FlyingHippie
Senior
- Jan 27, 2003
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This really sucks for us, but not everyone else!
U.S. Senate Approves Pension Plan Relief Backed by ALPA
In a major victory for ALPA members, the U.S. Senate amended and passed H.R. 3108, The Pension Funding Equity Act on Wednesday, January 28, 2004. The 86-9 vote in favor of the legislation was overwhelmingly bipartisan, with 41 Republicans, 44 Democrats, and 1 Independent voting for the bill. The pension relief bill will help ailing airlines and some steel companies meet their pension liabilities without having to seek bankruptcy or shifting their retirees' benefit payments to the Pension Benefit Guaranty Corporation.
ALPA's president, Capt. Duane Woerth hailed Senate passage of the bill as a major victory for ALPA members. "This fair and necessary legislation will give U.S. airlines the relief they need to sustain their economic viability, help save many airline workers' retirement benefits, and protect thousands of jobs," Woerth said.
As passed by the Senate, the bill would:
* temporarily replace the discontinued 30-year Treasury bond interest rate used to calculate contribution levels of defined benefit plans with a rate based on a composite of long-term corporate bonds; this new rate would be used in 2004 and 2005 but will not apply to lump sum distributions, which will still use the 30-year Treasury rate;
* give airlines and steel companies relief from the Deficit Reduction Contribution (DRC) payments currently required if the funded level of their defined benefits plans generally falls below 80 percent; the amount of the relief would be 80 percent of the additional amount required under the DRC in 2004 and 60 percent of the additional amount required under the DRC in 2005, and to be eligible for this relief, a plan must not have been subject to the DRC in 2000;
* give multi-employer pension plans two years of funding relief, however, no airline plans fall into this category.
Senator Arlen Specter (R-PA) failed in an attempt to add an amendment to restore the terminated defined benefit plan of the US Airways pilots. No roll call vote was taken on the Specter amendment. Unfortunately, the procedures previously agreed to under Senate rules did not allow for a roll call vote on this amendment, preventing it from being added to H.R. 3108. ALPA is obviously extremely disappointed that H.R. 3108 does not include restoration of the US Airways plan.
While ALPA is obviously disappointed that H.R. 3108 does not include restoration of the US Airways plan, we are very pleased with the action taken by the Senate on DRC relief. Numerous ALPA officers, pilots and staff have been part of a massive bipartisan effort working on this issue since early last year. Our goal is to prevent airlines from being put in a position of having to terminate their defined benefit plans because they do not have the cash available to make the DRC payments.
H.R. 3108 must now go to a conference committee between the House and the Senate to reconcile the differences between the two versions of the bill. (The House adopted its version of H.R. 3108 on October 8, 2003.) Although the Administration has signaled its strong opposition to the DRC provision, ALPA will continue to work full-time to ensure that meaningful DRC relief is included in the final agreement. We will keep you apprised of the status of the bill as it moves through the approval process.
U.S. Senate Approves Pension Plan Relief Backed by ALPA
In a major victory for ALPA members, the U.S. Senate amended and passed H.R. 3108, The Pension Funding Equity Act on Wednesday, January 28, 2004. The 86-9 vote in favor of the legislation was overwhelmingly bipartisan, with 41 Republicans, 44 Democrats, and 1 Independent voting for the bill. The pension relief bill will help ailing airlines and some steel companies meet their pension liabilities without having to seek bankruptcy or shifting their retirees' benefit payments to the Pension Benefit Guaranty Corporation.
ALPA's president, Capt. Duane Woerth hailed Senate passage of the bill as a major victory for ALPA members. "This fair and necessary legislation will give U.S. airlines the relief they need to sustain their economic viability, help save many airline workers' retirement benefits, and protect thousands of jobs," Woerth said.
As passed by the Senate, the bill would:
* temporarily replace the discontinued 30-year Treasury bond interest rate used to calculate contribution levels of defined benefit plans with a rate based on a composite of long-term corporate bonds; this new rate would be used in 2004 and 2005 but will not apply to lump sum distributions, which will still use the 30-year Treasury rate;
* give airlines and steel companies relief from the Deficit Reduction Contribution (DRC) payments currently required if the funded level of their defined benefits plans generally falls below 80 percent; the amount of the relief would be 80 percent of the additional amount required under the DRC in 2004 and 60 percent of the additional amount required under the DRC in 2005, and to be eligible for this relief, a plan must not have been subject to the DRC in 2000;
* give multi-employer pension plans two years of funding relief, however, no airline plans fall into this category.
Senator Arlen Specter (R-PA) failed in an attempt to add an amendment to restore the terminated defined benefit plan of the US Airways pilots. No roll call vote was taken on the Specter amendment. Unfortunately, the procedures previously agreed to under Senate rules did not allow for a roll call vote on this amendment, preventing it from being added to H.R. 3108. ALPA is obviously extremely disappointed that H.R. 3108 does not include restoration of the US Airways plan.
While ALPA is obviously disappointed that H.R. 3108 does not include restoration of the US Airways plan, we are very pleased with the action taken by the Senate on DRC relief. Numerous ALPA officers, pilots and staff have been part of a massive bipartisan effort working on this issue since early last year. Our goal is to prevent airlines from being put in a position of having to terminate their defined benefit plans because they do not have the cash available to make the DRC payments.
H.R. 3108 must now go to a conference committee between the House and the Senate to reconcile the differences between the two versions of the bill. (The House adopted its version of H.R. 3108 on October 8, 2003.) Although the Administration has signaled its strong opposition to the DRC provision, ALPA will continue to work full-time to ensure that meaningful DRC relief is included in the final agreement. We will keep you apprised of the status of the bill as it moves through the approval process.
