Company agrees to ALPA Pension Legislative Relief

[Smoke and Mirrors]

Who was the first person to report on this board the ALPA / Management relations were improving and there could be important news about the pilot pension restoration funding news released shortly?

Can we say Chip Munn!

 

[USA320Pilot]

Date: Wednesday, 4 June 2003 16:42 ET
To: USAALLALL.PLT
From: BULER, E.
Subject: Message from Dave Siegel

I am very pleased to inform you that US Airways and ALPA have agreed to legislative language that resolves the concerns previously raised by the Company. As now written, if this bill is passed by Congress, the legislation would provide for the restoration of the US Airways pilots’ pension plan as well as help protect other passenger airline employees’ defined benefit plans.

With the legislation now consistent with our Plan of Reorganization, we will be working with ALPA and other interested airlines to support their plan for getting this legislation enacted.

Dave Siegel

 

[PITbull]

Chip,

Please explain... Siegel''s comment.

And how so?

 

[nycbusdriver]

If this was the approaching "better labor relations with the pilots" that Chip referred to, it''s really sad. So the company agreed to one item that they have been abusing in the contract and side letters.

 

[a320av8r]

"I appreciate ALPA's situation and I would like to see their pension restored. But, not at the other labor groups' expense. Why should we have our pensions jeopardized for 25-35 years when U is required to adequately fund our pensions under the current regulations? Why should we compromise future negotiations? Contact your senators immediately. Please encourage them to help ALPA, but please limit the bill's language to ALPA only!!!!!"

Sure didn't matter anybody when our (pilots) retirement was taken away to fund the rest of the employees!

Screw you!

 

[mlt]

OBG,
Section 2.E of ALPA''s Legislation draft reads:

(E) PBGC LIABILITY LIMITED. For any plan that terminates at a time when the special provisions in paragraph (2)(A) apply to such plan, sections 4022(B)(1), (3) and (7) shall be applied as if the plan had been amended to provide that participants would receive no credit for benefit accrual purposes under the plan for service on and after the first day of the plan year beginning after December 27, 2002.

For the other examples I listed please see ERISA/Internal Revenue Code for the limitations to retirement plans when a deficit reduction waiver is granted.

 

[oldiebutgoody]

----------------
On 6/4/2003 7:55:50 PM mlt wrote:

So this is Labor Friendly? Certainly not for AFA & IAM!

What this legislation does....

1. ALPA stipulates that if any plan terminates during the funding restoration (25-35 years) the plan is capped at 2002 PBGC maximums. A wash for ALPA since their plan was already terminated so they have nothing to lose. A loss for AFA & IAM since PBGC maximum increases annually. Why would AFA & IAM want to have their pensions capped at 2002 PBGC maximums since it is already 2003?

2. The law states there cannot be a change to pension formulas during the funding restoration. US Airways could return to profitability and there will not be an opportunity to increase pensions for the next 25-35 years.

3. The social security offset is here to stay!

4. Expect to live with concessionary agreements for the next 25-35 years. Everytime negotiations roll around get ready to hear: "sorry, nothing available we have to fund your pensions".

I appreciate ALPA's situation and I would like to see their pension restored. But, not at the other labor groups' expense. Why should we have our pensions jeopardized for 25-35 years when U is required to adequately fund our pensions under the current regulations? Why should we compromise future negotiations? Contact your senators immediately. Please encourage them to help ALPA, but please limit the bill's language to ALPA only!!!!!

----------------​

mlt,
I don't see how this could have ANY effect if pensions are liquidated in the future, except for ALPA's. The funding and payout requirements are set by the PBGC, NOT the company. I also don't see how the company can re-fund, then liquidate, without giving even ALPA's plan the new funding limits (unless it does so before 12/31/2007). The other plans don't meet the low fund limits to kame it happen. This would be LAW, and the company cannot change it. Unless somehow it is placed into the new funding legislation, it CAN'T happen, and I don't see how they can make any other plan, especially the ones currently solvent, take anything less than what the law provides for. Mr Siegel, himself, indicates that this is so, and we all believe everything that Dave says....
I wouldn't get all worked up until you see the details. Sounds like a lot of nasty rumors to me.

