ALPA's opposition to Age 60

[CitationLover]

raising past 60 migh be bad......

for the pension funds at least.....

with age 60 built in the minimum required contributions to these pension funds have been accelerated versus a "normal" age 65 pension. it 60 was moved to say 65, then these employers could "stretch" out their contributions and not fund these plans as much as they need to be.

my guess is if age 60 gets raised, then you will see more of the usair pension fiascos.

finally someone knowledgeable about pensions, General Lee. GATT rate!! However, I would assume most retirees wouldn't know what a GATT rate is unless they had a lump sum option.

 

[General Lee]

Citationlover,

The only reason I know anything about the Gatt rate is that that is the key phrase I now hear all the time in the crew lounge. I guess the Gatt rate is now at it's all time low, which makes a big difference to your lump sum. We had 92 guys leave early on May 1st, and all of those guys were senior with over 25 years of service. We expect a lot more on June 1st and thru July. That is good for everybody, and hopefully will eventually start the furlough recall.

Bye Bye--General Lee

 

[chase]

citationlover

I would disagree a change to the age 60 would create further pension problems. In fact, I believe the airlines would prefer to stretch the age 60 rule out further for the following reasons.

1. Many folks are retiring early at the legend carriers putting a greater than expected strain on pension funds. Stretching out the age requirement might entice some of these folks to continue working (not taking money to the fund) allowing for the market to recover, i.e. pension funds back to respectable levels. This would also allow the company to allow (hopefully) increasing revenue add to the yields & returns thereby adding to the financial health.

2. Flying longer, accumulating more wealth by the pilot, not drawing upon one's retirement funds until 1-5 years later, will put less stress on the system. Pension funding methods are obviously going to change, folks who don't believe that are mistaken IMHO. This will help companies recoup some of their losses but will lower expectations for future retirement funding (downside).

I'm no financial guru & all of the above is open for debate but the view by some that $100-$150K retirement income after Age 60 will continue adinfinitim is unrealistic. For now it may happen & that is why so many legend pilots are retiring early in hopes of grabbing the apple now.

As for the SWA medical. I agree, changes hopefully will be coming in the future but realistically when one talks about what will happen for pilots, one has to imagine what will happen to all employees retiring from SWA or company XX. To think that only pilots will/can negotiate this benefit without other labor groups asking/getting the same thing is also unrealistic. SWA is 85% unionized. Can a public company provide 100/90/80% medical coverage for all retiring union members from all groups for the rest of the existance of the company? What is realistic for continued growth? I don't have the answers, open for suggestions that are don't risk the solvency of the company.

 

[CitationLover]

chase,

point #1 would work if pensions had been traditionally funded to retirements past 60. they haven't. this extension would give the funds an "excuse" to lower their contributions (since there will not be as many retirements closer to the funding date) thus weakening the system.

general lee,

the gatt rate is basically the 30yr treasury rate, however since the government retired all the 30yr debt it is now extrapolated from 15yr securities. this lower rate is one of the primary factors in the pensions being "underfunded". the contributions are calculated at a long-term rate of 7-8.5% (i.e. the assets are based on this rate) and the assets are being paid out at real low current gatt rates (5%), thus there is more being taken out versus put back in.

please keep in mind retirement medical benefits are not guaranteed like pensions. besides, unions negotiating retirement benefits is bad practice. the union could care less about retired members who pay no dues.

 

[FoxHunter]

CitationLover

"chase,

point #1 would work if pensions had been traditionally funded to retirements past 60. they haven't. this extension would give the funds an "excuse" to lower their contributions (since there will not be as many retirements closer to the funding date) thus weakening the system."

ALPA has been trying to get Congress to change the law so airlines could stretch out pension contributions.

ALPA's Communications Department provides information and support for news media inquiries. An ALPA communications representative can be reached in the Herndon, Va. office at (703) 481-4440.



--------------------------------------------------------------------------------

News Release

Release #03.042
May 14, 2003

ALPA Leads Charge For Pension Law Reform

WASHINGTON, D.C.---The head of the nation’s largest pilot union calls on Congress to support special legislation to protect workers’ pension plans. Working with a coalition of airlines and all the major AFL-CIO airline unions, ALPA provided Congress with a special funding rule draft for airline employee defined benefit plans.

"As we discovered at US Airways, the very ERISA (Employee Retirement Income Security Act) law dating to 1974, originally designed to protect workers’ pensions, has a perverse effect of actually setting in motion in today’s unusual economic environment an arbitrary set of actions that almost certainly would lead to the termination of many additional plans that the law was designed to protect," said Capt. Duane Woerth, president of the Air Line Pilots Association, International. "We are focusing our legislation at the deficit reduction contributions, which function like gigantic balloon payments that airlines simply do not have the cash to pay."

The coalition of airlines and the airline unions are concerned that under current regulations, the Pension Benefit Guaranty Corporation might be forced to demand these extraordinary balloon payments from virtually every airline that has a defined benefit plan no later than very early next year. If an airline fails to pay, the Treasury Department could put a lien on an airline’s assets, which would either force an airline into bankruptcy or prevent the exit from bankruptcy without pension plan terminations.

