US Airways Group, US Airways, its subsidiaries PSA Airlines Inc and Piedmont Airlines Inc merged with America West Holdings Corporation, parent of America West Airlines. The combined company adopted the better-known US Airways name.


After ...all ... this went down (AWA/US merger) I called the PBGC to discussed being able to start my PBGC retirement at 55 and keep working. They told me on the phone I could have ... if .... the new company had not reorganized under the US Airways name. Plain and simple.

What will they tell us this time, if the new company adopts the better-known American Airlines name?

 

[CaptChill]

If your pension was terminated and taken over by the PBGC, you can begin collecting it at age 60, regardless if you are still actively employed at LCC or not.

 

[usa1]

If your pension was terminated and taken over by the PBGC, you can begin collecting it at age 60, regardless if you are still actively employed at LCC or not.

Depends on what PBGC group plan you fall under. I can start drawing at regular retirement age, in my case 65 and keep working. Or if I leave the company after 55 in my case. Or after 55 if US Airways no longer exist, due change of control or going out of business.

 

[usa1]

In the near future if we need more info on any rulings here's a list of decision makers.

Senate Committee on Health, Education, Labor and Pensions, PBGC

Democrats by Rank

Tom Harkin (IA)
Barbara A. Mikulski (MD)
Patty Murray (WA)
Bernard Sanders (I) (VT)
Robert P. Casey, Jr. (PA)
Kay R. Hagan (NC)
Al Franken (MN)
Michael F. Bennet (CO)
Sheldon Whitehouse (RI)
Tammy Baldwin (WI)
Christopher S. Murphy (CT)
Elizabeth Warren (MA)

Republicans by Rank

Lamar Alexander (TN)
Michael B. Enzi (WY)
Richard Burr (NC)
Johnny Isakson (GA)
Rand Paul (KY)
Orrin G. Hatch (UT)
Pat Roberts (KS)
Lisa Murkowski (AK)
Mark Kirk (IL)
Tim Scott (SC)

 

[usa1]

Found this in our PBGC agreement.

Plan section 2.1 (M) of the Third Amendment to the CE Plan defines Employer as US Airways, Inc., a Delaware corporation, its corporate successors, and the surviving corporation resulting from any merger or consolidation of US Airways, Inc. with any other corporation, and any other member of the controlled group of corporations which has adopted the Plan by appropriate written instrument executed pursuant to the authority of its board of directors.

This was what AFA was told after the AWA take over of US.

Question: Piedmont Airlines and PSA do not exist anymore, just like Eastern Airlines. Why can't I collect my Piedmont or PSA pension at age 62? (early)

Answer: Eastern Airlines did not merge with another carrier and their pension was not integrated into another carrier's pension program. Both Piedmont and PSA pension programs were integrated into the US Airways Pension Program. Your time with Piedmont and PSA counted toward your US Airways Pension (Shuttle as well). http://afausairways....ne/dec27_11.htm

The way I see it, customer service agents should be given full credit based on our years of service in the AMR pension -OR- we should be able to start our PBGC plan and keep working. Obviously the later makes more since, but we will probably see neither.

 

[kamchaser]

When Parker and Horton did their interview on CBS This Morning, it was stated that the company will be run by USAirways management. Sounds like the only change of control is for American employees. Don't count your chickens before they hatch.

 

[AAviator]

How soon you leaving?

(you're welcome)

 

[usa1]

Don't think PBGC activation will happen, the way this has played out. Clearly LCC is taking over AMR. And I found language in our PBGC plan that makes it tougher. Here's a link where someone challenged it when AWA took over US Air.

See bottom of page three .... http://www.pbgc.gov/...-2011-06-20.pdf

AAviator I'm looking forward to working with you real soon!

 

[AAviator]

Clearly LCC is taking over AMR.

See bottom of page three .... http://www.pbgc.gov/...-2011-06-20.pdf

AAviator I'm looking forward to working with you real soon!

looking forward to working with you too.

The combined airline has 2012 revenues of 38.7 billion dollars. Of that, LCC is responsible for 13.8 billion. Thats about 1/3 of the total.

How is it that the new company (LCC) shares are valued at 28% of the new company? Parker paid dearly for this deal.. He had to. How is this a takeover?

 

[flyboeing737]

looking forward to working with you too.

The combined airline has 2012 revenues of 38.7 billion dollars. Of that, LCC is responsible for 13.8 billion. Thats about 1/3 of the total.

How is it that the new company (LCC) shares are valued at 28% of the new company? Parker paid dearly for this deal.. He had to. How is this a takeover?

AAviator don't get baited by the East. They will be posting they saved you from failure. The claim they saved AWA. Next they will demand DOH and access to your widebodies due to being the most experienced pilots in the world.

The AWA pilots look forward to working with you.

For the record Parker is running the show, but AA has a far superior network and assets. This is by no means a takeover.

 

[kamchaser]

"Plan section 2.1 (M) of the Third Amendment to the CE Plan defines Employer as
US Airways, Inc., a Delaware corporation, its corporate successors, and the surviving
corporation resulting from any merger or consolidation of US Airways, Inc. with any
other corporation, and any other member of the controlled group of corporations which has adopted the Plan by appropriate written instrument executed pursuant to
the authority of its board of directors."

This was pulled from the .pdf above. A third amendment to the PBGC agreement. Rules and regulations do change.