PENSION CUTS Congress considers new plan to alow pension cuts

[toroshark]

You are correct; generally, among airline labor groups, only pilots had a defined benefit pension checks that exceeded the PBGC guaranteed amount. Because AA froze the pensions (not terminated them) thanks to the PBGC push-back, the AA pilots will receive their full frozen monthly checks, which will be substantially larger than the US, UA or DL pilots, all of whom had their pensions terminated and handed to the PBGC.In effect, "saving the pensions" will end up costing every AA employee (even the pilots) lots of money in lower wages/benefits so that AA can continue to fund the frozen pensions, which require substantial cash infusions. One would hope that pilots are willing to pick up the dinner tab frequently as a small token of their appreciation for the continued sacrifices of their colleagues to fund pilot pensions.   Also correct - don't know the exact limit, but you're right, it is much lower than the single-employer guaranteed amount. I assume the IAM is looking at the TWU-represented employees the way some people view their sickly, dying rich uncles (can't wait to get their hands on the cash).

Exactly ! The big question is how the TWU can in good conscience can continue onward with this hateful abomination known as the Alliance.

 

[Tim Nelson]

With a congress controlled by Republicans, aren't the chances good that they will get pension reform?  That should make all of us uncomfortable and change our stance in future negotiations on retirement options. Like I always said, YOUR money is better off in YOUR hands. Really disappointing that retirees may have their pension cut in situations.  Shameful actually that someone would even think of it.  One thing it will also do is force older people to keep working and not handing the jobs off to younger people who need jobs.

 

[psa8979]

Justice ! hit the nail on the head concerning Airline Union Workers. The real question i have is how many Monday Morning QB's posting/reading on AF voted in Nov. , how many voted GOP, and how many attended their Local Union Station meetings in 2014 ? To many Brothers/Sisters talk the talk on AF hiding behind their key board's, but do you walk the walk ? We have become our own worst enemies in this Country and WE will get another chance in 2016 to change Gov. policy / Leadership by not voting against OUR ! Unions best interests . Divided Gov. just like divided Union Leadership doesn't work for the Rank/File Member WORKER . Again step up or STFU .

 

[eolesen]

I'm not an authority on this but I believe the PBGC will pay a handed-off pension up to the guaranteed amount which is $45k per year. If that's really the case, few (if any) of us (the rank and file) would take a cut in pension benefits - E or fwaaa please weigh in.

Frank, it's my understanding that the maximum paid out depends on how much the plan is funded at the time it is handed off to PBGC.

If by chance a plan was funded at a high enough level to allow paying benefits in excess of the guaranteed max, the payouts can exceed the max. The reality is that the majority of plans aren't funded well enough meet that threshold.

As far as AA's plans go, I think you're absolutely correct that very few hourly employees have a benefit that exceeds the max.

BTW, which union leader walked away with $20 million in a bankruptcy?

Got me. Were any union leaders ejected from the property by management or the creditors committee? You guys wanted Horton gone, not me.

 

[Realityck]

Frank, it's my understanding that the maximum paid out depends on how much the plan is funded at the time it is handed off to PBGC.

If by chance a plan was funded at a high enough level to allow paying benefits in excess of the guaranteed max, the payouts can exceed the max. The reality is that the majority of plans aren't funded well enough meet that threshold.

As far as AA's plans go, I think you're absolutely correct that very few hourly employees have a benefit that exceeds the max.


Got me. Were any union leaders ejected from the property by management or the creditors committee? You guys wanted Horton gone, not meI y=think the bigger risk is the 

 
 
Although the sIngle employer plans pay a much higher minimum in the event of a PBGC takeover, I believe the greater risk is (as it's been reported recently) that the PBGC has something like 1.5 billion in escrow funds, while it's potential future financial liability is 40 Billion?
 
And the new (AA) management wants the right to extend (reduce) the AA Pension funding - give me a break. Don't forget, the PBGC also  has to agree to take over the Pension Fund under consideration.

 

[Bob Owens]

 
 
 
And the new (AA) management wants the right to extend (reduce) the AA Pension funding - give me a break. 

We agree on this.
 
Feedback I'm getting is the APA and APFA are ok with this and the TWU is waiting to hear why before they respond. 
 
Maybe now that Parker said no to the APFA request they will reconsider.
 
Allowing AA to push this down the road will only hurt us in the future. They will either find a way to default on it or use the liability as a reason to deny wage and benefit increases in the future.  
 
Just curious, didn't you support the legislation that allowed this in the first place back in 2006? 

 

[Realityck]

We agree on this.
 
Feedback I'm getting is the APA and APFA are ok with this and the TWU is waiting to hear why before they respond. 
 
Maybe now that Parker said no to the APFA request they will reconsider.
 
Allowing AA to push this down the road will only hurt us in the future. They will either find a way to default on it or use the liability as a reason to deny wage and benefit increases in the future.  
 
Just curious, didn't you support the legislation that allowed this in the first place back in 2006? 

