Possible A FUND PROBLEMS AT CAL

tie1on

Well-known member
Joined
Mar 17, 2005
Posts
186
Total Time
15000
Sources say.

As of april the fund had approx 640 mil, by the end of 2008 they had 400 mil then deduct the erw guys and end the year with 280 mil. apparently the company put 25 mil in .

the fund is approx 65-70% funded in equities. The fund is funded at 35%.

the next drop date is the 27th of march. There are consequences if the fund is not funded within 15 days. my guess is the company will suspend the lump sum option, and pay the IRS penality.
 

AWACoff

Well-known member
Joined
Nov 27, 2001
Posts
1,121
Total Time
3000
Why wouldn't the company just stop funding the A fund period? I'm willing to bet the IRS penalty is less than putting money into the A fund.
 

Beaver_Liquors

Active member
Joined
Nov 29, 2004
Posts
29
Total Time
5500
Larry K said on the last earnings call that the lump sum options save the company money, because they get the person off the "books" or something like that. I dont think we should have to worry about the lump sum if saves them money. Listen to the call and make up your own mind, dont take my word for it.

I dont have a dog in this fight really as i only have a B plan, but i am not willing to let the A-plan be taken away in anyway shape or form. That was something that others have earned and we have already paid for the A-plan lump sum in other concessions, we are not going to pay for them again and again and again unless we let them convince us otherwise, which i am not buying.
 

Ex737Driver

Contract 2020????
Joined
Aug 14, 2004
Posts
1,240
Total Time
15000+
Sources say.

As of april the fund had approx 640 mil, by the end of 2008 they had 400 mil then deduct the erw guys and end the year with 280 mil. apparently the company put 25 mil in .

the fund is approx 65-70% funded in equities. The fund is funded at 35%.

the next drop date is the 27th of march. There are consequences if the fund is not funded within 15 days. my guess is the company will suspend the lump sum option, and pay the IRS penality.
Actually the 27th date payment has been made. The MEC and mgmt have addressed this in a recent blastmail. The next date, though, is still a problem and I belive it's near the end of June.

Not sure about the 35% funding but I thought the min amount was 55%. If the funding fell below that, then there would be a monthly charge of 1.5M until it was brought back into complaince.
 

CitationLover

Aw, Nuts!
Joined
Feb 26, 2003
Posts
3,316
Total Time
1500+
We pilots always make fun of reporters talking about aviation and I now see that those in the pension industry can do that about this topic.....

The large amount lump sum option will be removed from the plan if the funding percentage falls below 60% BY FEDERAL LAW (PPA 2006). It will not be allowed until the plan's actuaries can certify it back above 60%.

http://www.findleydavies.com/resources/Pension_Legislation_Update_8-4-06_RBB_.pdf

Benefit Restrictions
The bill provides for certain benefit restrictions if a plan’s funded ratio falls below specified levels. In
general, a plan amendment which increases benefits would be restricted if the funded ratio falls below 80%. Plans with a funded ratio between 60% and 80% could pay lump sums within certain
limitations. If the funded ratio falls below 60%, lump sum payments would be restricted altogether and benefit accruals would automatically be frozen. Plans of bankrupt sponsors funded below 100% could not pay lump sums.
Note: Continental's A fund is already frozen (ie no benefit accruals).
 
Top