TWU and IAM representation alliance vote

[WeAAsles]

 I think is you read the IAMNPF bylaws and such, that the Fudiciaries that are in the fund have to approve a new entrant...can't imagine them approvong a BK / frozen pension from a BK Airline.....
 
BTW bob i totally agree with you but the key words are " SHOULD HAVE ", but it wasn't.......

Bob is just engaging in a fear tactic against the association when it comes to this pension issue he wants to dream up. According to the PBGC during the AA BK the company was 10 Billion underfunded on their liabilities to the plans. The Company was stating that shortfall to be 5 billion? So let's be fair and say it's 7 billion? Of course those liabilities are spread out among everyone in the company and an individual workgroup assessment would be difficult to gauge without having the company numbers? So let's assume that our underfunding is 2 Billion or so. As you basically said Mike the administrators have a fuduciary responsibility to protect the plan for ALL participants. Does anyone really believe that ALL participants in the IAMPF are going to accept an underfunded pension and take on the liabilities of that underfunding that our company is required by LAW to make whole? Really?

There are many issues that he has legitimate concerns about when it comes to the Association and he certainly can be vocal about them. This one is grasping at some serious straws though.

 

[WeAAsles]

Good post, and you are correct.
 
I can think of only three things that could happen to AA's frozen pensions. 
 
The first is the company comes up with the money and funds the pension.

They're doing that now but they are not going to reactivate the plan.


The second is the pension stays frozen.

Yes and the pension will be funded and remain until we draw on it in retirement.

And the third is the company terminates the pension and it goes to the PBGC just like ours.

Baring any major catastrophe such as Putin initiating WW3 I doubt our pension will fall into PBGC hands now. AA was already denied that ability.
 
But the one place it won't go, and you are correct, is to fund the IAMNPF.  It just doesn't work that way.  If anyone from AA is to be in the IAMNPF, that money will come from somewhere else, such as your 401K match money.

I agree.

 

 

[WeAAsles]

Besides talking about debt and aircraft purchases, American said it plans to do more for its employees by making supplemental contributions of $600 million to its defined benefit plans in 2014. These contributions would be above and beyond the $120 million minimum required contributions for the year.

http://www.star-telegram.com/2014/07/24/5992882/american-airlines-boost-profit.html

 

 

[FWAAA]

Besides talking about debt and aircraft purchases, American said it plans to do more for its employees by making supplemental contributions of $600 million to its defined benefit plans in 2014. These contributions would be above and beyond the $120 million minimum required contributions for the year.
 
http://www.star-telegram.com/2014/07/24/5992882/american-airlines-boost-profit.html

You keep telling yourself (and any uneducated fellow employees who will listen) that the above is a good thing for AA's employees.    Parker says "American plans to do more for its employees" and the ignorant buy it;   hook, line and sinker.    No wonder AA's ground employees have industry-lagging wages and benefits.
     
That $600 million is money that won't be available to increase your wages and benefits. 

 

[WeAAsles]

You keep telling yourself (and any uneducated fellow employees who will listen) that the above is a good thing for AA's employees.    Parker says "American plans to do more for its employees" and the ignorant buy it;   hook, line and sinker.    No wonder AA's ground employees have industry-lagging wages and benefits.
     
That $600 million is money that won't be available to increase your wages and benefits. 

Really? You do know that the extra pension contributions were made on behalf of ALL those in the pension plan right?

But the longer we wait and putz around, the longer it's going to take to get in their and capture gains. 

Of note:

  "Should the T/A fail a ratification vote, the economic terms of our contract (wages, premiums, sick, vacation, medical and 401(k)) will be decided in final and binding arbitration. As the Negotiations Protocol Agreement states, the arbitration panel will be required to establish a contract that is at least equal in value to the current LUS and LAA CBAs – “the floor” – and is market-based in the aggregate (defined by United, Continental, and Delta) – “the ceiling.” To reach the ceiling, the current combined costs of the LAA and LUS contracts would have to be increased by $111 million. The total value of the T/A is $193 million.   The difference - $82 million – is the negotiated premium above what could be achieved in arbitration."
https://www.apfa.org/images/negotiations/Tentative-Agreement-Highlights-092414.pdf



 

 

[Glenn Quagmire]

What would happen if the IAM filed for bankruptcy or defaulted on the pension?

