A terminated pension is paid by the PBGC until they run out of money then what? You think the teabaggers in Washington are going to make sure you get your pension? It is common knowledge that the PBGC cannot afford to cover all the pensions it has now, never mind ours which is grossly underfunded. And apparently you have not been paying attention. All the big wheels in management are saying there will be billions of profits.
So now, you trust airline management to find enough money to keep the pension checks coming but you don't think Gotbaum and the rest of the PBGC is smart enough to come up with the money? Your post smacks of the common refrain of "Social Security will run out of money and I won't get my checks." If the PBGC runs out of money, there would of course be a political fight, but the taxpayers would eventually bail them out, just like the recurring bailouts of the financial industry.
Perhaps, but as a fiscal conservative, it was the proper way to handle it --- make the employer who promised the benefits (or their corporate successor) be responsible for funding them.
As a fiscal conservative, I agree with you. Forcing AA to keep laying out hundreds of millions of dollars a year is the right thing. Hell, Arpey did the right thing - thousands of pilots received hundreds of thousands of dollars each that they would not have received if AA had filed for Ch 11 in 2003 and terminated its pensions. And even the lower paid rank and file accumulated an additional nine years of benefits, and AA contributed more than $2 billion to the pension trusts in those nine years.
I argued that US and UA should have been liquidated when they terminated their pensions, but that was deemed "heartless and cruel" here and and other fora (think of all those low-wage bottom feeding pilots, FAs, mechanics, fleet service and agents who would be out of jobs - well at least until other airlines hired them).
Thing is, the pension expense has been a huge, heavy brick in the backpack for those nine years, and now, even though AA finally bit the bullet and filed for Ch 11, all they accomplished on the pension front was a freeze, leaving AA on the hook for billions of contributions above and beyond those faced by UA. Even though DL terminated its pilot pensions, its level of underfunding was so severe that its frozen pensions consume as much cash as AA's pre-bankruptcy pensions.
Recall all the ignorant knashing of teeth when Bob Owens and Dave learned that, gasp, AA was still paying lease payments on several F-100s, and it was extravegant spending like that which caused AA's bankruptcy, not higher labor costs? Requiring that AA keep paying several hundred million a year on its frozen pensions is like keeping a fleet of hundreds of late-model planes in the desert that AA doesn't fly but must make the lease payments. Those F-100s likely didn't cost $100k/year in lease costs, but AA employees are actually celebrating higher on-going costs for AA forever in the neighborhood of hundreds of millions of dollars without any of that money flowing into their pocket (other than the pilots).
THAT's what I'm laughing at.
There's no good excuse I can think of which would justify third parties being expected to clean up the mess left behind when there's a clear corporate successor (as there is with both UA and DL), whether it be thru PBGC insurance premiums for those companies who still have DBP's or taxpayers when the PBGC runs out of money.
I know we're getting into public policy issues here, but at some point, the PBGC was going to rebel. And I'd love to see someone take a retroactive action against DL & UA.
Agreed. Don't forget retroactive action against AA, as US terminated all of its woefully underfunded pensions as well. I'm arguing for a level playing field, so Parker should have to pay even more to cover BoeingBoy and all the other victims of fomer Crystal City US management.