 
I've never supported anything but 100% funding, anything else is a ripoff

 

[Bob Owens]

 
I've never supported anything but 100% funding, anything else is a ripoff

Yes but what the 2006 law did was allow assumptions that were unrealistic which would allow the company to claim they were 100% funded.
 
So did you support the 2006 law or not? 

 

[Realityck]

Yes but what the 2006 law did was allow assumptions that were unrealistic which would allow the company to claim they were 100% funded.
 
So did you support the 2006 law or not? 

 
One more time:  I've never supported anything but 100% funding, anything else is a ripoff

 

[Bob Owens]

 
One more time:  I've never supported anything but 100% funding, anything else is a ripoff

 
Thats the type of answer that unfortunately many TWU leaders have given in the past and has made many so distrustful of the union. Disingenuous  and evasive is how it comes across. 
 
As I said the 2006 law allowed the airlines to claim they were 100% funded using unrealistic assumptions.  Jim Little lobbied hard for this. So they could claim that legally they were 100% funded even though it was understood that they were not sufficiently funded to cover their obligations and would have to make up for it in the future.  
 
100% funding is not an absolute. 
 
So from what you are saying you could have supported the 2006 law, and still say what you have said twice already. A simple Yes or No would have been easier  to say so that leads me to assume that the answer is yes you supported the 2006 law. 

 

[Realityck]

 
Thats the type of answer that unfortunately many TWU leaders have given in the past and has made many so distrustful of the union. Disingenuous  and evasive is how it comes across. 
 
As I said the 2006 law allowed the airlines to claim they were 100% funded using unrealistic assumptions.  Jim Little lobbied hard for this. So they could claim that legally they were 100% funded even though it was understood that they were not sufficiently funded to cover their obligations and would have to make up for it in the future.  
 
100% funding is not an absolute. 
 
So from what you are saying you could have supported the 2006 law, and still say what you have said twice already. A simple Yes or No would have been easier  to say so that leads me to assume that the answer is yes you supported the 2006 law. 

 
 
You're delusional

 

[AA-MRO.COM]

Sometimes the truth hurts...

 

[Bob Owens]

 
 
You're delusional

Still not a yes or no. 

 

[MetalMover]

We agree on this.
 
Feedback I'm getting is the APA and APFA are ok with this and the TWU is waiting to hear why before they respond. 
 
 

I guess they tend to believe that pension funds as well as the PBGC cannot continue to pay out promised benefits on inflated estimates.

 

[Realityck]

I guess they tend to believe that pension funds as well as the PBGC cannot continue to pay out promised benefits on inflated estimates.

 
 
 
TWU News Release FOR IMMEDIATE RELEASE
December 17, 2014
 
 
CONTACT: Harry Lombardo, TWU International President [email protected] 202-719-3900
 
Statement by Transport Workers Union of America, AFL-CIO President Harry Lombardo on American Airlines’ Push to Amend the Pension Protection Act of 2006
CORPORATE GREED — WHEN DOES IT STOP? AAL Making Record Profits and Asking for Pension Relief
 
Washington, D.C. – The “new” American Airlines is attempting to renege on the legal and binding commitment made during bankruptcy restructuring by sneaking federal legislation through Congress that would let the airline slash its pension contributions. American is going to Capitol Hill to try and secure relief from these commitments during a period of unprecedented profitability one year after exiting bankruptcy and agreeing to the pension funding terms.
 
But here’s the thing: American Airlines doesn’t need relief at a time when earnings are skyrocketing. Current Wall Street 2014 forecasts predict that AA will have pre-tax profits of $4.2 billion. Between 2015 and 2017, Wall Street expects AA’s pretax profits to surge to over $6 billion each year or $18 billion in total. That’s $2 billion more each year than was forecast one year ago!
 
In 2006, Congress granted the airlines special relief for their pension funding requirements. American, Delta and other airline pension plans were frozen during bankruptcies. Delta was allowed to use a 17-year amortization period and an interest rate of 8.85%. (Amortization is the paying off of debt with a fixed repayment schedule in regular installments over a period of time). American was granted a 10-year amortization period with an 8.25% interest rate. Today, American’s executives are claiming they need relief to compete with Delta. But they also state that whether this amortization period is extended or not AA will continue to fund its pension obligations and is happy to do so.What does TWU say? If you’re happy to do so, then do it! Don’t put our members’ pensions at risk. Keep your word. Uphold the commitments you made in federal court during bankruptcy. Don’t steal our retirement when you’re making billions of dollars in revenue.
I am calling on all TWU locals, members and retirees to stand as one with our brothers and sisters at American Airlines. This union will be fighting AA's latest attempt to slash our pension funding with every ounce of our collective strength. We need to make sure that our members can retire with dignity and enjoy the retirement that they have earned. Over the course of the next several weeks, the TWU International will be blasting out action alerts and urging members to contact their elected representatives to voice their opposition to AA's scheme.
 
The International will also be disseminating information to members on our grassroots action plan, spearheaded by the TWU State Conferences and our Air Transport Division locals. The TWU International is committed to pitching the entire force of our national union against this plot to ultimately rob members of their hard-earned pensions. American Airlines, this will not fly!