 

[mlt]

So this is Labor Friendly? Certainly not for AFA & IAM!

What this legislation does....

1. ALPA stipulates that if any plan terminates during the funding restoration (25-35 years) the plan is capped at 2002 PBGC maximums. A wash for ALPA since their plan was already terminated so they have nothing to lose. A loss for AFA & IAM since PBGC maximum increases annually. Why would AFA & IAM want to have their pensions capped at 2002 PBGC maximums since it is already 2003?

2. The law states there cannot be a change to pension formulas during the funding restoration. US Airways could return to profitability and there will not be an opportunity to increase pensions for the next 25-35 years.

3. The social security offset is here to stay!

4. Expect to live with concessionary agreements for the next 25-35 years. Everytime negotiations roll around get ready to hear: "sorry, nothing available we have to fund your pensions".

I appreciate ALPA''s situation and I would like to see their pension restored. But, not at the other labor groups'' expense. Why should we have our pensions jeopardized for 25-35 years when U is required to adequately fund our pensions under the current regulations? Why should we compromise future negotiations? Contact your senators immediately. Please encourage them to help ALPA, but please limit the bill''s language to ALPA only!!!!!

 

[mlt]

A BILL

To provide special funding requirements for certain pension plans maintained by commercial passenger air carriers.

Sec. 1. MODIFICATION OF FUNDING REQUIREMENTS FOR CERTAIN PLANS.

(a) FUNDING RULES FOR CERTAIN PLANS.

(1) IN GENERAL. Notwithstanding any other provision of the Internal Revenue Code of 1986 (the "Code") or the Employee Retirement Income Security Act of 1974 ("ERISA") to the contrary, the funding rules under paragraphs (2), (3) and (4) shall apply for any plan year beginning after December 27, 2002 in the case of a defined benefit plan-

(A) established and maintained by a commercial passenger air carrier; and

(B) that has a funded percentage of less than 80% as of January 1, 2003. For purposes of this section, the following rules shall apply -

(i) The funded percentage is defined as the market value of assets (excluding receivable contributions) divided by current liability as of January 1, 2003.

(ii) The current liability interest rate used shall be 6.65%.

(iii) If the valuation date for the plan is not January 1, 2003, the current liability as of January 1, 2003 shall be estimated based on generally accepted actuarial principles and practices.

(2) MORATORIUM ON DEFICIT REDUCTION CONTRIBUTION.

(A) IN GENERAL. For purposes of section 412(l)(9)(A) of the Code and section 302(d)(9)(A) of ERISA, the funded current liability percentage of a plan described in paragraph (1) shall be treated as not less than 90 percent for plan years beginning after December 27, 2002 and before December 27, 2007.

(B) RULES OF SPECIAL APPLICATION. If the funded current liability percentage of a plan, without application of paragraph (2)(A), is 90 percent or greater during any plan year beginning after December 27, 2002 and before December 27, 2007, the special provisions in paragraph (2)(A) will cease to apply to that plan as of the last day of the previous plan year.

© EXTENSION OF AMORTIZATION PERIODS. For purposes of sections 412(B)(2)(B)(iv) and 412(B)(3)(B)(ii) of the Code and sections 302(B)(2)(B)(iv) and 302(B)(3)(B)(ii) of ERISA, experience gains or losses, if any, for plan years during which the special provisions in paragraph 2(A) apply to such plan shall be amortized over a period of 15 plan years.

(D) OPTION TO COMBINE OR TO OFFSET AMORTIZATION BASES. For the first plan year in which the special provisions in paragraph 2(A) apply to such plan, amounts required to be amortized under sections 412(B)(2) or (3) of the Code, and sections 302(B)(2) or (3) of ERISA, may be combined into one amount under such sections, and may be offset against other amounts required to be amortized under such sections, with the resulting amount in either case to be amortized over a period of 15 plan years.