 

[700UW]

The IAM is not the IAMNPF.
 
Two total and separate entities, the PBGC would step in, they back the IAMPF as its a DBP, unlike a 401k which has NO safeguards.

 

[swamt]

What would happen if the IAM filed for bankruptcy or defaulted on the pension?

Nice question.  But do not expect the answer...

 

[MetalMover]

You keep telling yourself (and any uneducated fellow employees who will listen) that the above is a good thing for AA's employees.    Parker says "American plans to do more for its employees" and the ignorant buy it;   hook, line and sinker.    No wonder AA's ground employees have industry-lagging wages and benefits.
     
That $600 million is money that won't be available to increase your wages and benefits. 

Why not? The TWU has been bragging how good we have had it under their watch for decades....Which the TWU supporters have been buying hook, line, and sinker!

 

[Bob Owens]

Bob is just engaging in a fear tactic against the association when it comes to this pension issue he wants to dream up.
There are many issues that he has legitimate concerns about when it comes to the Association and he certainly can be vocal about them. This one is grasping at some serious straws though.

The question was simple, show us the law that would prevent the Alliance from negotiating a deal to roll our pension, and all the funds backing it, into the IAMPF. You said it can't happen, well what did you base that on?

Wasn't it said that should we roll into their plan that we would not have to wait five years to be vested? Well sure, we won't have to wait because we will get the years credited under the AA plan and they will get the funds.

The way I see it just the fact that we can't retire without penalty till 65 under the IAMPF vs 60 under the AA plan, plus the IAMPF exacts a larger penalty to retire prior 65 than the AA plan does prior to 55 (five years older) means that the shortfall on what the AA pension is short would be considerably reduced because it means that a lot of people would start collecting 10 years later under the IAMPF than the current AA plan and the expectation would be that they would collect much, much less over their lives.


The fact is the IAMPF could see hundreds of millions of dollars added to it at our expense and I am very concerned about that, to be clear, I know what we will get with the AA plan, even if it ended up in the PBGC, but we can't be sure of what will happen if we get stuck in the IAMPF except we will be trapped at AA till 65 instead of 60. Forget about the option of leaving AA at 55 and going somewhere else because they would take away your pension. Lets face it we are talking about putting our retirement with a Union that eight years after US leaving BK the best they could do is get pay rates equal, not to non union Delta, or UAL, (don't even think about WN, Fed Ex or UPS) but fresh out of BK AA, and not even get profit sharing!!! The fact is the $2/hr that they negotiated is less than the 5.5% 401k match, especially when you factor in the 12% overtime, and as the wage increases the gap increases. Its a concession where hard cash is replaced with a conditional promise, a promise that the IAMPF will provide you a pension but only if you stay with the IAM and their bottom of the industry contracts for the rest of your career. To insure thats the case they have the clause that bans you from working.

Management simply couldn't ask for a better deal for management than the IAMPF, throw in $2/hr, but only for the base 2080 hours, so OT hours are cost free as far as the pension, the more OT the more they save, saving millions more, they end up with a captive workforce that no matter how poorly they treat them can't leave the company, or the Union that negotiates bottom of the industry contracts with no profit sharing. They can't leave for better employers, what company wouldn't love such a plan.

The IAMPF is good for the IAM, not so good for us.

 

[ThirdSeatHero]

The question was simple, show us the law that would prevent the Alliance from negotiating a deal to roll our pension, and all the funds backing it, into the IAMPF. You said it can't happen, well what did you base that on?

