Pension Issue

[Analyst]

Who first said UA employee pension concessions were not enough only to be widely criticized by 767jetz?

"United's pension funding problem is one of the biggest issues left facing Denver's dominant carrier as it tries to obtain financing to exit bankruptcy in the first quarter of next year, United spokesman Jeff Green said."

Retired pilots defend pensions

 

[A319FA]

Where will UA obtain the $1 Billion in 2004? I find it interesting that US has several investors.

“Potential investors "don't want to see their money financing the pension plans," he said.â€￾

United pension fuels anxiety


This is not good news for UA and the other carriers.

Airlines not expected to get big lift from business travelers this fall

 

[767jetz]

I guess I will just have to keep pointing out that quoting news articles from uninformed journalists does not constitute a credible source.

#1 Pension issues ARE a large obstacle for UA. No one ever said they weren't.
#2 Each employee group's pension is underfunded to a different degree and each group will have to come up with ideas to save them.
#3 ALPA has several contingency plans in place. (Try not to lose any sleep worrying about us.)
#4 Pensions do NOT need to be fully funded, only funded to the level required by law. ie: If a pension is $1.8Billion underfunded, it does NOT require a $1.8Billion payment.



I find it interesting that bitter USAir employees find the need to come here and show such a strong interest in our pension plans. Don't you guys/gals have your own problems to focus on?

 

[Analyst]

WASHINGTON, Sept 15 (Reuters) - The government estimated on Monday the worst-case pension shortfall at United Airlines UAL.N is $7.5 billion, but there was no support from the Bush administration for legislation being pushed by the bankrupt carrier to ease that liability.

United must resolve its pension problems if it hopes to receive a federal loan guarantee to underpin $2 billion in financing the airline says it must have to exit Chapter 11 bankruptcy protection. A source familiar with the government's consideration of that assistance said the pension shortfall is the last remaining hurdle to getting that guarantee.

Article: Worst-case pension shortfall at UAL is $7.5 Billion

United Airlines' ability to emerge from bankruptcy may rest on whether it can muster the cash to pay both its pension obligations and its other debts

WASHINGTON (New York Times) - The Senate Finance Committee is expected to vote tomorrow on a bill that would offer relief to severely troubled pension plans - including those at airlines - and would radically change the way companies calculate their pensions.

Article: Senate Panel Expected to Vote on Bill to Aid Pension Plans

 

[Busdrvr]

ALPA's pension fund is the least underfunded.
F/A's and mechs have the least to loose with termination (Max payouts may be near accrued benefit). would not be surpised to see UAL, with approval from the unions, terminate the F/A and IAM (AMFA) pensions and retain the ALPA fund, leaving you holding the bag (you asked for it...)
UAL's pension are considered more underfunded because they changed the pension assumptions to the most conservative in the industry.
If UAL were to terminate the funds, the government, by taxing all you idiot UAL bashers, will pick up the slack, to the tune of $5 billion.
If they get relief, you UAL bashers can use that tax savings to buy all the tickets you want on whatever scab outfit you typically fly.
The potential PBGC liability is NOT the same as the companies. The PBGC uses MUCH more conservative assumptions.

 

[Fly]

F/A's and mechs have the least to loose with termination

Huh? :angry: We have the least to lose? We have nothing already. The pilots have the most and you think yours should be retained? I would be mighty surprised to see your scenario happen. The pilot group as a whole isn't the most loved employee group after 2000. Imagine the backlash if the group that began Uniteds mess were the group that got to keep their pensions! I figure the mechanics would close down the airline after that one.

 

[ualflynhi]

Fly I think the IAM,and the F/A's pension payments even if they were paid by
the P.B.G.C. would about the same as they are now.Do you think they will pay
80,000-100,000 a year for a ALPA pension recipient ? Isnt the max payment
from the P.B.G.C. about 30,000 a year ?

 

[UAL_TECH]

FYI,

http://www.pbgc.gov/benefits.htm

*** Straight from The Source ***

What is the maximum amount that PBGC can guarantee?

PBGC's maximum benefit guarantee is set each year under provisions of ERISA. For pension plans ending in 2003, the maximum guaranteed amount is $3,664.77 per month ($43,977.24 per year) for workers who retire at age 65. This guarantee amount is lower if you begin receiving payments from PBGC before age 65 or if your pension includes benefits for a survivor or other beneficiary. The guarantee amount may be higher if you retire after age 65 or if you are over age 65 and receiving benefits when the plan ends. The table at the end of this booklet shows PBGC's maximum guarantee for retirement at various ages. For certain disability benefits, special rules apply (see the following question). Other guarantee limitations that may apply are described in the questions and answers that follow.

PBGC MAXIMUM MONTHLY GUARANTEES

Below are examples of the maximum guarantee for a single life annuity with no survivor benefits for retirement at ages 65, 62, 60 or 55. The maximum is lower if the benefit is paid in a form other than a single life annuity, such as a form that provides for survivor benefits. The pension benefit that PBGC can pay will depend on your age, the provisions of your plan, the form of your benefit, the legal limits on what PBGC can guarantee, and amounts PBGC recovers from employers for plan underfunding.