Founded in 1931, ALPA is the world’s oldest and largest pilot union, representing 66,000 pilots at 42 airlines in the U.S. and Canada. Visit the ALPA website at http://www.alpa.org.

###



ALPA Contact: John Mazor (703) 481-4440

 

[active_herk]

The folks that won't want the Age 60 rule repealed are the major airlines themselves. Gosh, could you imagine what that would do to their bottom lines if they allowed their most senior pilots (most likely their most expensive) to continue to fly??? I think a good compromise would be a bridge to age 65...

Actually, I think you may be wrong on this point. If the major airline managers had their way, we would work until the day we die. If your airline has an 'A' fund, the company pays a pension to you every month until you die. This amount is based on a formula or in some cases a series of formulas. In return for receiving this pension, you are contributing ABSOLUTELY NOTHING to the company once you are retired. In other words, you are generating no revenue for the company. On the other hand, if you continue to work, you may be the highest paid employee, but you are still generating revenue for the company. I can guarantee the revenue you generate will far outweigh the amount you cost the company in terms of salary and benefits. It will at the very least cover the cost difference between your salary as an active employee and the amount the company is paying you in pension.

 

[CitationLover]

ALPA = hypocrite

foxhunter,

is this the same ALPA that was screaming bloody murder at US Airways for considering the PBGC as an option. now they want to exacerbate the situation? since when did ALPA care about airline companies?

if you want to know the exact thing (the "deficit reduction contribution") the article is talking about, it is called a PBGC 4010 calculation.

 

[46Driver]

I've watched this fight over on the ALPA boards for a while and the one constant I've noted is that those with a pension (i.e., Delta, American, etc...) want retirement at age 60 and those with only a 401k (Southwest, the majority of the regionals) want 65 - its all about money. Seems like the only fair thing to do is get rid of the age 60 FAA ruling and let each pilot group handle it in their own contract.

 

[FlyDeltasJets]

Yeah, that or....

They could work on improving their contract so they don't have to work past 60.

Nah, it's probably easier to petition congress and take the rest of us down with them.

 

[46Driver]

FDJ's,
You know there is no way that pilots at a regional are going to make the kind of money that you do at a major - thus the retirement is going to be inferior. The fact that Delta has a large pension is fantastic - I have no desire to change that. If you want things to continue the way they are AT DELTA, then make it part of Delta's contract - but don't impose your will on those IN DIFFERENT COMPANIES making only a fraction of what you do. This does not affect your scope clause, this does not affect your seniority list - it simply allows pilots who did not hit the jackpot of a major airline to have a sufficient retirement.

 

[FlyDeltasJets]

46,

I understand what you are getting at, but if you think that the contracts of other carriers have no effect on ours, well, you just haven't been paying attention.

Because of that, the odds of too many more people "hitting the jackpot" are becoming slim, and the jackpot itself is shrinking.

This is just another example of it.

 

[b757driver]

OK then, give me my SS, medicare etc @ age 60 if you take away the right for me to continue to work when I need to. Will you do that? I doubt it!
Gentlemen, there are always two sides to any story and some of you really need to stand in the other guys shoes. So what if it takes a younger guy a few extra years to upgrade? ALL he has to do is wait - he'll get there eventually. At 60, you can't turn the clock back, that's it, you're done!
Freedom of choice, no arbitrary age discrimination. If it was all about safety, how come surgeons are not required to retire @ 60? Most probably do a few years earlier because they can AFFORD to & it's their choice. We already have too much regulation in this industry, why keep a 40+ year old rule going when it is really about politics, not safety?

 

[FlyDeltasJets]

Three points.

#1. I do believe it is about safety, just as any other "arbitrary" age limit is.

#2. A dollar today is always worth more than a dollar tomorrow. Six year stagnation today is equally offset by six extra years late in a carrer.

#3. I will happily get behind any fight to lower the age at which pilots can receive SS benefits. Fight for that if you like, it doesn't harm the rest of us.

 

[b757driver]

As 46 driver says, we are not all as "lucky" as you Delta guy - you have got it made, so please don't foist these rules on us who are less fortunate than yourself. Be thankful you have a job, sorry career, be thankful you have good health, be thankful you have a great retirement but always remember - not everyone is as fortunate as you. Putting artificial obstacles in the the way is not the way to go. Why are you so concerned about making more money? Do you not earn enough at a major? Lots of people make a fraction of what you do & survive OK because they have to. Life is not always about money. I think it's called greed.
When you have been in our shoes, you will know what I am talking about.
Finally, if it's all about safety, then answer me this:
why have most of the rest of the world gone to post 60 now? How come planes are not falling out of the skies?!!
At the last count, France was the only EU country in the whole of Europe to hold out. Now we are on the same level as the French. And we know how great the French are, don't we?

 

[FlyDeltasJets]

Don't assume 757. I have been in your shoes.



In fact, I am there now.


So you can keep your lectures about greed to yourself.