Delta bankrupcy/Pension Question

Pilottodd2

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If Delta files Ch. 11 and targets the Pensions (which I think they will), then I understand that the pilots can retire and take 40% upfront, is this correct?
If so, does anyone know how many pilots are currently eligible for partial, and full retirement? How does this equate into dollars that Delta would have to pay out immediately if this happened?
How would this affect Delta's bottom line if the day after Ch 11, every eligible pilot retires and takes the 40%? Can Delta afford this? Or does Delta have the ability to block such a thing?
Obviously it would be a large amount of $$, but also a large amount of flying that would have to be covered.
 

General Lee

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Right now, if you are 50 years old or older, with more than 10 years with the company, you can take 50% of your retirement in a lump sum, and the other half in a monthly anuity. We are one of the only major airlines with the lump sum option, which we negotiated in our last contract. Our guys only need to give 24 hours notice to retire. It usually takes 4-6 weeks to get the lump sum check in their hands, and that is the risk. If Delta decides to go bankrupt, they could freeze the lump sum option, leaving the pilot with only the anuity option, and that could go away if the pensions are dumped. (the PBGC would give about $2000 a month instead of the $12,000 you were expecting)

The pension reform currently floating around Congress may also make more DL pilots leave early. I believe the plan allows the airlines to extend out the number of years to pay off the pension shortfall (from 4 or 5 to maybe 14 years). But, there probably would be a stop to lump sum pay outs, and only an anuity plan. (monthly checks) Most senior Captains would rather have the lump sum, as something else bad could happen (another 9-11 for example) and the plan could then go to the PBGC. So, it looks like there could be mass retirements either way at Delta. We have had 1800 captains leave since last May (2004), and a normal year has about 125 retirements. We still have about 500 guys left (probably 777 or 764 pilots) with more than 25 years at DL, and we have about 1000 that are over 50. (that may be a low number) It would be great for us younger pukes (I am 40) but we haven't expanded, and we have parked some planes as of late.

Also, if Congress does enact some pension relief, the pensions may not go away even in a Chap 11. If more time is given to pay everything off, then the airlines aren't in that much "pension trouble." The only reason then to go to court would be to restructure the debt and sell off some assets to be able to come out. Who knows?


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dtfl

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General - I read the reform the committe is pushing, or rather, approved, gives airlines 14 yrs vs the 25 we wanted. Any rumors on that on the line?
 

General Lee

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herewego again said:
Wow, that is amazing. I had no idea it was that high.

No SHNIT. Amazing is right. And it would have been better had we kept all of our airplanes, but instead we have downsized and bought more RJs. We have more leaving on Aug 1st.


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General Lee

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dtfl said:
General - I read the reform the committe is pushing, or rather, approved, gives airlines 14 yrs vs the 25 we wanted. Any rumors on that on the line?

I read that also. It hasn't been made law yet, so there may some more tinkering. 14 years is better than 4 years to pay off the shortfall we owe......


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bafanguy

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Just let me add a bit of info I learned about this lump sum thing. I was at a meeting of DL retirees and heard a rep from the PBGC speak. He said if you are a pilot who took the lump, the PBGC will pay you NOTHING in the event DL terminates the defined benefit plan... NOTHING. The lump was more than the PBGC would have paid you in any event...you have been paid in full...have a nice life.


I was there, I heard what he said...I double checked it with my buddies who were also there. We all heard and understood the same thing.

There may be some people who think this point is debatable. I would suggest that there is no precedent for this case and would like to see someone provide verifiable precedent to dispute what the PBGC rep said ( I'll be a lot better off if he's wrong ).

When the PBGC hits the wall when another defined plan is dumped on them, they will be insolvent, politics will override all else and if you think they'll pay you when you took the lump...you're dreaming. We'll be lucky if they don't come back under the three year provision and take BACK the friggin' lumps.
 

Spooky 1

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Class Action Lawsuit "Settlement"

General,

Are you aware of the Class Action lawsuit, i.e., Delta Air Lines, Inc. ERISA Litigation? It would appear that Delta had been accused of using a faulty formula for computing the lump sum payouts perhaps as far back as 1989. They have agrred to make available $16,000.000 so as to make amends for this oversight. Notices are going out to all of those eleigable pilots as I write this, so as to put them on notice that this oversight money may be coming their way.

I have to admit, I had no idea that this was in the works, and in my case this may by nothing more than a round of drinks at the local pub, but none the less it is another shot below the water line for Delta.
 

General Lee

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Yeah, but Leo got $16 million and also credit for 30 years for his pension....



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General Lee

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bafanguy said:
Just let me add a bit of info I learned about this lump sum thing. I was at a meeting of DL retirees and heard a rep from the PBGC speak. He said if you are a pilot who took the lump, the PBGC will pay you NOTHING in the event DL terminates the defined benefit plan... NOTHING. The lump was more than the PBGC would have paid you in any event...you have been paid in full...have a nice life.


I was there, I heard what he said...I double checked it with my buddies who were also there. We all heard and understood the same thing.

There may be some people who think this point is debatable. I would suggest that there is no precedent for this case and would like to see someone provide verifiable precedent to dispute what the PBGC rep said ( I'll be a lot better off if he's wrong ).

When the PBGC hits the wall when another defined plan is dumped on them, they will be insolvent, politics will override all else and if you think they'll pay you when you took the lump...you're dreaming. We'll be lucky if they don't come back under the three year provision and take BACK the friggin' lumps.

The million dollar lump sum question is: Will they terminate the pension if they go Chap 11 after the legislation is enacted? Grinstein has fought hard for an extension, and would he terminate it if he still got the 14 year extension? I don't think he would.......would he?


Bye Bye--General Lee
 

FoxHunter

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bafanguy said:
Just let me add a bit of info I learned about this lump sum thing. I was at a meeting of DL retirees and heard a rep from the PBGC speak. He said if you are a pilot who took the lump, the PBGC will pay you NOTHING in the event DL terminates the defined benefit plan... NOTHING. The lump was more than the PBGC would have paid you in any event...you have been paid in full...have a nice life.


I was there, I heard what he said...I double checked it with my buddies who were also there. We all heard and understood the same thing.

There may be some people who think this point is debatable. I would suggest that there is no precedent for this case and would like to see someone provide verifiable precedent to dispute what the PBGC rep said ( I'll be a lot better off if he's wrong ).

When the PBGC hits the wall when another defined plan is dumped on them, they will be insolvent, politics will override all else and if you think they'll pay you when you took the lump...you're dreaming. We'll be lucky if they don't come back under the three year provision and take BACK the friggin' lumps.

That subject was brought up on the US Air section, FAQ, on the PBGC web site. I recall it said that if one was to receive a lump sum any further payments would be adjusted. That adjustment could result in a zero payment. The big question is there any way the PBGC can come after an individual to recapture what they, the PBGC, consider an excess payment?
 

General Lee

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Best solution? Take the cash and move to Costa Rica.



Bye Bye--General Lee
 
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