[Monthly Guarantee Table]

-------------------------------------------
2003 Monthly Guarantee Limit
Age 65 = $3,664.77
Age 62 = $2,895.17
Age 60 = $2,382.10
Age 55 = $1,649.15
------------------------------------------

Single copies of publications and fact sheets are available from: Pension Benefit Guaranty Corporation, Communications and Public Affairs Department, 1200 K Street NW, Suite 240, Washington, DC 20005-4026.


Take Care,
:blink: UT

 

[737nCH11]

Easy there Fly. I thought we were friends. <_<

 

[Farley]

If UAL were to terminate the funds, the government, by taxing all you idiot UAL bashers, will pick up the slack, to the tune of $5 billion.
If they get relief, you UAL bashers can use that tax savings to buy all the tickets you want on whatever scab outfit you typically fly.

Wow! You lost your perspective and your credibility all at once. O.K. Attack!

 

[767jetz]

Fly,

Busdrvr is correct, and I don't think he meant that F/A'S & mechanics would get screwed. I think he said "with union approval." In other words, the pension amount that these employees would normally receive is below the PBGC limit. Therefore, if the plans were terminated those employees should still see the same pension dollars they would have anyway. The only difference is that it is payed out by the PBGC instead of UAL. Some might even argue that you're better off having the PBGC responsible for your pension if the amount is going to be the same anyway. The PBGC = Taxpayer's money.


Pilot pensions are generally above the PBGC limit, and most would see significantly less than expected. Pilots have already taken 7 hits to their retirement with the new contract. (1. Lower multiplier, 2. Yrs of service capped at 30, 3. Payment based on actual instead of book rates, 4. Actual rates took a 30% cut, 5. Pilots on the 747 and Aibus took an additional reduction in rates, 6. B-fund contribution % reduced, 7. B-fund is based on lower pay rates listed in 4&5)

Any plan will be worked out and agreed to by all parties. We're in this together. I hope no one wants to see their fellow employees get screwed to protect themselves.

 

[RowUnderDCA]

But I don't think that PBGC is taxpayers' money. At least not yet. But why let facts stand in the way of outrage.

 

[Busdrvr]

Fly, see 767's reply. I could see a solution whereby you get your ENTIRE pension (backed by Sammy), only with the signiture of the PBGC on the bottom. Pilots must retire at 60, so a complete PBGC solution would actually pay a pilot LESS in retirement than just about anybody with a 65 yo retirement. U set the stage by selectively terminating one plan, so it is legal. Make no mistake, I fully support you getting 100% of the retirement you earned.

Roll under, You're right, the PBGC will just run down to the good old printing press in the basement and print up more cash, or maybe they'll pick some more cash off the money tree in the backyard.... <_< does the S&L collapse of the late 80's ring a bell? The PBGC has NO WAY to pay the full amount they would be required to pay out by LAW. Who will pay? YOU!

 

[ual06]

Just a thought on this matter. Don't mean to ruffle any feathers. Let me see if I can explain my thoughts.

First, a person's pension is very important to each individual. Apparently UAL is looking at major problems on funding their pension plans. It does appear that UAL considers the termination of some or all of the plans as a last option.

It has been noted here that the IAM and F/A's would most likely take a smaller "percentage" reduction in benefits than the pilots would. It would not be fair for these two groups to take a hit by their plans going to the PBGC and have the pilots
remain whole.

Someone, somewhere does have the ability to determine the percentage reduction in benefits that the IAM members and Flight Attendants may take if their plans were to go the PBGC.

Now assume that the company were able to terminate the two plans and retain the pilots plan. Using the percentage number computed, the pilots plan could be rewritten to reflect the same percentage reduction, thereby reducing the company's
liability. Perhaps an approach such as this would be considered fair by all employee groups.

Perhaps a benefit to IAM and F/A's is that their plans would now be "protected" by Uncle Sam.

The pilots plan would still depend on the health of UAL.

 

[UAL_TECH]

Just a thought on this matter. Don't mean to ruffle any feathers. Let me see if I can explain my thoughts.

First, a person's pension is very important to each individual. Apparently UAL is looking at major problems on funding their pension plans. It does appear that UAL considers the termination of some or all of the plans as a last option.

It has been noted here that the IAM and F/A's would most likely take a smaller "percentage" reduction in benefits than the pilots would. It would not be fair for these two groups to take a hit by their plans going to the PBGC and have the pilots
remain whole.

Someone, somewhere does have the ability to determine the percentage reduction in benefits that the IAM members and Flight Attendants may take if their plans were to go the PBGC.

Now assume that the company were able to terminate the two plans and retain the pilots plan. Using the percentage number computed, the pilots plan could be rewritten to reflect the same percentage reduction, thereby reducing the company's
liability. Perhaps an approach such as this would be considered fair by all employee groups.

Perhaps a benefit to IAM and F/A's is that their plans would now be "protected" by Uncle Sam.

The pilots plan would still depend on the health of UAL.

You aren't really trying to be serious, are you?

:huh: UT