U.S. to Take Over UAL Pilots' Pensions

[Boeingman]

B man,

I could not agree with you more.

Sounds like their denial can be a direct result of fear. I've been down that road before.

You made a great move to get out of the airlines. Best of luck to you.

 

[G4G5]

skykid
Is that a joke? I think you are confused. In other words, the stuff you are quoting doesn't support your arguement. You have managed to convince yourself that the PBGC stating they will take steps in court now to take control of the pilot pension means they are going to force a liquidation (which they can't).

They also can't bypass the BK courts and go directly after just the pilots pension (especially when ALL parties involved are opposed) but they did............

Here's the bottom line - if it is decided in court that United has to dump the pensions to exit CH11, the PBGC is going to get them.

That's the kindergarden version.
The big kid version revolves around the T/A between the pilots and UAL mgt.
The T/A states that:
If any pension remains in place, then the UAL pilot pension MUST remain in place. Bottom line the PBGC doesn't like this
It also states that all concessions across the board must be equal, the pilots can't be forced to give an unfair amount, the PBGC doesn't like this either.
The T/A states that IF the pilot pension is turned over to the PBGC, a new pension will be put in place. The PBGC HATES this and has come out and said that it would be a dangerous precendent and that they WILL take appropriate steps.
The PBGC is well aware of the T/A and its most interesting point that states:
Company will not terminate and will oppose efforts to terminate
prior to the earlier of May 1, 2005 .


So your bottom line point about getting the pensions is moot. If the T/A passes UAL mgt gets to dump the pension debt while the UAL pilots get a new pensions and the PBGC gets left holding the pension bag and the billions of dollars of debt. Not to mention the very real possibility that this would set the legal precedence for not just every airline but every company with underfunded pension debt. Yeah, that's going to happen. Now we are talking big numbers way beyond the $140 mill you refer to

If the T/A passes, by trying to take over the pilots pension they will still get the pensions but they be forcing UAL into liquidation(read on). This inturn get the PBGC a chance at some much needed cash to cover the pension defecit and it will be tellingl every other company with an underfunded pension, "don't try dumping it on us, or else"

What do you think an opposition to the PBGC planed take over by UAL mgt will lead to? Something good? No, Liquidation.


In order to take over the pilots pension, the PBGC must prove in court that the current UAL mgt plan to exit BK is not a valid option and that they are the best option for the pilots pension. They have to prove this in BK court, which is what they have set forth to do. If they prove their point they have inessence told the court, the creditors and the world that the US gov does not believe UAL can restructure

ALPA's take:
"As the P.B.G.C. is well aware, there are no grounds for the termination of the pilot pension plan," the statement said. If United does oppose immediate termination, it added, the process would move to bankruptcy court, which would end the plan only if it determines that the airline could not survive otherwise.

Liquidation


"The pension agency hopes to assume the plan before additional pilot benefits acrue, reducing the agency's potential liabilities by $140 million.
If they wanted to save some money, they could have went after the pension last year. Why did they choose this week? They want to influence the out come of next weeks T/A. Why?

The agency also hoopes taking the plan would give UAL greater room to keep its other three pension plans."
Because, they know that if it passes it is going to be impossible to seperate the pilots pension from the other labor groups because of the "me too" clause of the T/A

Maybe you can show me anywhere the head of the PBGC has said his qasi government agency is going to liquidate United, or has the authority to do so.

Are you kidding? When is a government official ever allowed to come out and say he favors the liquidaton of a major corporation. Think about the political ramifications, he can't ever come out and say it directly
BUT he can lead the horse to water.

 

[skykid]

A better case of mixing apples and oranges with snippets of political, union, mgmt., and newspaper rhetoric could not have been made. Bravo.

Apparently I'm not the only one who is puzzled by G4G5s arguement. Happy new year! Take care.

 

[G4G5]

Traceport,
See if the above post is eaiser to follow, New Years is not the best time to be writting a post like this, if you get my drift.


Furthermore, UAL is NOT making a promise for a new defined BENEFIT plan with the new TA (UNLIKE the LTV steel case where LTV distress terminated their defined benefit plan only to offer a new one a couple years later. In this case, UAL is NOT offering a new defined BENEFIT plan- they are offering an additional % to a defined CONTRIBUTION plan....a plan that they are showing they can still make without breaking current minimum cash requirements stipulated by the Creditors and approved by the court)

This is what has the PBGC so angry.
Take a close look at this part of the T/A:
Pension Contributions:
Current 9 % B Plan continues,
C Plan defined as an additional 6% contribution to PDAP,
Optional - the January 01, 2008 1.0% pay raise can be converted to a C Plan contribution making it a total of 7% at the MEC's option.
If a new DB plan is started for any employee group, Pilot group
has the option to continue CPlan or accept comparable plan

The PBGC has come out and said that this is a dangerous precedent and they WILL oppose it.

They are in essence saying you can not dump your underfunded pensions only to start up a new one. Anyone who think that the PBGC will let UAL just dump their debt on the government is kidding themselves. Just by the very nature of this T/A the gov must go on the offensive and nip this in the butt once and for all.
What happens if they allow this and take on the UAL pensions. The PBGC is looking at a massive pension dump by every under funded pension in the country.

 

[WillowRunVortex]

It comes from you, the tax payer.

Please tell me that I wont be contributing to some retired United pilot's pension with my tax dollars?

 

[bpapaDC8]

[font=ARIAL,]First of all, the taxpayers are not out even one dime as of yet. The pensions are paid by contributions from companies in the plan, not by taxes. There is the possibility of taxpayer money being involved if the PBGC can no longer pay out to those participants who are covered in the future. That is not an absolute either, as contributions can also be increased.to keep the PBGC solvent.

Most pensions that are terminated and go into the PBGC, are adjusted and payments to retired employees are generally reduced significantly. Most employees get far less than what they would have gotten had their plan not been terminated. Recently retired or retiring pilots would see the $28,000 figure mentioned previously..

This plan was set up because of employees who had had their pensions looted by management and were left with nothing. At least this program offers some minimal protection for people who have worked 20 or 30 years or even longer, and then wound up with nothing.[/font]