APA: No lump sums for retiring American Airlines pilots now

[waveflyer]

APA: No lump sums for retiring American Airlines pilots now

By Terry Maxon/Reporter
[email protected] | Bio
6:42 PM on Wed., Nov. 30, 2011 | Permalink
American Airlines had an abnormally high number of pilots retire recently as the stock market declined and fears about an AMR/American bankruptcy rose.

Pilots worried that AMR would file for bankruptcy headed out the doors, and took their pension from Plan A, the defined-benefit plan, as a lump sum.

It appears they may have made a wise choice. With American's and AMR's filing of bankruptcy papers Tuesday, that option is now foreclosed. Here's what the Allied Pilots Association advised its members Tuesday evening:

"Please be aware that today's Chapter 11 bankruptcy filing by AMR will block the A Plan lump sum option for pilots retiring today or thereafter.
"If you have locked in a Benefit Commencement Date of Dec. 1 and would like to change to a later date, you must submit a new Pilot Election of Early Retirement Form or Revocation of Early Retirement Form no later than 3 p.m. Central tomorrow, Wednesday, Nov. 30.

"Otherwise, you will be retired effective Dec. 1 and will receive your A Plan benefit as an annuity. If the A Plan is subsequently terminated, the annuity would then become subject to Pension Benefit Guaranty Corporation limits."

Between Sept. 1 and Nov. 1, 2012, 308 pilots retired, or more than 100 a month. A lot of them took lump-sum distributions from the Plan A pension plan. By comparison, about 11 pilots on average retired each month in 2010.

 

[aa73]

We just had 13 retirements today, Dec 1. Bummer for them and for those who didn't pull the plug earlier....

Now the discussion is leaning towards freezing the A Fund or just terminating it and getting a payout (a la UAL/DAL.) Any words of wisdom on this for those of you who've been through it?

 

[Flopgut]

I'm a CAL pilot and we froze it. Bad idea. Terminate it and get whatever money is there. It's the kind of thing that either needs to be moving like it was designed, or shut down. Anybody who tells you different is really senior, near retirement, and has a lot of years in the plan.

 

[JumpersAway]

I thoughty AA had more pilots over the age of 60, than they did younger than 55. Sounds like a lot of people hung on beyond their ability to retire, only to have it bite them in the rear.

 

[rjacobs]

I heard that the guys that retired in the 90 days prior to the BK filing may or may not get their checks since it takes about 90 days to cut the lump sum checks. Is this true?

 

[bluefin]

Uh-oh, better change the retirement age to 70, need to make up for lost wages!~ What I was told prior to furlough!!!

 

[Fubijaakr]

Well, you've just gotten 8000 more votes for Age-70.

 

[ualdriver]

We just had 13 retirements today, Dec 1. Bummer for them and for those who didn't pull the plug earlier....

Now the discussion is leaning towards freezing the A Fund or just terminating it and getting a payout (a la UAL/DAL.) Any words of wisdom on this for those of you who've been through it?

APA's ability to have a choice in the matter of their pensions is probably done by now. If you guys can negotiate a deal to freeze the pensions, obviously that is the preferred route. The problem is that it has to be properly funded. What is the current shortfall and is the judge and the creditor's committee going to agree to bring it up to proper funding levels? A frozen pension still requires ongoing financial maintenance by the company when it exits bankruptcy. Do you think the company is going to agree to that? Maybe.

It is not even guaranteed that you would get a payout from the company like UAL then DAL did. That was a deal negotiated by ALPA in exchange for going along with the inevitable pension loss. Is the APA going to "play tough" and fight and fight every step of the way, even on issues they will likely lose anyway like many internet tough guys say you should do, or are you going to negotiate and play nice? That will determine, too, whether you get things like a bond worth 100's of millions or nothing.

 

[Flopgut]

APA's ability to have a choice in the matter of their pensions is probably done by now. If you guys can negotiate a deal to freeze the pensions, obviously that is the preferred route. The problem is that it has to be properly funded. What is the current shortfall and is the judge and the creditor's committee going to agree to bring it up to proper funding levels? A frozen pension still requires ongoing financial maintenance by the company when it exits bankruptcy. Do you think the company is going to agree to that?

The company will be delighted to continue to fund a frozen pension! No problem at all. The thing is, new hires won't be included, ever. It's like built in B scale. And, the company gets to use the funding obligations against the entire pilot group's contract at the negotiating table.

F-ing old guys love it too. They won't lift a finger for another pilot, but they sure as hell love it when the whole group has pull for them. Trust me, I'm in this situation. Terminate the plan! Do NOTHING special for the old guys. Everyone will be better off.

 

[Flopgut]

Well, you've just gotten 8000 more votes for Age-70.

Yeah, that's the answer. You ever get tired of acting like a fool?

If anything, this bk and pension debacle perfectly illustrates that being willing to retire has nothing to do with money or income, or what the exact age limit is. Last month these pilots had their retirements intact and were almost 4 years into a fresh retirement age increase. They chose not to leave and it cost them. At what point do you think old pilots ought to take some responsibility for their decisions?