Aa Pension

[mweiss]

But look at a broader picture for a moment.

The Treasury would have borrowed the same amount of money anyway. It's pretty clear that this is the case. So the choice is between:

A. Keeping the surplus in cash, where it wouldn't grow, and paying the interest on the securities to investors.
B. Investing the surplus in the securities, so it would grow, and paying the interest on the securities from one branch of government to another.

The cost to the taxpayers is the same...until you take into account the smaller Social Security surplus at the end. Then the cost to taxpayers rises, or the benefits fall, relative to what we will have in the current model.

I'm not saying that there weren't elements of sleight of hand. In particular, somehow Congress decided that a loan to another branch of government doesn't count as deficit spending from the general fund. I'm just saying that it's also not as bad as many have made it sound.

 

[FWAAA]

FWAA or FormerModerAAtor,

Will either of you please give the required contribution amounts that AA WOULD HAVE been required to FULLY FUND the Union Pension plans HAD Sen. Kennedy, D-MA, not pushed S.2282 through?

[post="239537"][/post]​

I don't have the precise numbers in front of me, but I have to ask: What's that got to do with anything?

In 2004, AA contributed the amount the law requires ($461 million), compared to almost zero at UAL and US. Yes, Congress reduced the amount required by law, but so what?

IIRC, AA said that 2004 minimum contributions would have been about $200 million more without the pension relief.

Keep selling your brand of FEAR by scaring everyone into believing that AA is gonna cancel its DB plans, despite the complete absence of evidence. No skin off my nose. B)

 

[eolesen]

2003's contribution was around $600M. 2004's was around $400M. More info should be available on that tomorrow when FY2004 financials are released.

One of the recent news articles I read indicated that the pilot plan was 83% funded, and if rates of return continue to improve, it (and other plans) could easily move back into being almost fully funded (or even over-funded) during 2005.

 

[Boomer]

I don't have the precise numbers in front of me, but I have to ask: What's that got to do with anything?

In 2004, AA contributed the amount the law requires ($461 million), compared to almost zero at UAL and US. Yes, Congress reduced the amount required by law, but so what?

IIRC, AA said that 2004 minimum contributions would have been about $200 million more without the pension relief.

Keep selling your brand of FEAR by scaring everyone into believing that AA is gonna cancel its DB plans, despite the complete absence of evidence. No skin off my nose. B)

[post="240089"][/post]​

AAWF,

1) It has everything to do with the employee trusting the employer. You and AA saying that you fully funded the pensions plans without revealing that those funding requirements were reduced by at least a third, and, on a temporary basis is enough to cause grave concern.

2) I never stated that AA would terminate the DBP. I said that outside of BK, AA would seek Union approval for a freeze.

3) When I intially raised the issue regarding S.2282, your response was that it had not actually been signed into law and thus was nothing to worry about: now you change the issue.

 

[Boomer]

That Senator must have some pull to push through anything being that he is a minority Democrat with a Republican controlled Senate, House and Executive!

[post="239654"][/post]​

----------------------------------------------------------
Bob,
From what I have been able to gather below, there is no difference between the Democrats and Republicans when it comes to screwing over airline workers. As AA and the TWU are fond of saying, this event was the result of a “perfect storm.â€￾ The perfection in the storm lay in the interests each of the parties had with respect to passage of the bill.

S.2282 passed with flying colors among both Republicans and Democrats because both parties wanted the issue "off the table," during the general election. In essence, postponing "judgment day" to the mid-year elections or possibly making the issue irrelevant. But, like the Savings and Loan debacle, which this boondoggle stands to double; everyone was warned by the PBGC prior to making the decision.
Director, PBGC: Senate Testimony March 11, 2003
Director, PBGC: House Testimony April 30, 2003
Director, PBGC: Senate Testimony October 8, 2004


Sen. Kennedy had a choice to make when it came to sponsorship of the bill: he could have filibustered its passage and allowed Kerry to take it up as a main issue in the general elections. This is not the first time that the good Senator from Massachusetts has decided to gaff the working stiff: Sen. Kennedy was a force behind the deregulation of the airline industry and inclusion of “labor protective provisionsâ€￾ within the ADA of 1978 that were never funded.
Kennedy, Carter and Airline Deregulation
Shortfunding the Labor Protective Provisions of the Airline Deregulation Act

But Kennedy was not alone, look at the co-sponsor to the bill, the Minority Senate Leader, Tom Daschle, D-SD. Sen. Daschle’s’ wife is a highly paid lobbyist with a firm that has AA among their client list. Daschle Married to Influential AIrline Industry Lobbyist

That brings us back to the unquestioned allegiance between the AFL-CIO and the Democratic party, and, why it is ultimately bad for the worker. The AFL-CIO and Union Leadership refusal to make Democrats pay the price for the passage of bills that hurt working people has made them irrelevant to the process. If the AFL-CIO and the Union Leadership put labor squarely in the middle and "giveth or taketh away" based on actual deals done, versus platitudes; we would reward those that help and hurt those that do not.

