RETIREMENT

[767 mechanic]

Did anybody get to read the article in the star-telegram under skytalk? I would post it,but I am having some problems with the link. The just of it saying that Brundage is misleading (lieing through his teeth) the employees about the pentions and by telling them that they will get everthing that they are owed. Lets see if you are scheduled to get $2000 and you are redy retired at lets say 55 and you are now 60. The PBGC takes over and guess what he hammered due to fact that he didn't retire at 65. Lets say that is a 25% penalty. Now you are down to $1500. On top of that you are penalized 60% for AA being underfunded. Now you are down another $900 so you are down to $600 for retirement and you are going to lose your retirement health ins. Where are you at now for your retirement? I will tell you where Hi welcome to Walmart. Thanks alot AA and twu for lieing to all of us and for asking the members to lobby congress in 2007 to allow aa to underfund our pensions. Can you say DFR.

 

[DNTULSA]

AA upper management will not lose or suffer a cut to their pensions.

It must be wonderful to not have any resposibility for your actions.

I guess that's why those in upper management would sell their mothers to a brothel to obtain an executive position!

 

[767 mechanic]

Where would we be right now if in 2003 we would have accepted a matching 401? How much can AA match? Well about 2 years ago the company offered the pilots 12% match. Would that be acceptable to everyboby? I would think so.

 

[FWAAA]

Did anybody get to read the article in the star-telegram under skytalk? I would post it,but I am having some problems with the link. The just of it saying that Brundage is misleading (lieing through his teeth) the employees about the pentions and by telling them that they will get everthing that they are owed. Lets see if you are scheduled to get $2000 and you are redy retired at lets say 55 and you are now 60. The PBGC takes over and guess what he hammered due to fact that he didn't retire at 65. Lets say that is a 25% penalty. Now you are down to $1500. On top of that you are penalized 60% for AA being underfunded. Now you are down another $900 so you are down to $600 for retirement and you are going to lose your retirement health ins. Where are you at now for your retirement? I will tell you where Hi welcome to Walmart. Thanks alot AA and twu for lieing to all of us and for asking the members to lobby congress in 2007 to allow aa to underfund our pensions. Can you say DFR.

You are sadly mistaken. I blame your union for not educating you over the past nine years on this important issue.

The hypothetical retiree in your example who has already retired and is due a pension of $2,000/mo will receive the entire $2,000 from the PBGC regardless of whether they elected a single life annuity or a joint & survivor annuity, as the applicable age is 60. If you're already in pay status, your age during 2011 is what matters. Here's a link to the tables:

http://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee.html

The maximum for 2011 (the applicable table since AA terminated the plan in 2011) is $2925/mo for single life or $2,632.50 for a joint & survivor annuity. Your hypothetical retiree will get their entire pension even if terminated and handed over to the PBGC, Emily Litella.

You're not alone in not understanding how this works. Like I said earlier, I blame your union for allowing you to think that the company actually held something over your head with the pensions. Not surprising that your union doesn't bother to educate its members - just look at the numerous errors in understanding displayed by the president of the NYC local.

 

[strikeforce]

You are sadly mistaken. I blame your union for not educating you over the past nine years on this important issue.

The hypothetical retiree in your example who has already retired and is due a pension of $2,000/mo will receive the entire $2,000 from the PBGC regardless of whether they elected a single life annuity or a joint & survivor annuity, as the applicable age is 60. If you're already in pay status, your age during 2011 is what matters. Here's a link to the tables:

http://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee.html

The maximum for 2011 (the applicable table since AA terminated the plan in 2011) is $2925/mo for single life or $2,632.50 for a joint & survivor annuity. Your hypothetical retiree will get their entire pension even if terminated and handed over to the PBGC, Emily Litella.

You're not alone in not understanding how this works. Like I said earlier, I blame your union for allowing you to think that the company actually held something over your head with the pensions. Not surprising that your union doesn't bother to educate its members - just look at the numerous errors in understanding displayed by the president of the NYC local.

I certainly don't want to break your bubble but the other day I checked my pension benefits and using a hypothetical date when I turn 65 being only 46 right now....I would get approx. $3200 if the pensions stay intact.....with the PBGC I would get approx $1200. $24K per year difference, and 240K if I live to 75. That's huge!!

 

[767 mechanic]

AA upper management will not lose or suffer a cut to their pensions.

It must be wonderful to not have any resposibility for your actions.

I guess that's why those in upper management would sell their mothers to a brothel to obtain an executive position!

