Are We Next?

[AAquila]

Faces In The News
Tilton: UAL Decision To Scrap Pension Plans Is Not Negotiable
Chris Noon, 04.12.05, 7:11 AM ET

I feel your pain? UAL (otc: UALAQ - news - people ) says it "shares its employees' frustration" but Chief Executive Glenn Tilton is not backing down from cutback plans for United Airlines. Yesterday he reiterated that UAL must scrap the pension plans of unionized employees and win new labor contracts if the carrier is to get financing to exit bankruptcy. Tilton is still shackled by escalating fuel prices-- which show no sign of abating-- but is taking a hard line with staff. If mechanic and machinist unions don't agree to pay cuts and other changes by May 11, UAL will go ahead and replace existing pensions and tear up collective bargaining agreements. Tilton believes UAL needs to reduce costs enough to assuage banks' fears before they shell out $2 billion to $2.5 billion in exit financing. In addressing the City Club of Chicago, Tilton held the Air France-KLM (nyse: AKH - news - people ) merger up as a financial model and refuted the notion that a carrier needs to go out of business for the industry to improve: "That's simply not going to make things better for everyone." Unions are threatening to strike if UAL's wage cuts are imposed in court without reaching agreements with employees. The Association of Flight Attendants has already threatened to tear up its own cost-saving deal with UAL, accusing company leaders of failing to demonstrate that they have cut their own salaries as promised.

Forbes.com
:down:

 

[FWAAA]

Not likely. AA is still funding its pensions and is in much better shape than UA, which hasn't funded its pensions for over a year now.

Several AA employees post here as seriously embittered, but overall, AA's workers are nowhere near as bitter as employees of UAL or USAir, and it's kinda obvious why that is so: AA hasn't kept going back to the well over and over (just the one painful time in 2003). Meanwhile, the bankrupt carriers keep demanding concession after concession and now have eliminated (or are in the process of eliminating) all their DB pensions.

For now, at least, as a percentage of revenue and as a percentage of employee comp., AA's DB pensions require less cash flow right now than do the various DC plans at Southwest. It's been that way for several years now, and AA will probably get Congress to go along with relaxed funding rules that will keep it that way for the future.

Add to that the higher interest rates that continue to close the "underfunded" nature of AA's plans, plus higher equity values, and it is fairly clear that although AA might someday cancel the plans (freeze them and replace them with DC plans), that day is not just around the corner. No matter how many times someone starts a topic here asking that same question. B)

 

[B6Busdriver]

Not likely. AA is still funding its pensions and is in much better shape than UA, which hasn't funded its pensions for over a year now.

B)

[post="261919"][/post]​

I hope you guys don't lose your pension as the floks at my previous employer did. This all started with the steel industry now the airlines with the automakers next. GM has been rumbling about their pensions. It's not looking good for the defined benefit programs anywhere. I hope I am wrong.

 

[NewHampshire Black Bears]

The last (twu) union meeting reveled that AA and the union were in preliminary talks on an aggreement on pension reform.

Any earned "DB" by employees, would be honored, and whenever "some sort" of 401K W/match kicked in, that would constitute pension reform.

It's in the "very early stages" of being talked about, but it made sense to me.

Naturally, anyone retired, or retiring soon, would fare somewhat better than an employee, with a lot of years, but too young to "get out".

Stay tuned !!


NH/BB's

 

[Fly]

Several AA employees post here as seriously embittered, but overall, AA's workers are nowhere near as bitter as employees of UAL or USAir, and it's kinda obvious why that is so:

[post="261919"][/post]​

If UAL folks are so bitter and AA folks are so happy, why did United place as one of only four airlines in the top spot for customer service, and the only major airline that had an increase in customer satisfaction (as opposed to AA who's customer satisfaction rating declined?)

But keep telling yourself that if it makes you feel better. In the mean time, I'll keep giving incredible customer service.

 

[whlinder]

In the mean time, I'll keep giving incredible customer service.

[post="261944"][/post]​

If you look anything like your avatar, we can all be sure that you will give incredible customer service.

 

[eolesen]

The last (twu) union meeting reveled that AA and the union were in preliminary talks on an aggreement on pension reform.

Any earned "DB" by employees, would be honored, and whenever "some sort" of 401K W/match kicked in, that would constitute pension reform.

[post="261935"][/post]​

I'd be surprised if there weren't talks going on with all the unions regarding a freeze.

Naturally, anyone retired, or retiring soon, would fare somewhat better than an employee, with a lot of years, but too young to "get out".

[post="261935"][/post]​

Depends on if they already have a 401K set up or not. If you have both, it shouldn't be a problem. Those who haven't opened up something in addition to a pension and social security will fare slightly worse.

