Overspeed said:
Bob,
Isn't the JCBA process the best opportunity to fix the items you believe are wrong?
No its the earliest opportunity, but we need to go in there as one Union, not some in one union and some in another and we definitely do not want the IAM taking the lead. We saw what kind of contract they can get out of Parker when the company is reporting billion dollar profits. We need to put Jim Littles Association aside and move in with one Union.
My biggest concern is through the Association the IAM will use our pension to fund a contract. I believe they want the hundreds of millions AA has stowed away for our pensions to bolster the IAMNPF.
Right now our pensions are at AA, due to the benefits we have where we can retire at 60 with no penalty and just a 1.5% penalty prior to 60 the capital requirements of our plan would be considerably higher than the IAMNPF where you get hit with a 4.8% penalty for each year prior to 65.
IIRC when the government pushed Social Security from 65 to 67 they in effect cut the pensions all those who would be affected by 13%. So cutting our retirement from 60 to 65 would be like cutting our pension by roughly 32.5%.
Lets say that currently the AA plan needs $1billion to be fully funded, well if we were moved into the IAM plan, all other things being equal they would only need around $675 million. $325 million simply vanishes off whats needed for the fund. If our fund was 85% funded they may get money back and get rid of $150 million in liability. The company would also save money by just contributing $2/hr for up to just 2080 hours even if the average number of hours worked is 3020.
Some may claim that there are laws protecting Early retiree pension benefits and they cant do this, both the IRS and ERISA address protecting Early retiree pension benefits, what can be missed is they are talking about people who are retired. Not people who are working. So if you are 55 and retired they cant come along and say, well now you have to be 65 (they cant push it past 65 either). But if you are 60 and still working it can be changed to 65. Early retiree benefits are considered a perk, not an essential part of the plan, actuarially it does not add or subtract value to the plan and the reason why you get less when you retire younger is because the assumption is you will still die at the age they used and what they are doing is spreading the same amount of money over a longer period of time. So if they take away our ability to retire early in theory the value of our pension has not changed -at 65. The formula will have remained the same but our ability to retire at 60 with full benefits would be gone. What you earned stays the same. Of course in reality it has changed because favorable assumptions were used to give us the ability to retire at 60 with no penalty or 55 with a 15% penalty vs 48% with the IAMNPF. Its a negotiated perk, not considered a part of the protected plan.
My concern is the members will buy into this because the savings will be used to buy us back things such as vacations, Holidays, higher hourly wages etc without actually costing AA a penny. The IAM side loses nothing, we would be paying for their raises and securing their pensions with ours. The Association will claim they got us Industry leading even though we will be the only workers in the industry that cant retire and work another job. AA benefits by trapping us all here that much longer and with the shortage of mechanics they will need to keep us here as long as they can. AA also makes out because they get to dump their pension liability and get the cheapest pension plan in the industry where no matter how many hours we work their pension cost is fixed and does not carry over, they have no liability, the IAMNPF takes on the liability.