(E) PBGC LIABILITY LIMITED. For any plan that terminates at a time when the special provisions in paragraph (2)(A) apply to such plan, sections 4022(B)(1), (3) and (7) shall be applied as if the plan had been amended to provide that participants would receive no credit for benefit accrual purposes under the plan for service on and after the first day of the plan year beginning after December 27, 2002.

(3) AMORTIZATION OF 2008 UNFUNDED CURRENT LIABILITY.

(A) IN GENERAL. The sponsor of a plan described in paragraph (1) may make a one-time, irrevocable election to amortize the 2008 unfunded current liability on an interest-only basis for the first 5 plan years (beginning with the first plan year after December 27, 2007) and thereafter in equal annual installments over a period of 15 plan years (beginning with the first plan year after December 27, 2012).

(B) DETERMINATION OF 2008 UNFUNDED CURRENT LIABILITY IN CALCULATING DEFICIT REDUCTION CONTRIBUTION AFTER MORATORIM ENDS. If the plan sponsor makes an election under paragraph 3(A) with respect to a plan, the plan’s 2008 unfunded current liability will be calculated as follows:

(i) the 2008 unfunded current liability shall equal the unfunded current liability as of the first day of the plan year beginning after December 27, 2007, and

(ii) the 2008 unfunded current liability shall be calculated using the actuarial value of assets as of the first day of the plan year beginning after December 27, 2007.

© USE OF 2008 UNFUNDED CURRENT LIABILITY IN CALCULATING DEFICIT REDUCTION AFTER MORATORIUM ENDS. If the plan sponsor makes an election under paragraph 3(A) with respect to a plan, the plan’s unfunded old liability, for purposes of section 412(l) of the Code and section 302(l) of ERISA, shall mean the 2008 unfunded current liability calculated under paragraph 3(B), and the plan’s unfunded old liability amount for any plan year, for purposes of section 412(l) of the Code and section 302(l) of ERISA, shall be the amount necessary to amortize the unfunded old liability under the plan as described in paragraph (3)(A).

(D) CESSATION OF MODIFICATIONS. If the funded current liability percentage of a plan, determined without regard to this section 1, is 90 percent or greater for any plan year after December 27, 2002, the special provisions of paragraph (3) shall cease to apply to that plan as of the last day of the previous plan year.

(4) RECOGNITION OF WAIVER IN DEFICIT REDUCTION CONTRIBUTION. For any plan described in paragraph (1), section 412(l)(8)(A) of the Code and section 302(d)(8)(A) of ERISA are amended by adding at the end the following sentence: "In the case of a plan maintained by a commercial passenger air carrier, the following shall be substituted for clause (A)(ii): "the sum of -

(I) the value of the plan''s assets determined under subsection ©(2), and

(II) the unamortized portion of any waived funding deficiency."

(B) SPECIAL RULE FOR PLANS TERMINATING IN 2003.

(1) IN GENERAL. Notwithstanding any other provision of the Internal Revenue Code of 1986 or the Employee Retirement Income Security Act of 1974, the provisions of paragraph (2) shall apply to any defined benefit plan -

(A) maintained by a commercial passenger air carrier,

(B) for the benefit of such carrier''s employees pursuant to a collective bargaining agreement, and

© which terminated during the 2003 calendar year.

(2) SPECIAL RULE. A plan described in paragraph (1) shall be restored by the Pension Benefit Guaranty Corporation to the plan''s pre-termination status and the control of the plan''s assets and liabilities shall be transferred to the employer, unless the collective bargaining agreement provides that the plan should not be restored.

© EFFECTIVE DATE. The amendments made by section shall apply to plan years beginning after December 27, 2002.

 

[Twicebaked]

----------------
On 6/4/2003 5:22:52 PM nycbusdriver wrote:

If this was the approaching "better labor relations with the pilots" that Chip referred to, it''s really sad. So the company agreed to one item that they have been abusing in the contract and side letters.

