Joint Position Paper On Pension Reform

[mjk]

AMERICAN AIRLINES, THE ALLIED PILOTS ASSOCIATION, THE ASSOCIATION OF PROFESSIONAL FLIGHT ATTENDANTS AND THE TRANSPORT WORKER'S UNION ISSUE JOINT STATEMENT REGARDING DEFINED BENEFIT PENSION PLAN LEGISLATION

FORT WORTH, Texas - Today, American Airlines and the presidents of the three labor unions representing AA pilots, flight attendants, aircraft maintenance technicians, plant maintenance employees, fleet service employees, ground service employees, technical specialists, flight dispatchers, stock clerks, flight simulator technicians, ground school, flight simulator and pilot simulator instructors at American jointly issued a statement regarding defined benefit pension plan legislation:

"We support pension reform that does not discriminate based on the credit rating of the plan sponsor, and that better protects employees' retirement benefits by making it more flexible and affordable for companies to fund them, by:

1. Maintaining the flexibility to continue defined benefit plans as an effective means to provide retirement security.

2. Reasonably extending the number of years companies would have to make up the unfunded portions of their plans.

3. Setting reasonable interest rates to determine plan liabilities.

4. Providing simpler, better, and more timely disclosure of important pension plan data.

5. Providing an increase in permitted contributions.

6. Supporting the concept that benefit plans be charged risk adjusted premiums by the Pension Benefit Guaranty Corporation (PBGC).

We support a ban on preferential funding of Supplemental Executive Retirement Programs while the minimum contributions are not being made to the corporate defined benefit plans.

We also support legislation that would provide pension relief to companies that freeze their plans through the collective bargaining process, in accordance with the principles above, rather than terminating them in bankruptcy."

When the men and women of American Airlines consensually restructured their wages, work rules and benefits in 2003 to deliver the savings needed to avoid bankruptcy at the time, they chose to do so in a way that allowed them to preserve their defined benefit pension plans. And, despite difficult economic challenges, the company continues to meet its pension funding obligations. These actions demonstrate that companies must try to protect the retirement benefits that have been promised to their people. To do this, American must continue to work collaboratively with all stakeholders under its Turnaround Plan to return to profitability. This also underscores the need for reasonable pension reform legislation that better and more fairly protects employee retirement benefits by making it more affordable and flexible for companies to fund defined benefit plans.

<signed by Arpey and the presidents of all three unions>

Information about APA
Founded in 1963, APA is headquartered in Fort Worth, Texas. The APA currently represents over 13,000 pilots. There are currently 2,819 American Airlines pilots on furlough. The furloughs began shortly after the September 11, 2001 attacks. Also, several hundred American Airlines pilots are on full-time military leave of absence serving in the armed forces. The union's Web site address is www.alliedpilots.org.

Information about APFA
The Association of Professional Flight Attendants (APFA) is the largest independent Flight Attendant union in the nation. It represents more than 25,000 Flight Attendants at American Airlines, including 4,240 Flight Attendants who have been on furlough following the events of 9/11. Visit online at www.apfa.org.

Information about TWU
Founded in 1934, the TWU represents nearly 125,000 workers in the nation's transportation industries, including 55,000 workers in the airline and government service industry in virtually all Class and Crafts. The Airlines Division represents 42 Locals 59 labor contracts. The Airline Division website is www.twuatd.org.

Information about AA
American Airlines is the world's largest airline, with a fleet of over 700 aircraft serving more than 250 cities in over 40 countries with more than 3,800 daily flights. American employs over 85,000 people worldwide.

 

[Hopeful]

One has the wonder about the timing of this statement. What if pension legislation fails?
Why the statement now? First TULE must come up with $500,000,000.00 in savings, now a joint statement regarding pension reform?

Will AA be the only kid left on the block with a defined pension plan?

Fuel reaching new highs every day....hmmmmmmmmmmmmmmmmmmm.


Get ready boys and girls!

 

[NewHampshire Black Bears]

One has the wonder about the timing of this statement. What if pension legislation fails?
Why the statement now? First TULE must come up with $500,000,000.00 in savings, now a joint statement regarding pension reform?

Will AA be the only kid left on the block with a defined pension plan?

Fuel reaching new highs every day....hmmmmmmmmmmmmmmmmmmm.
Get ready boys and girls!

[post="256364"][/post]​

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

Hopeful,
I don't trust HDQ, as far as I can throw them, and I know you know that.

But as far as the fuel prices going "into the statosphere", I say GOOD !!
This should FINALLY clean out the deadwood carriers, while the VERY few stronger ones benefit.
(Disclaimer: "I, NH/BB's DID NOT create the LAW OF THE JUNGLE")

NH/BB's

 

[MCI transplant]

<_< Last week the oil Minister of Saudi Arabia said there was no shortage of supply of oil, but that there was a shortage of refining capacity in the west that was driving up prices! It seems years ago there was a small Airline based on the west coust call PSA, Pacific Southwest AirLines! It owned it's own refinery! Maybe US Airways wouldn't be in the predicamint their in if they hadn't sold it off after buying PSA!!!!! Your thoughts ?????

 

[Checking it Out]

I see the Unions are making every effort to hold the line on Retirement benefits. Keep up the great job!

 

[Bob Owens]

Well now the unions are calling for "Flexibility".

Well after the debacle with pensions at Pan Am, where they had the flexibility to defer payments, that were never made, the government cracked down and made things stricter in order to protect pensioners.

