APA: No lump sums for retiring American Airlines pilots now

[Megadeth]

These Morons have seen the writing on the wall for months but decided to stay and try to milk the cow a few more months. Well guess what Einstein, you just lost your ass. Welcome K-Mart shoppers.

 

[dicko]

They need to turn Arpeys retirement over to the PBGC. I would worship any Bankruptcy Judge that ordered it . I also live in a fantasy world filled with Unicorns and strippers.

 

[laker4284]

The options for the AA pension fund are limited. If the pension is abrogated the funds transfer to the PBGC to use in funding PBGC-backed payments. If that is the track taken, then the older guys will get more funds as the payments are based on present age up to age 65. An early 'retirement', even if involuntary, would pay out about $2000 monthly. For someone 63 that payment would be at or closer to the MAX payment of $4000. Those numbers are approximate but close.

If the union is to fight to keep the pension intact it's going to cost them in wages and benefits - big time. The airline is trying to get costs down and they aren't going to maintain the status quo in bankruptcy. That's just not going to happen.

 

[General Lee]

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.

Here's how it was explained to me. Those pilots, especially over age 60 with 25 years or more with the company could have had a possible lump sum payout of let's say $1.7 million. That's cash in their hands, to do whatever they want. Now, they may still get a payout from the PBGC, maybe up to $80K a year, but as soon as they die, that stops. That also means their kids or 4th hot Brazilian wife don't get to have any left overs. Had they taken the $1.7 million, they could have given that to their kids and/or hot wife upon their death. NOT ANYMORE.

How could these guys NOT see what was happening? Now some will have to fly until 65, and lose money in the end for their loved ones. Oooooops.

One more month.......I love those Buenos Aires layovers......ONE MORE MONTH..... OOOOOPS.



Bye Bye---General Lee

 

[General Lee]

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

As FOs, maybe. That's the way they do it in the UK. They can still work, and that preserves upgrades. Just not hiring.


Bye Bye---General Lee

 

[slaquer5]

Here's how it was explained to me. Those pilots, especially over age 60 with 25 years or more with the company could have had a possible lump sum payout of let's say $1.7 million. That's cash in their hands, to do whatever they want. Now, they may still get a payout from the PBGC, maybe up to $80K a year, but as soon as they die, that stops. That also means their kids or 4th hot Brazilian wife don't get to have any left overs. Had they taken the $1.7 million, they could have given that to their kids and/or hot wife upon their death. NOT ANYMORE.

How could these guys NOT see what was happening? Now some will have to fly until 65, and lose money in the end for their loved ones. Oooooops.

One more month.......I love those Buenos Aires layovers......ONE MORE MONTH..... OOOOOPS.



Bye Bye---General Lee

I know of several that have just got divorced . They are in there late 50s or early 60 s. Did there Ex get there share of the A fund at the signing of the divorce ?


I know CAL had something like this.

 

[Fubijaakr]

Geez, Flopgut, you are a humorless git. Guess you need a "sarcasm" tag every time.

 

[waveflyer]

RETIREMENT HEIST, Ellen Schultz


"'As far as I can determine there is only one solution [to the CEO's demand to save more money]', the HR representative wrote to her superiors. 'That would be the death of all existing retirees.'"

It's no secret that hundreds of companies have been slashing pensions and health coverage earned by millions of retirees. Employers blame an aging workforce, stock market losses, and spiraling costs- what they call "a perfect storm" of external forces that has forced them to take drastic measures.

But this so-called retirement crisis is no accident. Ellen E. Schultz, award-winning investigative reporter for the Wall Street Journal, reveals how large companies and the retirement industry-benefits consultants, insurance companies, and banks-have all played a huge and hidden role in the death spiral of American pensions and benefits.
A little over a decade ago, most companies had more than enough set aside to pay the benefits earned by two generations of workers, no matter how long they lived. But by exploiting loopholes, ambiguous regulations, and new accounting rules, companies essentially turned their pension plans into piggy banks, tax shelters, and profit centers.

Drawing on original analysis of company data, government filings, internal corporate documents, and confidential memos, Schultz uncovers decades of widespread deception during which employers have exaggerated their retiree burdens while lobbying for government handouts, secretly cutting pensions, tricking employees, and misleading shareholders. She reveals how companies:
* Siphon billions of dollars from their pension plans to finance downsizings and sell the assets in merger deals
* Overstate the burden of rank-and-file retiree obligations to justify benefits cuts while simultaneously using the savings to inflate executive pay and pensions
* Hide their growing executive pension liabilities, which at some companies now exceed the liabilities for the regular pension plans
* Purchase billions of dollars of life insurance on workers and use the policies as informal executive pension funds. When the insured workers and retirees die, the company collects tax-free death benefits
*Preemptively sue retirees after cutting retiree health benefits and use other legal strategies to erode their legal protections.

Though the focus is on large companies-which drive the legislative agenda-the same games are being played at smaller companies, non-profits, public pensions plans and retirement systems overseas. Nor is this a partisan issue: employees of all political persuasions and income levels-from managers to miners, pro- football players to pilots-have been slammed.

Retirement Heist is a scathing and urgent expose of one of the most critical and least understood crises of our time."

 

[whymeworry?]

I have sympathy for the guys who were too far from retirement to make the call. But for the guys who were 55-65 and already had a 7-figure nut in that plan, to NOT pull the trigger when your company fails to make money in the best of times AND the stock is down 90%, that's just plain stupid. Gambling is stupid. And that's what they did, gambled that all would be OK.

They could have taken the $1-2 million plus lump sum payment and gone overseas as a contract pilot making more money TAX-FREE than they've ever made at American... if working was so important to them. I talked to a few of these guys over the past 6 months. All tell me, "I'm not going overseas, fk that!" Well, fine, but you made your bed, now deal with it.

I love flying jets, but the rest sucks. Hotels, TSA, poor sleep schedules, surly and old FAs, a bought and paid-for FAA, management constantly breaking the rules, the list goes on. I wouldn't debate it even for a second if I could pull the trigger. Which is exactly why so many did.

They're laughing all the way to the bank. And good for them for doing so. They let common sense prevail over greed.

 

[Flopgut]

Guess you need a "sarcasm" tag every time.

Yes. About retirement age I do...