You are correct upper management will not lose there pensions. Even if they want to make a good public showing and take there pensions now,they will make up for them down the road by giving it back to them after everything has blown over. Remember the serp that was protected back in 2003 and after we found out about it jim little said without further ratafication he accepted the concessions on our behalf because he had to protect us from ourselves. I wonder how many of the yes voters in 2003 would change there minds know. The bottom is that this sort of crap should be criminal and people in upper management should go to jail. Can you say Enron. It was not to long ago that the company and the twu were telling people that we were almost 100% funded? What a joke this company is!!!!!!!! I think I read on this forum that in 2007 we were 100% funded in our pension. Either this person was very misguided or somebody lost over $10 billion in the last 4 years. Hey anybody want to take a bet on whether this person got a raise or promotion or both.

 

[FWAAA]

I noticed on the Brundage Q&A that when they talk about the $3 billion put in the pensions they dont say "defined Benefit pensions", so more than likely the figure includes both the DB the DC plans.

Nope, that's not correct.

AA's defined contribution plan expenses are not included in the almost $3 billion contributed to the DB plans. The numbers are clearly shown in each year's 10-K. For example, in 2010, AA contributed $466 million to the DB pension trusts and also spent an additional $168 million for the DC plans (primarily the pilot B plan, which is 11%). For other employees, the maximum match is 5.5%.

The 2007 law reduced the 2010 contribution from $525 million to approx $460 million.

 

[FWAAA]

I certainly don't want to break your bubble but the other day I checked my pension benefits and using a hypothetical date when I turn 65 being only 46 right now....I would get approx. $3200 if the pensions stay intact.....with the PBGC I would get approx $1200. $24K per year difference, and 240K if I live to 75. That's huge!!

You're not breaking my bubble, you're demonstrating that you are confusing accrued (earned) pension benefits (what you've already earned) with your projected pension if the pensions remained and you stayed with AA until retirement age. Since you're only 46, your accrued benefits (what you'd get at 60 or 65 if you quit today) are very small compared to what they would be if things did not change. But if the pension is terminated, you will get every dime you're owed when you turn 60 or 65. Of course it won't be as big as you had hoped. Your example is different from the one posed by 767 mechanic. He was concerned that the earned benefit would be cut (like the pilots' A plan will be whacked). Between 46 and 60 or 65, the replacement defined contribution plan might help make up for your smaller-than-projected pension checks.

 

[767 mechanic]

You are sadly mistaken. I blame your union for not educating you over the past nine years on this important issue.

The hypothetical retiree in your example who has already retired and is due a pension of $2,000/mo will receive the entire $2,000 from the PBGC regardless of whether they elected a single life annuity or a joint & survivor annuity, as the applicable age is 60. If you're already in pay status, your age during 2011 is what matters. Here's a link to the tables:

http://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee.html

The maximum for 2011 (the applicable table since AA terminated the plan in 2011) is $2925/mo for single life or $2,632.50 for a joint & survivor annuity. Your hypothetical retiree will get their entire pension even if terminated and handed over to the PBGC, Emily Litella.

You're not alone in not understanding how this works. Like I said earlier, I blame your union for allowing you to think that the company actually held something over your head with the pensions. Not surprising that your union doesn't bother to educate its members - just look at the numerous errors in understanding displayed by the president of the NYC local.

If you think that the PBGC is going to make up the difference in $10 billion you are nuts. The only way that is going to happen is if the taxpayers pick up the bill and that is not going to happen. As far as blaming my union I have to agree with,but I will have to warn you don't make me have to claim that piece of crap union again. Ha Ha !!!!!!!!! Just because I am forced to pay dues to this communist union does not mean that I believe in it or anypart of it. I want to get rid of it as bad as anybody on the property.

 

[strikeforce]

You are correct upper management will not lose there pensions. Even if they want to make a good public showing and take there pensions now,they will make up for them down the road by giving it back to them after everything has blown over. Remember the serp that was protected back in 2003 and after we found out about it jim little said without further ratafication he accepted the concessions on our behalf because he had to protect us from ourselves. I wonder how many of the yes voters in 2003 would change there minds know. The bottom is that this sort of crap should be criminal and people in upper management should go to jail. Can you say Enron. It was not to long ago that the company and the twu were telling people that we were almost 100% funded? What a joke this company is!!!!!!!! I think I read on this forum that in 2007 we were 100% funded in our pension. Either this person was very misguided or somebody lost over $10 billion in the last 4 years. Hey anybody want to take a bet on whether this person got a raise or promotion or both.

