Pensions..new Turn In The Road

[fix_airplanes]

Pension help for US airlines proposed

Friday April 22, 2005

Legislation to give US airlines more time to make payments to underfunded employee pension plans was proposed by US Sens. Johnny Isakson (R-Ga.) and John Rockefeller IV (D-W.Va.) earlier this week.

The Employee Pension Preservation Act of 2005 would allow carriers to spread their deferred pension funding obligations over 25 years instead of the current four years.

In return, unions would have to agree to freeze their benefits at the current level.

The bill also limits the liability of the US Pension Benefit Guaranty Corp., which may have to seek a federal bailout if more airlines terminate their pension plans in bankruptcy, as United Airlines has said it will do.

In a statement, Air Line Pilots Assn. President Duane Woerth said the proposed legislation "comes not a minute too soon." :angry:

 

[aafsc]

Pension help for US airlines proposed

Friday April 22, 2005

Legislation to give US airlines more time to make payments to underfunded employee pension plans was proposed by US Sens. Johnny Isakson (R-Ga.) and John Rockefeller IV (D-W.Va.) earlier this week.

The Employee Pension Preservation Act of 2005 would allow carriers to spread their deferred pension funding obligations over 25 years instead of the current four years.

In return, unions would have to agree to freeze their benefits at the current level.

The bill also limits the liability of the US Pension Benefit Guaranty Corp., which may have to seek a federal bailout if more airlines terminate their pension plans in bankruptcy, as United Airlines has said it will do.

In a statement, Air Line Pilots Assn. President Duane Woerth said the proposed legislation "comes not a minute too soon." :angry:

[post="263876"][/post]​

If this passes, does that mean the whole plan is frozen and replaced by a 401(k)? Or does it mean the pension plan goes on but that the unions can never ask for an increase in pension benefits? And if it is the second one, would it be better to have a 401(k)? Because as the cost of living continues to climb the pension levels will be stuck where they are now for a long time.

 

[eolesen]

If this passes, does that mean the whole plan is frozen and replaced by a 401(k)? Or does it mean the pension plan goes on but that the unions can never ask for an increase in pension benefits? And if it is the second one, would it be better to have a 401(k)? Because as the cost of living continues to climb the pension levels will be stuck where they are now for a long time.

[post="264018"][/post]​

Not entirely sure, but it sounds like if we elect to keep our pensions, the PBGC won't guarantee them to the same degree they do for the steel industry, automotive manufacturers, or coal miners....

It's one thing to negotiate freezing the plan between management and the union. It's another thing to be told by the Feds that we have to freeze our pensions in order to receive the same federal protection everyone else has...

 

[scorpion]

It means if your close to retirement you might be okay but if not the GPBC is getting off the hook along with US Air getting a reprieve on missmanagement.

 

[fix_airplanes]

First of all; this proposed legislation has nothing in it about any further pension plan replacements (401, etc).

That is a seperate employer / employee compensation issue.

Second of all: appears the legislation (no details specified...and the Devil is in the dedtails) would allow PBGC to "not have to" go begging to Congress in the event the airline pension collapse runs PBGC dry of money. And if PBGC runs out of money and can not ask for more....guess our PBGC "guaranteed" pension checks stop comming.

VERY BIG QUESTION MARK ON THIS ITEM.

 

[Wretched Wrench]

Pension help for US airlines proposed


The bill also limits the liability of the US Pension Benefit Guaranty Corp., which may have to seek a federal bailout if more airlines terminate their pension plans in bankruptcy, as United Airlines has said it will do.

Now, that's scary.

Any details?