----------------​

This will NOT build a bridge with employee relations with the company. Once again, we are going back to the way things have always been...the pilots only looking out for the pilots. Although they may now kiss Dave on the lips for this one and invite him to dinner....this doesn''t do crap for any other labor relations with the company

 

[a320av8r]

"...the pilots only looking out for the pilots."

I don''t belong to IAM or AFA, I belong to ALPA.
I didn''t see you guys stand up for the pilots while the company terminated our retirement fund to fund yours.

 

[oldiebutgoody]

----------------
On 6/4/2003 8:44:06 PM mlt wrote:

OBG,
Section 2.E of ALPA's Legislation draft reads:

(E) PBGC LIABILITY LIMITED. For any plan that terminates at a time when the special provisions in paragraph (2)(A) apply to such plan, sections 4022(B)(1), (3) and (7) shall be applied as if the plan had been amended to provide that participants would receive no credit for benefit accrual purposes under the plan for service on and after the first day of the plan year beginning after December 27, 2002.

For the other examples I listed please see ERISA/Internal Revenue Code for the limitations to retirement plans when a deficit reduction waiver is granted.


----------------​

Since your plan is not already terminated or funded less than 90%, those "special provisions in paragraph 2A" don't apply (the way I read it). Therefore, your plan is NOT affected. You guys are just looking for more reasons to fight against ALPA. Your statements ARE FALSE concerning this affecting any other plan besides the already terminated PILOT plan. Also, my intrepretation of course, is that any time the fund reaches a funding level of over 90% (during the re-funding period), these provisions would stop applying to it as well, basically returning it to solvency and stopping those onerous liquidation provisions. All we need is the economy to recover, bond rates to increase some ( which they will, and I would predict MUCH higher than they are now), and all would be back to normal.

 

[MarkMyWords]

----------------
On 6/5/2003 7:53:29 AM a320av8r wrote:

"...the pilots only looking out for the pilots."

I don''t belong to IAM or AFA, I belong to ALPA.
I didn''t see you guys stand up for the pilots while the company terminated our retirement fund to fund yours.

----------------​

and I didn''t see ALPA standing up for the gate agents and the ramp agents when they lost their pension in the early 90''s/.

 

[oldiebutgoody]

----------------
On 6/4/2003 8:44:06 PM mlt wrote:

OBG,
Section 2.E of ALPA''s Legislation draft reads:

(E) PBGC LIABILITY LIMITED. For any plan that terminates at a time when the special provisions in paragraph (2)(A) apply to such plan, sections 4022(B)(1), (3) and (7) shall be applied as if the plan had been amended to provide that participants would receive no credit for benefit accrual purposes under the plan for service on and after the first day of the plan year beginning after December 27, 2002.

For the other examples I listed please see ERISA/Internal Revenue Code for the limitations to retirement plans when a deficit reduction waiver is granted.


----------------​

What concerns me about this provision, is that if the plan is terminated in say, 10 years, the total retirement for folks at that time would be whatever they would have qualified for in Dec 2002, WITHOUT a defined contribution plan to help out. Looks like kind of a raw deal to me, unless I don''t interpret this correctly (a possibility, since I''m not a PBGC lawyer).

 

[oldiebutgoody]

----------------
On 6/5/2003 125 PM MarkMyWords wrote:

----------------
On 6/5/2003 7:53:29 AM a320av8r wrote:

"...the pilots only looking out for the pilots."

I don''t belong to IAM or AFA, I belong to ALPA.
I didn''t see you guys stand up for the pilots while the company terminated our retirement fund to fund yours.

----------------​

and I didn''t see ALPA standing up for the gate agents and the ramp agents when they lost their pension in the early 90''s/.



----------------​

Were the agents under a contract at the time? if so, they must have given it up in exchange for something else (I don''t remember any kind of "job action" by the rampers or gate agents at that time). If you were not working under a contract (i.e. had no union) and the company took it away, just what do you expect ALPA could have done about it? Your argument just makes NO SENSE!