Is the AMT Pension next concession of the TWU?

[Hopeful]

The way things are going in this country and industry, I agree with you. The thing is:a pension should be untouchable by AMR even in bankruptcy and that's for everybody not just Carty and Arpey. Pensions should not be used to pad executives pocketbooks either.

I totally agree. I also think that NO bankruptcy judge should have the power to rule on a pension plan that is backed by the TAXPAYERS money!

 

[TIME FOR CHANGE]

Either AMR pays or the taxpayer pays. No matter how you look at it its positvie cash flow until I die.

 

[410OhOne]

What I think they will try and do is try and go with a 401K for new hires with the promise that those of us on the defined plan will remain on it, for now....

Did he say new hires???

 

[Oneflyer]

Just wondering what you would consider a fair buyout of say a 20 year employee?

It is hard to say without knowing the pension rules, but the payout is a discounted cash flow of the future pension payments. For example, someone at retirement age that is due $65,000 a year in a fully vested pension with a say 20 year expected life span would be due between $615,000 to $715,000 base upon a 6.5% or 8.5% interest rate.

Now say that person is fully vested but 20 years from retirement, they'd only be due between 120k and 203k using those same numbers.

Either AMR pays or the taxpayer pays. No matter how you look at it its positvie cash flow until I die.

1. Its not the taxpayer, its pension insurance paid for by companies like AMR.

2. If the Pension Guarantee Corp takes over the plan, you'll get about half of what you'd get otherwise. Positive cash flow, just a lot less.

I totally agree. I also think that NO bankruptcy judge should have the power to rule on a pension plan that is backed by the TAXPAYERS money!

How is the AMR pension backed by taxpayers?

 

[MCI transplant]

Either AMR pays or the taxpayer pays. No matter how you look at it its positive cash flow until I die.

<_< ------ Obviously you don't know a damn thing about the PBGC!(semi-Government backed found) First, if it should go to them, you may only receive pennies on a dollar for your promised retirement! Would you agree to take 50% or more less then what was promised you? Dealing with these people, that's exactly what could happen!!

 

[777 fixer]

I totally agree. I also think that NO bankruptcy judge should have the power to rule on a pension plan that is backed by the TAXPAYERS money!

The PBGC is not backed by the taxpayer. Money paid out by the PBGC comes from insurance premiums paid by companies with a defined benefit plan, investment income, money from the pension plans taken over by the PBGC and "recoveries" from companies that handed over their pension plans to the PBGC. An example of this is the UAUA stock the PBGC got as part of the deal for taking over United pension plan.

 

[eolesen]

First, if it should go to them, you may only receive pennies on a dollar for your promised retirement! Would you agree to take 50% or more less then what was promised you?

Certainly, you won't get the same benefit from the PBGC as though you worked all the way up to retirement and continued to earn a multiplier based on years in the plan, but pennies on the dollar is just a bit overstated.

Unless you're over the max insurable benefit (around $45K per year), you get exactly what would have been due to you at the time the plan was terminated.

If you don't already have a 401K or IRA set up in addition to your pension, do it now or sit down with a financial advisor to look at options if you think you're too close to retirement age. Just 10 years after opening it, my 401K was at the point where it exceeded my monthly pension benefit, and where the monthly interest earned was exceeding what I was putting into it each month (less than 4% of my monthly salary without a company match).

 

[limit]

Certainly, you won't get the same benefit from the PBGC as though you worked all the way up to retirement and continued to earn a multiplier based on years in the plan, but pennies on the dollar is just a bit overstated.

Unless you're over the max insurable benefit (around $45K per year), you get exactly what would have been due to you at the time the plan was terminated.

If you don't already have a 401K or IRA set up in addition to your pension, do it now or sit down with a financial advisor to look at options if you think you're too close to retirement age. Just 10 years after opening it, my 401K was at the point where it exceeded my monthly pension benefit, and where the monthly interest earned was exceeding what I was putting into it each month (less than 4% of my monthly salary without a company match).

