FL510GV
Junior Birdman
- Joined
- Dec 6, 2001
- Posts
- 154
This is going to affect the negotiation process. What to think?
From the ATW website:
ALPA concedes pilot pension plans must change
Dateline:**CENSORED** Monday September 06, 2004**CENSORED** **CENSORED****CENSORED****CENSORED**
The Air Line Pilots Assn. said Friday that it is "ready to help build a new pension model" for airline pilots, including making changes to existing plans for younger pilots while protecting the benefits of those closer to retirement.
The move comes as many US network airlines face huge pension funding gaps and one, US Airways, has terminated its pilot pension plan and replaced it with another. United Airlines is believed to be on the verge of terminating its plan, while Delta Air Lines could be next. Fear that this may occur has caused an exodus from Delta of senior pilots, who prefer early retirement and a smaller lump sum payout rather than having their pensions potentially reduced in a bankruptcy.
When a company terminates its pension plan, the US Pension Benefit Guaranty Corp. assumes only the insured portion of the plan. For pilots, the difference between a company pension and PBGC amounts can be tens of thousands of dollars each year. Although the situation at American Airlines is not as critical, pilots there are worried too.
In Friday's statement, ALPA President Duane Woerth said the organization is "extremely concerned about the future of defined-benefit pension plans for pilots unless we provide a method for the nation's already stressed air carriers to deal with their current unfunded pension obligations. Tens of thousands of pilots risk losing benefits they have earned."
According to Woerth, "the cornerstone of any solution to the pension crisis must be long-term amortization of current unfunded obligations," a step that will require changes in federal pension law. "This relief is the key that can unlock the door to long-term capital financing," he stated.
For younger pilots with many years to go before retirement, the solution for some airlines may lie in transitioning away from "excessive reliance" on traditional defined-benefit plans, either by replacing them or by devising combination plans with a larger defined-contribution component. Such changes "will have to be negotiated separately at each airline," Woerth added.--Perry Flint
From the ATW website:
ALPA concedes pilot pension plans must change
Dateline:**CENSORED** Monday September 06, 2004**CENSORED** **CENSORED****CENSORED****CENSORED**
The Air Line Pilots Assn. said Friday that it is "ready to help build a new pension model" for airline pilots, including making changes to existing plans for younger pilots while protecting the benefits of those closer to retirement.
The move comes as many US network airlines face huge pension funding gaps and one, US Airways, has terminated its pilot pension plan and replaced it with another. United Airlines is believed to be on the verge of terminating its plan, while Delta Air Lines could be next. Fear that this may occur has caused an exodus from Delta of senior pilots, who prefer early retirement and a smaller lump sum payout rather than having their pensions potentially reduced in a bankruptcy.
When a company terminates its pension plan, the US Pension Benefit Guaranty Corp. assumes only the insured portion of the plan. For pilots, the difference between a company pension and PBGC amounts can be tens of thousands of dollars each year. Although the situation at American Airlines is not as critical, pilots there are worried too.
In Friday's statement, ALPA President Duane Woerth said the organization is "extremely concerned about the future of defined-benefit pension plans for pilots unless we provide a method for the nation's already stressed air carriers to deal with their current unfunded pension obligations. Tens of thousands of pilots risk losing benefits they have earned."
According to Woerth, "the cornerstone of any solution to the pension crisis must be long-term amortization of current unfunded obligations," a step that will require changes in federal pension law. "This relief is the key that can unlock the door to long-term capital financing," he stated.
For younger pilots with many years to go before retirement, the solution for some airlines may lie in transitioning away from "excessive reliance" on traditional defined-benefit plans, either by replacing them or by devising combination plans with a larger defined-contribution component. Such changes "will have to be negotiated separately at each airline," Woerth added.--Perry Flint