The way I see it just the fact that we can't retire till at least 60, plus the IAMPF exacts a larger penalty to retire five years older means that the shortfall on what the AA pension is short would be considerably reduced because it means that a lot of people would start collecting 10 years later under the IAMPF than the current AA plan.

The fact is the IAMPF would see hundreds of millions of dollars added to it and I am very concerned about that, to be clear, I know what we will get with the AA plan, even if it ended up in the PBGC, but we can't be sure of what will happen if we get stuck in the IAMPF. Lets face it we are talking about a Union that eight years after US leaving BK the best they could do is get pay rates equal not to no union Delta, or UAL but fresh out of BK AA, and not even get profit sharing. The fact is the $2/hr that they negotiated is less than the 5.5% 401k match that doesn't carry any restrictions. The IAMPF is good for the IAM, not so good for us.

 
I would also add to this, that your stand alone AA pension plan is insured by the PBGC at a higher rate than the multiemployer IAMPF.  If both were to fail, you'd be paid more by the PBGC failing under the stand alone AA plan.

 

[WeAAsles]

The question was simple, show us the law that would prevent the Alliance from negotiating a deal to roll our pension, and all the funds backing it, into the IAMPF. You said it can't happen, well what did you base that on?

Alright even though I'm not an elected official just to try and dispel this idea once and for all I contacted the PBGC today. I spoke to a lady who was of course not able to answer my question but she did put me in touch with someone who probably could? I left a message on that man's answering machine and will try to get in touch with him again next week.

You could make that call too you know Bob.

Wasn't it said that should we roll into their plan that we would not have to wait five years to be vested? Well sure, we won't have to wait because we will get the years credited under the AA plan and they will get the funds.

Roll or Entered?

The way I see it just the fact that we can't retire without penalty till 65 under the IAMPF vs 60 under the AA plan, plus the IAMPF exacts a larger penalty to retire prior 65 than the AA plan does prior to 55 (five years older) means that the shortfall on what the AA pension is short would be considerably reduced because it means that a lot of people would start collecting 10 years later under the IAMPF than the current AA plan and the expectation would be that they would collect much, much less over their lives.

Another reason why I support the "choice" of entering the Pension or keeping my 401k match? Either way I'm still going to be contributing 25% to my 401 for my last 10 years.


The fact is the IAMPF could see hundreds of millions of dollars added to it at our expense and I am very concerned about that, to be clear, I know what we will get with the AA plan, even if it ended up in the PBGC, but we can't be sure of what will happen if we get stuck in the IAMPF except we will be trapped at AA till 65 instead of 60. Forget about the option of leaving AA at 55 and going somewhere else because they would take away your pension. Lets face it we are talking about putting our retirement with a Union that eight years after US leaving BK the best they could do is get pay rates equal, not to non union Delta, or UAL, (don't even think about WN, Fed Ex or UPS) but fresh out of BK AA, and not even get profit sharing!!! The fact is the $2/hr that they negotiated is less than the 5.5% 401k match, especially when you factor in the 12% overtime, and as the wage increases the gap increases. Its a concession where hard cash is replaced with a conditional promise, a promise that the IAMPF will provide you a pension but only if you stay with the IAM and their bottom of the industry contracts for the rest of your career. To insure thats the case they have the clause that bans you from working.

True, with some stipulations.

http://mypension.iamnpf.org/media/74774/SMM_Aug_2014and_Cover_ltr.pdf


Management simply couldn't ask for a better deal for management than the IAMPF, throw in $2/hr, but only for the base 2080 hours, so OT hours are cost free as far as the pension, the more OT the more they save, saving millions more, they end up with a captive workforce that no matter how poorly they treat them can't leave the company, or the Union that negotiates bottom of the industry contracts with no profit sharing. They can't leave for better employers, what company wouldn't love such a plan.

So everyone down from the company, the unions, the negotiators and the members who are the ultimate decider are in collusion to place you into indentured servitude?

The IAMPF is good for the IAM, not so good for us.