Hmmmm. You must have done real well.
Personally my 401k is nowhere near what my full pension would be.
I have been in the 401k for 15 years with a contribution of 5% to start ( then 7.5% and now at 12%),having averaged a 17.5% return over those years.
How much you make and how old you are is extremly importand, as it puts 45 somethings and up ,earning mechanics wages at a distinct dissadvantage.

 

[Wretched Wrench]

Take the cash buy out, buy an annuity with a AAA rated bank. You'd maybe give up 5-15%, but you'd get a hell of a lot more security.

What cash buy out is that? Do you mean a lump sum? The TWU gave that away in the 70's. All we get is a monthly promise. 38 years gets me half of my best base pay.

Actually, a DC plan could be better, depending on the company match. Even if the dollars were the same, a DC contribution cannot be stolen, like a DB benefit can. The company can default on it, the PBGC can parcel it out so you only get some of it, or your benefits can be wiped out by simple underfunding of the PBGC by our gummint.

I would feel much safer with a decent DC plan for those reason.

If we can learn from history, the company has already indicated what they want, by the way the plan changed for non union workers a few years ago. What they did was what is called a soft freeze of the DB plan. I would expect something similar to be accepted by the TWU. We will not be allowed to vote on it. Surprise. Little's TWU DB pansion will not be subject to these changes.

 

[TIME FOR CHANGE]

<_< ------ Obviously you don't know a damn thing about the PBGC!(semi-Government backed found) First, if it should go to them, you may only receive pennies on a dollar for your promised retirement! Would you agree to take 50% or more less then what was promised you? Dealing with these people, that's exactly what could happen!!

100 percent or 50 percent it is still positive cash until I die. I'll take my chances with the pension plan.

And with aa you will only see pennies to the dollar for a matched 401.
Do you really think they are going to give you more money then your pension would pay. I doubt it

 

[MCI transplant]

<_< ----You know the Company monitors this Board! Could this whole thread be a test balloon to see if there is any acceptance for the idea! Frankly I'm not willing to give them sqwat! We've given them way too much already!!! :angry:

 

[AMFAMAN]

<_< ----You know the Company monitors this Board! Could this whole thread be a test balloon to see if there is any acceptance for the idea! Frankly I'm not willing to give them sqwat! We've given them way too much already!!! :angry:

No I'll gladly sellout for a buyout of 50k per a year of service.

 

[MCI transplant]

No I'll gladly sellout for a buyout of 50k per a year of service.

<_< ----- And I thought I was a dreamer!

 

[FWAAA]

<_< ----You know the Company monitors this Board! Could this whole thread be a test balloon to see if there is any acceptance for the idea! Frankly I'm not willing to give them sqwat! We've given them way too much already!!! :angry:

What? You mean that TWU Informer now floats the company trial balloons for the company? B)

I agree with Mr Owens. For now, the DB pension contributions are likely still cheaper than the alternatives. When that flips around, maybe AMR comes to you with hat in hand.

From my recollection, not only does UAL now have a 401(k) match, but the company makes a contribution to the employee's DC plan regardless of the employee's contribution. I don't recall the percentage, but we'll know how expensive it is at the end of 2006.

One point of reference: CAL's required contributions to its DB plans this year are $258 million v. $250 million at AMR. Given that AMR enjoys revenue about double that of CAL, AMR's pension contributions aren't painful at all. CAL just sold more COPA stock to raise cash for its maturing debt and pension contributions, while AMR has already made this year's contributions out of cash on hand. CO: Burning the Furniture; AMR: Plenty of positive cash flow.

Next year, however, under current law, AMR will have to make up all of the underfunding, which is nearly $3 billion at 12/31/05, unless Congress and the President agree to pension funding changes. And that looks less likely each day. Dunno whether AMR is likely to contribute $3 billion to keep the pensions or whether it will propose some sort of cash balance plan.

 

[1 VF-1 2NV]

So that is why aa is building their cash reserve to 4 billion I think.