I'm a betting man......and although I can't prove it because the money is hidden along with Romney's millions in the cayman's, but someone can't tell me that AA didn't hand Sonny Hall or Jim Little a suitcase full of cash when the 4 senators from North Texas met with the union and Carty, and if you remember the outcome.....6 to 5 year deal, and 448 shares of AMR stock in exchange for allowing concessionary contract to go through. I remember that like it happened yesterday. And, if you remember it was the UNION that sold us that POS.....saying it would be worse in BK. The TWU sold us out then and they're going to pull some stunt come Wednesday.....you watch!

I predict:

1. Phone vote.....press 1 for yes and 2 for yes.
2. 30% pay cut for anyone that remains, and for 10 years.
3. TWU dues increase 50%.
4. AA management bonuses for 10 years
5. No holidays, vacation or overtime pay
6. CS policy.....one for one. No doubles.

 

[767 mechanic]

I'm a betting man......and although I can't prove it because the money is hidden along with Romney's millions in the cayman's, but someone can't tell me that AA didn't hand Sonny Hall or Jim Little a suitcase full of cash when the 4 senators from North Texas met with the union and Carty, and if you remember the outcome.....6 to 5 year deal, and 448 shares of AMR stock in exchange for allowing concessionary contract to go through. I remember that like it happened yesterday. And, if you remember it was the UNION that sold us that POS.....saying it would be worse in BK. The TWU sold us out then and they're going to pull some stunt come Wednesday.....you watch!

I predict:

1. Phone vote.....press 1 for yes and 2 for yes.
2. 30% pay cut for anyone that remains, and for 10 years.
3. TWU dues increase 50%.
4. AA management bonuses for 10 years
5. No holidays, vacation or overtime pay
6. CS policy.....one for one. No doubles.

Come on no faith in the int. Well !!!!!!!!!! I would have to agree with you. Tell you truth I don't have any faith in management either. I read the 92 page court doc and saw where AA took 4.1 billion in annual concessions overall in 2003. If they could not manage to turn this company around with that kind of savings we are screwed stick a fork in us,but before we get stuck with the fork give the ivory tower a bonus.

 

[BoeingBoy]

If you think that the PBGC is going to make up the difference in $10 billion you are nuts.

While I don't think FWAAA is nuts, the PBGC isn't going to make up the $10 billion either. That $10 billion (or whatever the actual number is) represents the unfunded liability if the DB pensions were maintained intact. With a termination, the DB plans won't be maintained intact, so the PBGC only has to make up the difference between benefits already earned and the amount of funds in the plan. The PBGC will also get the return on investing those funds already in the DB plans less what they pay out in current benefits plus, in a termination, a rather large amount of stock in AA when it emerges from bankruptcy.

Jim

 

[strikeforce]

Come on no faith in the int. Well !!!!!!!!!! I would have to agree with you. Tell you truth I don't have any faith in management either. I read the 92 page court doc and saw where AA took 4.1 billion in annual concessions overall in 2003. If they could not manage to turn this company around with that kind of savings we are screwed stick a fork in us,but before we get stuck with the fork give the ivory tower a bonus.

TWU Ivory tower or Centrepork......oh, both!!!! They need the money more than we do, that's right!

 

[WorldTraveler]

The potential exposure by the PBGC is indeed in the billions of dollars which is why they will become a major creditor in AMR's BK case... but assumptions about the benefits a person would have received had the plans continued are not accurate.... BK provides the opportunity to change the social contract between AA and its employees.

.
Just a point of contrast and yet another means by which DL could assert itself as a merger partner if it chose to do so.... on DL's earnings call (transcript available on seeking alpha), DL mgmt said that they would consider accelerating funding of their pension obligations INSTEAD OF buying new aircraft in the next 2-3 years when DL's debt levels are reduced to levels the company considers acceptable for an airline of DL's size.

 

[Wretched Wrench]

Here's a link to the tables:

http://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee.html

The maximum for 2011 (the applicable table since AA terminated the plan in 2011) is $2925/mo for single life or $2,632.50 for a joint & survivor annuity. Your hypothetical retiree will get their entire pension even if terminated and handed over to the PBGC...

Are we looking at different charts? Your numbers are a little low.

The way I read the PBGC chart is that the maximums are $4,653.41 straight life and $4,188.07 j&s if the plan is terminated in 2012 and $4,500.00 and $4,050.00, respectively, if the plan had been terminated in 2011.

.BTW, what plan was terminated in 2011?.