Given the choice between the two options as they are currently I would more than likely chose to remain with the 401k match myself.

Bob how do you rectify the disparities? Our pension is underfunded to the tune of Billions and again I'm going to ask you and yes this is in the law, don't the administrators of the IAMPF have a fiduciary responsibility to the plan participants? (see the link below as to why the payouts needed to be lowered) If they took our pension as is with it's current underfunding they would be required by law to cut benefits once again to remain in the "Green Zone" status.

How do you rectify the difference in the multipliers? Ours was a 6.25% multiplier. What is the IAMPF multiplier? I believe it's less so if they took it over they would have to give us more than is being given to current participants after the cuts, (It was more prior to the law change)

Another thing. The company went through Bankruptcy and came to an agreement with the PBGC to freeze the pension. The entire details of that agreement I could not find in the court documents but I'm sure that there is a very detailed agreement between the two parties that would not allow AA to place it at risk? Wouldn't we both like to try and find that agreement?

The IAM did try to convince the Continental employees to FREEZE their CARP plan but that was refused twice and even the United Executives defended the CARP that it was solvent. I guess AA won't do that though because they want indentured mechanics? Oh and that's a currently "active plan", not an already frozen one.
 

"Continental Flight Attendants currently participate in the Continental Airlines Retirement Plan (CARP), which provides a measure of security for their retirement.
 
For over five years the Machinists have been trying to influence their current Members into believing that the CARP must be frozen and the IAM National Pension Plan is the right and only answer for the combined workgroup. Twice Continental Flight Attendants have rejected this notion, and the fact is there is no reason the CARP should not survive this merger. United has testified before Congress the viability of the Plan, and no other work group at Continental who belongs to this Plan is even talking about it, let alone trying to convince it's Members about the need to freeze it.
 
We know firsthand the devastation associated with a retirement plan being frozen or terminated.
The right thing to do is to fight to maintain this Plan for the benefit of Continental Flight Attendants now and to provide an option for all Flight Attendants in the combined workforce when we engage in Single Contract Negotiations."

http://unitedafa.org/news/details.aspx?id=6199

Bob if and or when I find out more information from the PBGC I'll post it. I really wish you or Bob Peterson would do this though since you guys are the one's representing your members and not me.

http://www.dol.gov/EBSA/pensionreform.html

 

[WeAAsles]

 
I would also add to this, that your stand alone AA pension plan is insured by the PBGC at a higher rate than the multiemployer IAMPF.  If both were to fail, you'd be paid more by the PBGC failing under the stand alone AA plan.

This is 100% correct. The PBGC maximums for a multiemployer pension plan are horrible and that's why the 2006 law was enacted. To try to salvage the solvency of the PBGC which is also underfunded currently to the tune of about 30 Billion dollars. Very scary thought.

 

[chellow]

The PBGC does not takeover multiemployer plans if they fail, like it was stated by some post here, they just may give the plan some loans with conditions of benefit cut. http://www.pensionrights.org/publications/fact-sheet/facts-about-multiemployer-pension-plan-funding

 

[WeAAsles]

The PBGC does not takeover multiemployer plans if they fail, like it was stated by some post here, they just may give the plan some loans with conditions of benefit cut. http://www.pensionrights.org/publications/fact-sheet/facts-about-multiemployer-pension-plan-funding

 
Underfunded multiemployer pension plans could negatively impact the Pension Benefit Guaranty Corporation’s multiemployer insurance fund.
 
A report by the Government Accountability Office in March 2013 found that while the most severely distressed multiemployer plans have taken significant steps to address their funding problems and most expected improved financial health, some did not.
 
The majority of underfunded plans took steps to alleviate the financial concerns of their plans, like asking employees to contribute more to their plans or reducing or eliminating benefits like disability.

http://www.benefitspro.com/2014/04/14/pbgc-could-go-down-due-to-underfunded-multiemploye

http://www.pbgc.gov/documents/pbgc-report-multiemployer-pension-plans.pdf