so when is going to end????

[apdsm]

Also remember pension problems are not unique to the aviation industry.


http://www.fool.com/news/commentary/2003/commentary030625bm.htm

 

[mdf]

mdf,

Agreed, but the problem comes in how this is accomplished. For example, at the last DL stockholder meeting here in ATL, several motions ( by employee stockholders ) to hold mgmt accountable and tie their pay to performance, or limit their compensation were put up for vote only to be voted down by stockholders.

How do you overcome that ?

I knew someone would ask, and I have no easy answer. I will say this. I am tired of listening to the media talk about the airline bloodbath, and all the problems with the industry. In my opinion they should be talking about The UAL/NWA/Delta story. About how long these airlines have been in business, how they helped build the air transportation industry, and how they got where they are sans high energy prices and overcapacity. IMHO these companies should be hurting because of the business enivironment, but not to the extent they are in now. Legacy mgt. operates like mutual fund mgt. They all do the same thing so when the crap hits the fan they point to the guy next door, and say he's in the same situation. Then they point to LCC's, and say it is there fault. Then they go after labor while lining their pockets. After all of that they probably go to the club and giggle over brandy and cigars.

 

[bafanguy]

I knew someone would ask, and I have no easy answer. I will say this. I am tired of listening to the media talk about the airline bloodbath, and all the problems with the industry. In my opinion they should be talking about The UAL/NWA/Delta story. About how long these airlines have been in business, how they helped build the air transportation industry, and how they got where they are sans high energy prices and overcapacity. IMHO these companies should be hurting because of the business enivironment, but not to the extent they are in now. Legacy mgt. operates like mutual fund mgt. They all do the same thing so when the crap hits the fan they point to the guy next door, and say he's in the same situation. Then they point to LCC's, and say it is there fault. Then they go after labor while lining their pockets. After all of that they probably go to the club and giggle over brandy and cigars.

mdf,

I hear ya. But this comes down to the same thing that has driven business as long as there has been such a thing as "business", the Golden Rule: He with the most gold...rules. I'm sure that will never change and maybe it shouldn't. That call would be way beyond me. Maybe it's just inherent in capitalism, which I would not vote to change.

 

[CFIse]

.
Kinda like privatizing Social Security??? . . .

Well in theory - and it's just a theory - the government doesn't go away. So weird as it may seem I'm against SS privatization because I don't think, in the long term, the government, which is far more concerned about re-election than fiscal responsibility will let SS die, while I think we've seen that private companies don't really give a rat's rear end and will shoot DB pensions at the drop of a hat.

But that's just me

 

[CFIse]

I agree, but want to point out that it doesn't have to be company "matching", per se. At my carrier, for example, the company makes a contribution to your retirement account that equals 10.5% of your pay. It doesn't matter how much you contribute. So, technically, it's not a match, they are just contributing.

Well that rocks - I've never run into such a plan - but I wish I had

 

[mother fokker]

I agree with the aforementioned replies, and I absolutley agree with many of your opinions with current and past DB pension plans they are being deemed virtually worthless, with the market factors and legal help of corporation's accounting firms.

The tricky thing about current 401k plans, hence, why I use the analogy of "gambling in Vegas" is that I had a 401k at a commuter in the late 90's that grew astronomically in that market. Luckily, one of the few smart things that I've done, was to cash that revenue into a local housing market, which luckily for me grew. Had I stayed with that 401k and it's relevant investments it would be virtually worthless today. I know 401k's are traditionally based on long term gains, but what happens when you cash out at the same time everyone else does or you cash out when the market is down??? I.e. baby boom retirements, and all the intracies of the speculative market? When everyone else is cashing out, it will effect the price of your investment, hence ,lowering returns when you decide to cash in.

So to reiterate, my question? Why is there the mentality amongst profitable LCC pilot's that a stable pension is taboo? I know that a DB pension plan with legal loopholes the size of a garbage truck will soon be decimated. Why not set a precedent for the industry at a company that is profitable, and negotiate a pension plan that will hold merit down the road? Easier said than done I know. I know that labor unions have been decimated in the current political climate, but why can't profitable pilot groups stand up up to management and demand future secruity for a lifetime of work?

Looking at UAL and US air pensions that paid monthly and are being sucked dry, compared to Delta pilots the walked away with 50% lump sums and lost 50% percent as well. In the last case, I know they worked for these pensions on top of their 401ks. In that respect, the pension was much better than a stand alone 401K. Delta pilots that held out to the end, with the recent bankruptcy filings, will be on shakey ground and I wish them the best as well as all other retirees in similiar circumstances.

I don't have the answers, and would at least like to spark the debate, I hope, that pilots at profitable LCC's will at least consider why we are losing pensions in such a demanding profession???

What I read in a previous post is that Herb is a very smart businessman...Agreed!...Herb, believes that current DB plans won't work. That has been proven true. I'm a businessman, as well, I got into this industry to make money. I hope we all don't throw up our hands with the sad realization that "Herb said pensions need to go away." I'd rather take a shot of wild turkey myself...get pissed... stop looking like a deer in the headlights, and break the mold, and demand compensation that is beneficial for the pilot group...not Herb, Leo...etc???

 

[Singlecoil]

I agree, but want to point out that it doesn't have to be company "matching", per se. At my carrier, for example, the company makes a contribution to your retirement account that equals 10.5% of your pay. It doesn't matter how much you contribute. So, technically, it's not a match, they are just contributing.

It sounds obvious, but I still get people saying that AirTran doesn't match. That's right, they don't, it's better than matching, because I can only contribute $13,000 a year, while their contribution is unlimited.

Actually, you can put in $14,000 in 2005, and $15,000 in 2006. Your company can put in $41,000 minus what you can put in ($14,000 for 2005) tax free. So in 2005, your company can put in $27,000 in your pre-tax account. If you are over 49 years old, you can put in a bonus $4,000 this year and $5,000 next year. The $41,000 total for employee and employer contributions also increases by that amount if you are over 49. So if you were 50 in 2005, you could put in $18,000, but the total of your contributions and the company's contributions to your pre-tax account cannot exceed $45,000. It won't be a factor for you at the 10.5% rate, but is worth considering nonetheless.
Clear as mud? I thought so.