As it stands, labor does neither. We are the barking dog left on a chain, irritating but not dangerous.

The continuation of power is what most that possess it seek. The only thing that voters can really do is to take away the power of those we elect by refusing to re-elect them. The doddering politburo atop the Unions and the AFL-CIO have come to identify with those that harm us. They get Stockholm Syndrome and we get the personal finance version of the China Syndrome.

 

[goingboeing]

They will threaten the pension just to try and force another round of wage and benefit cuts. Anybody who doesn't think AMR won't ask for more concessions now is either DUMB or STUPID or BOTH. :wacko:

[post="236698"][/post]​

I agree and after Carty/Arpey hit paydirt the last time they would be stupid to not come back and ASK/THREATEN C 11 for MORE concessions.

 

[FWAAA]

Here are the amounts (in millions) that AMR contributed to its DB plans in the past several years:

2004: $461
2003: $333
2002: $481
2001: $250
2000: $173
1999: $179
1998: $144

Had Congress not granted relief that reduced 2004 minimum contributions, AMR estimated that it would have had to contribute about $614 million to its plans in 2004. Due to the changes in law, AMR had to contribute only $461 million in 2004.

Good news for AMR employees: As of today, AMR has already contributed $42 million to its plans in 2005:

While these accomplishments were not enough to overcome a difficult environment, they did enable American to finish 2004 with more than $3.4 billion in total cash and short-term investments (including $478 million in restricted cash and short-term investments), Arpey said. American continued to make payments to all of its pension programs in 2004, contributing $461 million to its defined benefit plans. These payments, on top of those made in recent years, have helped improved the funded level of the defined benefit plans from a low of 72 percent in 2002 to about 80 percent at the end of 2004. Since the beginning of 2005, American has contributed a further $42 million to its defined benefit pension programs.

http://biz.yahoo.com/prnews/050119/daw007_1.html

A mere 19 days into 2005 and AMR has already contributed $42 million. Yep, AMR is gonna cancel the plans. Keep 'em coming.

As Former ModerAAtor pointed out, if interest rates continue to rise (as nearly everyone thinks they will), before too long, AA's plans could be fully funded, and perhaps even overfunded.

Add to that the possibility that equity markets will continue to advance, and full funding is very likely within a short time.

Nevertheless, there are a few shrill voices out there who seem upset that AA wasn't forced to contribute even more when it was hurting the most. Amazing.

AMR continues to fund its plans yet its rank and file seem more pissed at AMR than at UAL and USAir, who shirked their obligations to their employees.

When the facts aren't on your side, just keep selling fear. B)

 

[Boomer]

FWAAA,"Had Congress not granted relief that reduced 2004 minimum contributions, AMR estimated that it would have had to contribute about $614 million to its plans in 2004. Due to the changes in law, AMR had to contribute only $461 million in 2004."

So, had the Kennedy-Daschle Airline Lobbyist bill not been passed; AA would have been on the hook for another $159,000,000.00.

In other words, AA only had to pay 66.8% of what they owed for 2004.

But, you and the compAAny claimed that you had fully funded the required pension contributions.

If I pay the TWU only 66.8% of my Union dues for an entire year; they will see to it that AA fires my butt.

If I only give AA 66.8% of my time for an entire year, they will see to it that my butt is fired.

Butt: you, AA and the TWU see fit to call a 66.8% fulfillment of your contract with me as being payment in full. My Butt!

 

[FWAAA]

Boomer: Whatever.

🙄

 

[FWAAA]

AMR's 2005 required minimum contributions to the pension plans are estimated at $310 million.

So far, AMR has already contributed $42 million of that $310 million.

Yes, this is less than they would have been in the absence of change in law. 🙄

 

[Hopeful]

A little info for AMR employees. Next time you go into JETNET, go to BENEFITS and PAY. In there is a link for TOTAL VALUE. It tells you how much the company pays for each aspect of your benefits. It is tailored to each employee. It tells what the company paid into for your medical, dental, wages, social security.

Take a gander at the pension contribution. It's quite a large piece of the pie chart there.

If anyone believes that AA will not seek to end the tradional defined benefit pension plan while the other airlines are getting bankruptcy judges to do it for them, really needs to see what's going on.

