Pension Relief Passes Senate

[Dizel8]

767jetz,

That certainly is good news and will go a long way to recovery. Just make darn sure, that UAL Corp, starts putting money into the fund and gets it to solvency.
Right now, they have been given reprieve, but unless they add to it, the hole could be even bigger in two years.

 

[Boeingguy]

The defined benefit plans at airlines such as UAL are little more than a pyramid scheme. Retirees, with longer life spans will be and are becoming too large in numbers to cover. The new legislation has done little more than postpone the inevitable. Defined contribution plans are the way to go. I just love it when pilots at defined benefit plans tout their pension plans and discount my well matched 401K but then have to depend on legislation or sweat out what bankruptcy courts will do and worse yet down the road my tax dollars via the PBGC going towards their retirement.

 

[Busdrvr]

"I just love it when pilots at defined benefit plans tout their pension plans and discount my well matched 401K"

Does your company put a match in your 401K that equals 9% of salary? What if you don't contribute, do they add money anyway?

"and worse yet down the road my tax dollars via the PBGC going towards their retirement."

Yeah, and we really hate the prospect of having to fund your retirement through increased SS and medicare payments because you and a few of your "single 401K" retirement pals make a stupid investment decision. Diversification, live it.

 

[mweiss]

Apples to oranges, Busdrvr,

You can compare your pension to someone else's 401k, but unless you're pretending that your pension includes diversification, your comment is out of line.

After all, I can assure you that I really hate the prospect of having to fund your retirement through increased SS and medicare payments because you and a few of your "pension" retirement pals make a stupid retirement planning decision. Diversification, live it.

 

[ual06]

Folks, the bottom line is that no one can truly know how their retirement plans worked out; until they take a look on the day they die.

 

[Busdrvr]

Uh, Mweiss, you apparently don't understand UAL's pension PLANS (there are TWO). First, the A-fund. It's a defined benefit plan. Subject to pension funding laws, ect. Then they have the B-fund. It is PILOT DIRECTED. The company contributes 9% of wages (used to be 11%) and the PILOT CONTROLS it. That's diversification. One fund run by a pension fund manager and ONE run by the individual (subject to the same investment rules as retirement funds). It's comical to hear some "NA, NA your pension sucks" from some schlep with a 5% match, who then has the audacity to suggest that he'll have to fund my retirement. It's much more likely I'll be funding his.

 

[mweiss]

And how is it that a self-directed pension differs from a 401k? It walks like a duck, and quacks like a duck.

 

[Busdrvr]

And how is it that a self-directed pension differs from a 401k? It walks like a duck, and quacks like a duck.

If something happens and schmedly can't contribute to 401K, usually his company won't either. With a B-fund, the company contributes either way. So in addition to walking and quacking like a duck, it also does windows. It's a VERY talented duck. But in any case, it's comical to see BB slam UAL's pension while not realizing that HALF of UAL's pension (the B-FUND) is STILL better funded by UAL than his ENTIRE 401K

 

[Whadayano]

Not to change the topic, but there is some reference in this string to UAL having gotten out from under in some muni deals, and I see another airline said something about special facility bonds perhaps being undoable now. Can anyone give an answer, or post a link to the relevant lawsuit that UAL won? Thanks!

 

[Busdrvr]

"You can read more details about this agreement, which is still subject to final city and bankruptcy court approval in the next week, here."

Go back to Cosmo's post on this thread ands click on the "here"

 

[iflyjetz]

IFlyJetz....the same thing happened to me. I got a suspension warning for using his name so I quickly deleted the post.

You got a warning? Todd didn't bother giving me a warning; he just suspended me. I wasn't too pleased, because I was unable to respond to him by PM due to suspension (you can't PM while suspended).

 

[bigbusdrvr]

With this pension legislation will united be able to show a 7% profit??

If they can they will be a shoe-in for the ATSB!!! If they can't well, I don't believe their is any lee-way,not unlike the IRS. No 7%, no loan guarantee.....

But that does not stop Goldman or anyone else from loaning, albiet at a higher interest rate.... all they have to do is figure out how to explain it to their shareholders.....

Explain why they loaned out the shareholders money when even the US government thought it was a bad risk.....oooooh......tough sell!!!

Good luck!! Your POR wasn't predicated on a ATSB loan was it?? Not with oil at 38$ plus..... shoot ...No legacy carrier could forcast a 7% profit with 38$ oil...

This will be an intersting summer!!!

 

[avek00]

If they can they will be a shoe-in for the ATSB!!! If they can't well, I don't believe their is any lee-way,not unlike the IRS. No 7%, no loan guarantee.....

You are correct - the company must prove that it can ultimately produce a sustained operating margin of at least 7% in order to receive ATSB approval. To put that into some kind of context, most of the US majors did not maintain a ten percent margin during the height of the late 1990s travel boom.

 

[Busdrvr]

"No legacy carrier could forcast a 7% profit with 38$ oil..."

Concensus estimate by economist is oil at 31-31 a barrel by year end.

"You are correct - the company must prove that it can ultimately produce a sustained operating margin of at least 7% in order to receive ATSB approval."

And how many years do they have to do it?

"To put that into some kind of context, most of the US majors did not maintain a ten percent margin during the height of the late 1990s travel boom."

Sure, let's put it into perspective. What was FRNT's margin in the 90's? AWA's?

 

[peasant]

Must admit, as a foreign observer, a bit confused by the pension relief.

My airline (Cathay) also had funding shortfall in p funds, so injected extra 650m HKD (over and above normal contributions) this year, which was significant (given that profit was only 1.3 billion)

So, you seem to be playing double or quits with the pensions, and the retirees. IF all goes well, United will still have to pay the piper in x years time. If it doesn't, you (and the current retirees) are shafted worse than otherwise, because no top ups.

Now, for a 35 year old, that is an acceptable gamble. But what do the 70 year olds think? Were they asked?