TWU Reaches TA with company!

[Birdman]

Right now all these funds are sitting in a Trust so they are protected in BK. We would be pulling out all current employees from the fund by agreeing to this and giving the company half the money thats in our accounts.

Where would one find a record of the trust and the present contents? It's ironic that the same manAAgement team that has a moral dilemma with filing bankruptcy would find it appropriate to raid a trust fund outside of bankruptcy. Also ironic is the lack of outrage from the TWU minions who frequent these discussions.

 

[Bob Owens]

Where would one find a record of the trust and the present contents? It's ironic that the same manAAgement team that has a moral dilemma with filing bankruptcy would find it appropriate to raid a trust fund outside of bankruptcy. Also ironic is the lack of outrage from the TWU minions who frequent these discussions.

JP Morgan. However it's not accessible through our pension link or online, you have to call them at 1-800-345-2345, log in then dial zero and tell them you are looking for the balance of your Retiree Medical Prefunding account. They will either call or e-mail you the quote in 5 to 7 business days.

I share your sentiment and I'm also curious as to why our International is pretty much silent about this. I'm bewildered by the press release from the International on the Fleet TA as well. They are selling it as a four year deal with a 9 % increase when in fact it's a seven and a half year deal where they are agreeing to turn over around $5000 per man to the company from a BK protected trust fund.
The fleet deal is a 0-0-0-0-3dos-2-2-2 offer. The lump sum signing bonus is less than what they are giving back from the trust fund and they are losing at least 1200 guys.
It's much worse than what we turned down a year ago.

 

[eolesen]

The current agreement states that if the company unilterally terminates the plan they refund both our contributions plus interest and the matching contributions from the company plus interest. If we leave the company on our own or decide to no longer contribute to the plan we forfiet the matching contributions and interest experience.

The company proposal is for the union to agree to terminate payments to the fund, only return Employee Contributions plus interest experience and the company gets to keep all the matching funds which they will use to continue to provide coverage to all current retirees.\

Bob, I read the letter you forwarded from HR, and it says the company's contributions are returned if retiree plan is terminated.

As I'm reading the overview of the TA, there's a pretty good argument to be made that the retiree plan isn't actually being terminated.

The company is still offering retiree coverage at the lower "value plan" rate:

Retiree health care: Benefits are unchanged for current retirees. Current employees who retire within three months following ratification will continue to participate in the existing pre-funding retiree health plan. Employees who retire after that date will have their pre-funded retiree health care contribution returned, and will pay the Value health plan premium (employee only rate) per person per month for retiree healthcare coverage.

Since it is still all in a trust, it's pretty easy for them to argue that their contributions and interest are going to be applied towards subsidizing the "value plan" coverage costs.

Unless there's more complete language sitting somewhere else, the side letter clause you're invoking is targeted specifically at termination of retiree health care, not modification or substitution. I don't think it would wind up in your favor in an arbitration.

I know, it sounds like pro-management spin, but the devil really is in the details.

And, once again, it looks like you might have been caught again by the trap of not having adequately trained people negotiating your contract language.

There's a joke about why divorce is so expensive ("Because it's worth it"). I know I'm beating a dead horse, but having a competent lawyer makes all the difference years from now when you need to revisit something... The same is true about contract negotiations.

 

[Bob Owens]

Bob, I read the letter you forwarded from HR, and it says the company's contributions are returned if retiree plan is terminated.

As I'm reading the overview of the TA, there's a pretty good argument to be made that the retiree plan isn't actually being terminated.

The company is still offering retiree coverage at the lower "value plan" rate:

Since it is still all in a trust, it's pretty easy for them to argue that their contributions and interest are going to be applied towards subsidizing the "value plan" coverage costs.

Unless there's more complete language sitting somewhere else, the side letter clause you're invoking is targeted specifically at termination of retiree health care, not modification or substitution. I don't think it would wind up in your favor in an arbitration.

I know, it sounds like pro-management spin, but the devil really is in the details.

And, once again, it looks like you might have been caught again by the trap of not having adequately trained people negotiating your contract language.

There's a joke about why divorce is so expensive ("Because it's worth it"). I know I'm beating a dead horse, but having a competent lawyer makes all the difference years from now when you need to revisit something... The same is true about contract negotiations.

You need to read the Trust agreement Sect 6.03 and the associated letters and MOU at www.twu562.org.
The language was written by lawyers , not mechanics. The company is talking about terminating the Retiree Prefunded Benefits Program, terminatiing our participation in the trust by refunding our contributions to us and using our matching funds to pay current retiree benefits. They cant do that unilaterally, we each have our own accounts, we have to agree to it.

Got the numbers on my account, $6524.19 x 2=$13048.38

I figure if we agree to this they get to keep $6524 of my money in a tax free account earmarked for benefits, thats $6524 that comes out of my pocket and goes into theirs and doesnt have to come from the General Fund while I get hammered with taxes and end up with around $3000 of the $13048.38 I have in there now. It would be my share of a $57 million dollar infusion of cash into AA from its employees plus they would get to write off the liability of of providing future retirees medical benefits. Agreeing to this would cost me $10,000 now and probably around $6000 a year when I retire. If I retire at 65 and live to 80 this concession would likely cost me around $100,000, if I retire early it would cost me even more than if I retired at 65.