Arpey already stated that AMR cannot be at a competitive disadvantage. Tru we have the lowest costs, but why should we get to keep our pensions when ever other airline is sheeding them.

 

[FWAAA]

A little info for AMR employees. Next time you go into JETNET, go to BENEFITS and PAY. In there is a link for TOTAL VALUE. It tells you how much the company pays for each aspect of your benefits. It is tailored to each employee. It tells what the company paid into for your medical, dental, wages, social security.

Take a gander at the pension contribution. It's quite a large piece of the pie chart there.

If anyone believes that AA will not seek to end the tradional defined benefit pension plan while the other airlines are getting bankruptcy judges to do it for them, really needs to see what's going on.

Arpey already stated that AMR cannot be at a competitive disadvantage. Tru we have the lowest costs, but why should we get to keep our pensions when ever other airline is sheeding them.

[post="240897"][/post]​

It is a large piece of the pie, but then again, so are health plan expenses. Does that mean that AMR is gonna cancel the health plan? After all, AA spends far more on the health plan per employee than on the pension contributions.

If you could look at the WN JETNET equivalent, you would see that retirement plan contributions are an even larger piece of the pie at WN than they are at AMR.

WN spends a larger proportion of its revenues on its DC retirement plans than AMR spends on its employee retirement plans. Is that evidence that WN is gonna cancel its DC retirement plans?

WN already pays its pilots more per hour than AA. WN mechanics (the lucky few WN actually employs inhouse) make much more than AA mechanics. Don't know about other work groups, but I suspect similar results if someone takes the time to analyze each contract. Does that mean WN is on the verge of demanding concessions? Nope.

AMR's 2004 spending on catering (ice, soda, beer, wine, liquor, food and snacks) dwarfed its spending on employee pension contributions. And that's after years of trimming that line item.

And thanks to the concessions, AMR's pension contributions are even more affordable. Less hourly wages = smaller pension contributions. Last year, $461 million in pension contributions. This year, only $310 million or so. Compared to WN's retirement plan spending, actually very affordable.

Still no evidence that AMR is gonna cancel the pensions. On the other hand, there is some evidence that AMR isn't gonna cancel them.

$42 million already contributed in the first 19 days of 2005.

Nearly $3 billion of unrestricted cash in the bank on 12/31/04. Gonna file Ch 11 to jetison the pension? Pure fantasy. Review the events of 24 months ago to see just how far AA's managers will go to avoid filing Ch 11. Now, all of a sudden, they're gonna do a 180 on that position? Uh-huh.

Earth to everyone laboring under such delusions!

As mentioned in the conference call Wednesday, if interest rates continue to climb back to normal levels (instead of their historically low rates of 2002-2004), AMR's plans will soon be close to fully funded. And fully funded plans are actually not too expensive. Want proof? Here's AMR's pension contributions in millions of dollars for the past few year. Notice how cheap the pensions were when the plans were fully funded (pre-September 11):

2004: $461
2003: $333
2002: $481
2001: $250
2000: $173
1999: $179
1998: $144

UAL and US didn't cancel their pensions just because they needed to lower their ongoing labor costs; they canceled (are in the process of canceling) their plans because they simply lacked the money to make up the deficiencies. AMR didn't lack that money and has funded much of the underfunding. See the large contributions 2002-2004?

But feel free to keep harping that AMR is gonna cancel the pensions in the absence of evidence to support the fear. Perhaps if enough represented employees say it often enough, some AMR manager is gonna take advantage of that fact and suggest concessions that really aren't necessary. B)

 

[Hopeful]

We'll see!

 

[Boomer]

FWAAA,

Again, I see the threat to my DBP as being the continued collusion between the TWU and AA through the mechanism of the Overland Hospice Workers. The compAAny will seek some type of pph, (price per hour), reduction in our cost structure and the TWU will offer an either or presentation to the membership. Either you accept a decrease in your pay or a freeze in your pension and a conversion to a DCP.

Everytime we see a member of the TWU International, they defend their "without further ratification," ratification of the AA Concession PlAAn. We are now seeing the Vermont PlAAn implemented, even though we gave the compAAny more than the AAsked.

We still have AFW and TULE operating at less than full capacity: costing the compAAny more money than is necessary, while MCIE is kept open even though everyone knows that that base has open EPA issues.

I have been told that AA knows these issues are real but continues the current situation because it is bait for the eventual freezing, outside BK, of our DBP plan with the real assumption that all of MCIE and most of TULE will vote for it.

 

[PRINCESS KIDAGAKASH]

Our pensions are history!