Retirement planning isn't something you do in your 40's -- you have to do it in your 30's at the latest. Ask anyone who didn't set up a college fund for their kids until they were in middle school....

If you haven't already set up something in addition to your pension and social security, I'd recommend taking the entire step increase that's coming up in May, and putting it into a 401K or other form of retirement fund. You're already used to your current paycheck, plus with a 401K, it's tax deferred. It's a lot harder to make up for it later.

Because I've done both, I know I'll be getting more per month from my 401K than I will from my pension. Combined, they're a fairly comfortable income, albeit in today's dollars. I'm not even considering Social Security income, since it probably won't exist as we know it today...

 

[NewHampshire Black Bears]

"E", your right, I meant to say, "all the unions on the property !!

NH/BB's

 

[Bob Owens]

  AA hasn't kept going back to the well over and over

[post="261919"][/post]​

Thats right, they drained it dry all in one shot. They took more than they needed just because they could.

The fact is that USAIR and UAL still have not caught up in concesions to what AA got.

 

[Boomer]

I'd be surprised if there weren't talks going on with all the unions regarding a freeze.
Depends on if they already have a 401K set up or not. If you have both, it shouldn't be a problem. Those who haven't opened up something in addition to a pension and social security will fare slightly worse.

Retirement planning isn't something you do in your 40's -- you have to do it in your 30's at the latest. Ask anyone who didn't set up a college fund for their kids until they were in middle school....

If you haven't already set up something in addition to your pension and social security, I'd recommend taking the entire step increase that's coming up in May, and putting it into a 401K or other form of retirement fund. You're already used to your current paycheck, plus with a 401K, it's tax deferred. It's a lot harder to make up for it later.

Because I've done both, I know I'll be getting more per month from my 401K than I will from my pension. Combined, they're a fairly comfortable income, albeit in today's dollars. I'm not even considering Social Security income, since it probably won't exist as we know it today...

[post="261955"][/post]​

------------------------------------------

It was actually the Pilots' Union that first went to AA and offered a 5 year freeze as a future hedge against further concessions; the rest of the unions followed on after learning of the Pilots' offer.

The various plans for a freeze for some and conversion to a DCP runs afoul of legal precedent:
1) Conversion of Defined Benefit Plans to Cash Contribution Plans necessarily discriminates against a certain class of workers due to time limitations.
Cooper v. IBM ; and,

2) With respect to the Civil Rights Act and other Federal Laws, Plaintiff Need Not Prove Intentional Age Discrimination, If the Outcome Of An Employer Policy Supports That Finding.
Smith v. City of Jackson

 

[will fix for food]

Didn't the company offer the TWU a plan a few years back where any new hire would have the choice of a pension or 401K match? I seem to remember this was about the time of the contract negotiations. IIRC the TWU reply was something along the lines of FU.

I'm kind of hazy on the details, does anyone remember something like this?

 

[AMFAMAN]

Didn't the company offer the TWU a plan a few years back where any new hire would have the choice of a pension or 401K match? I seem to remember this was about the time of the contract negotiations. IIRC the TWU reply was something along the lines of FU.

I'm kind of hazy on the details, does anyone remember something like this?

[post="262043"][/post]​

Don't know of any offer to the twu but this is what happened to the non-union workers, at least the lower level ones.

 

[Wretched Wrench]

Depending on the numbers, a matching 401k can be better than a defined benefit pension.

One major advantage is that it can't be stolen.

 

[NewHampshire Black Bears]

Depending on the numbers, a matching 401k can be better than a defined benefit pension.

One major advantage is that it can't be stolen.

[post="262053"][/post]​

+++++++++++++++++++++++++++++++++++++++++++++++++++

"WW",
The key word is "CAN" !!!

Right again, "It can't be stolen" !!

However,
IT CAN BE "GAMBLED" (Think stock market)

NH/BB's

 

[Hopeful]

If UAL folks are so bitter and AA folks are so happy, why did United place as one of only four airlines in the top spot for customer service, and the only major airline that had an increase in customer satisfaction (as opposed to AA who's customer satisfaction rating declined?) 

But keep telling yourself that if it makes you feel better.  In the mean time, I'll keep giving incredible customer service.

[post="261944"][/post]​

Right, keep giving em 100% and take care of those passengers. That is an admirable quality.
But while you are giving them 100% and incredible customer service, the airlines are taking more and more away from the employees. Have you thought about your future with no pension or a greatly reduced substitute? How about now, less wages, paying more for healthcare?

You'll be giving them 100% when your're 70 years old, and unlike your avatar, your breasts will be hitting your knees and you'll still be working!