 

[eolesen]

The tax impact depends on how it gets reinvested. If moved into a HSA, it is still tax exempt. Not sure if you could also move it into a 401K or not. It's also still not clear to me what becomes of HSA's in general if Obamacare isn't repealed.

 

[OldGuy@AA]

The best solution is for Fleet Service to vote no on the TA. The TWU is selling out your retirement!

 

[eolesen]

That's one way of looking at it, but the pessimist in me says they have some degree of control over what they lose now. They won't have that in front of a judge.

The way that the 2005 bankruptcy law changes were instituted, the company will need to argue that the current agreement threatens the economic stability of the company. It would seem to me that the company will have a much more difficult time trying to argue the agreement they just agreed to is creating a hardship.

When I'm negotiating a contract, we usually wind up at a point where we have to decide if 5% of something is better than 10% of nothing...

Voting "no" seems to me as holding out for 10% of nothing. It's no skin off my nose either way.

To paraphrase from the Airtran guys... the decision may be difficult, but the possible outcomes are clear.

 

[TWU informer]

That's one way of looking at it, but the pessimist in me says they have some degree of control over what they lose now. They won't have that in front of a judge.

The way that the 2005 bankruptcy law changes were instituted, the company will need to argue that the current agreement threatens the economic stability of the company. It would seem to me that the company will have a much more difficult time trying to argue the agreement they just agreed to is creating a hardship.

When I'm negotiating a contract, we usually wind up at a point where we have to decide if 5% of something is better than 10% of nothing...

Voting "no" seems to me as holding out for 10% of nothing. It's no skin off my nose either way.

To paraphrase from the Airtran guys... the decision may be difficult, but the possible outcomes are clear.

I agree with you "E"

But most I talk with have zero trust that AA management would not file BK on top of the Yes vote on the TA and still take more on top of this concession. And they sure fail to see that as a reason to vote YES. They just cannot see what you are talking about here and never will.

Arpey and his Gang of Consulting Firms have created such an unrecoverable huge lack of trust between Union Workers and Management that AA may as well begin working on the filing, if they have not already. Which I believe is already in full swing.

Unloading the Avantage Mile.
Spinning Off Eagle.
And the Reservations Debacle are all indicators of a direction towards filing in my view.
Either that or we are being led by a colossal dufus.

 

[eolesen]

To be fair, AA hasn't done anything with either AAdvantage. I really don't see them monetizing it at the risk of the revenue it generates.

 

[TWU informer]

To be fair, AA hasn't done anything with either AAdvantage. I really don't see them monetizing it at the risk of the revenue it generates.

My bad, I thought they were sold off.

 

[Bob Owens]

That's one way of looking at it, but the pessimist in me says they have some degree of control over what they lose now. They won't have that in front of a judge.

Huh? So you are saying that they should give up something that's protected in BK before going BK? That's about the dumbest thing I've ever read on this forum.

I have $13000 in my fund, $6500 from my pay over the last twenty years and $6500 in matching funds. This is part of my compensation and it was paid into my account monthly,its my money .What the company is looking for is for me to give them $6500 and in return I would have to buy retiree medical when I retire.in other words I'm getting nothing, I'm losing $6500 plus pre funded retiree medical.
If we tell the company to go pound salt I don't have to give them any of these funds. If the BK judge allows them to terminate the plan I get it all. So the choice is give the company half my account and pay for retiree medical when I retire or give them none of my account and I might have to pay for medical retiree coverage if they go BK, but I would have $13000 instead of just $6500 to buy it.

 

[FWAAA]

Wouldn't it be better to focus on how to increase your hourly pay to the neighborhood of, say, UPS/FedEx/WN instead of worrying about a retiree medical trust that may become irrelevant under Obummercare? How many are realistically going to retire before they turn 65 when Medicare takes over?

 

[Bob Owens]

Wouldn't it be better to focus on how to increase your hourly pay to the neighborhood of, say, UPS/FedEx/WN instead of worrying about a retiree medical trust that may become irrelevant under Obummercare? How many are realistically going to retire before they turn 65 when Medicare takes over?

Prefunding also covers mediigap isurance after 65. Still i would rather have$13000 in an HSA than $6500

 

[jimntx]

Huh? So you are saying that they should give up something that's protected in BK before going BK? That's about the dumbest thing I've ever read on this forum.

I have $13000 in my fund, $6500 from my pay over the last twenty years and $6500 in matching funds.

Bob, I know I sometimes appear just a bit cynical, but do we know for a fact that the company actually set aside the matching funds? Maybe that's some of their "un/under" funded pension obligations. It could be the reason they are so anxious to terminate the retiree medical.

And, if they did set aside the money, do we know that a bk court would give us even all of our money back, much less the company's contribution?

 

[Birdman]

Prefunding also covers mediigap isurance after 65. Still i would rather have$13000 in an HSA than $6500

$13,000 would go a long way in paying your primary Medicare premiums after retirement as well. For my parents that's about $180 a month apiece.