Now the TWU and a few other misguided unions are calling for the government to repeal the strict standards that were put in place to protect our pensions. Is this what we really want?

Do we really want to defer pension payments so the company can use the money to buy new 777s, 767s and continue on their Taj-Mahal projects at JFK and MIA?

By deferring the payments, as Pan Am did, what we could end up with is the company building up a huge delinquincy prior to bailing out, in the end we will pay for it through reduced pensions down the road.

 

[AMFAMAN]

"We support pension reform that does not discriminate based on the credit rating of the plan sponsor, and that better protects employees' retirement benefits by making it more flexible and affordable for companies to fund them, by:

1. Maintaining the flexibility to continue defined benefit plans as an effective means to provide retirement security.

2. Reasonably extending the number of years companies would have to make up the unfunded portions of their plans.

3. Setting reasonable interest rates to determine plan liabilities.

4. Providing simpler, better, and more timely disclosure of important pension plan data.

5. Providing an increase in permitted contributions.

6. Supporting the concept that benefit plans be charged risk adjusted premiums by the Pension Benefit Guaranty Corporation (PBGC).

We support a ban on preferential funding of Supplemental Executive Retirement Programs while the minimum contributions are not being made to the corporate defined benefit plans.

[post="256361"][/post]​

Let me get this straight, the unions are supporting the lowering the minimum required funding. Management promises to not have SERP's unless the minimums are met. Looks like those minimums will be met with ease with lower required fundings they have propesed in the newspapers. So management will get their SERPs without a word said by the unions and the employees pensions will be barely funded. What a concept???

 

[AMFAMAN]

I see the Unions are making every effort to hold the line on Retirement benefits. Keep up the great job!

[post="256494"][/post]​

Since when has "holding the line" been holding hands with management and singing Kambaya. Must be the twu version of "hold the line," holds hands with the one who has been screwing you for years.

 

[Wretched Wrench]

Get ready. There will be big changes. The deals have already been made.

 

[Skyyggoddess]

I smell a rat. I can't tell if it is an APFA rat or an AMR rat, but its a rat.
A rat is what's born when our union gets in bed with AMR.

 

[WingNaPrayer]

NW/DL Cry Wolf . . .



MIAMI -- Near-record fuel costs are adding urgency to a push by several large airlines to win some relief from their massive pension payments.

Delta Air Lines Inc. (DAL) executives and employee representatives Thursday lobbied lawmakers in Washington, seeking support for legislation that would let airlines stretch out their pension payments over as many as 25 years, giving financially struggling carriers breathing room as they try to restructure their operations and stem steep losses. The airlines would also be able to negotiate with their unions to freeze their plans and switch younger workers to cheaper 401(K) plans, such as Delta has already done with its pilots.

Delta is joined by Northwest Airlines Corp. (NWAC) in leading the push for the legislation, which airline officials say would help the airlines keep their pension promises to employees, and possibly avoid having to turn to a taxpayer- funded bailout by government insurer Pension Benefit Guaranty Corp. On Wednesday, AMR Corp.'s (AMR) American Airlines and its unions announced they would seek congressional help to save the airline's pension plans by lengthening the time companies have to make up the unfunded portions of their plans. The Air Line Pilots Association has also deployed its leaders to support some type of legislative help for the airlines.

Gerald Grinstein, Delta's chief executive, recently won the support of Sen. Johnny Isakson, (R., Ga.) who sits on the U.S. Senate's Health, Education, Labor and Pensions committee, which will likely consider proposed pension reform legislation in the next two weeks.

Sen. Isakson, in an interview, said he was moved to help because of the worsening financial shape of many airlines. "It's a bigger problem right now than even the cost of fuel," he said. He added that he was encouraged that Delta and Northwest were pursuing a plan different from that pursued by rivals such as UAL Corp. (UALAQ) and US Airways Group Inc. (UAIRQ), which have moved to dump their pensions on the PBGC.

The PBGC has filed requests with federal courts seeking to take over two of United's four pension plans that cover pilots, ramp workers and mechanics. The airline wants to eventually rid itself of all four plans under its current bankruptcy reorganization. US Airways has turned over four pension plans to the PBGC in its two bankruptcies.

The airlines, which have underfunded pension obligations of about $21 billion, face several problems as they try to get relief.

Bush administration officials are pushing a massive pension reform proposal that would, among other things, force companies with poor credit ratings to pay more into the PBGC insurance fund. Airline officials, who oppose that proposal, will be busy fighting that while pursuing their own fix.

"The president's proposal is a death sentence for the airlines' pension plans, " says Andrea Fischer Newman, Northwest's vice president, government affairs. " We believe we have a responsibility to pay the money we've promised our employees. We're asking Congress for time to fund the underfunded plans."

Another problem is that some members of Congress have expressed little patience for legislation that would apply only to airlines. And having passed a pension relief bill in 2004 that gave airlines a two-year reprieve that cut their payments temporarily, some legislators may not be pleased to see airline executives and their lobbyists at their doors again so soon.

That is why Delta has enlisted the support of its employees and retirees, including the Delta Air Lines Retiree Committee, which represents the airline's nonunion retirees. Cathy Cone, a retired Delta flight attendant who heads the committee and who has met with legislators, says, "We're not asking for one penny from the government; all we're asking for is more time."

Meanwhile, there is also the problem of competitor airlines, such as AirTran Holdings Inc. (AAI), which don't have same pension troubles, lobbying against legislation that they term a bailout.

"It's not a bailout," says D. Scott Yohe, Delta senior vice president, government affairs. "It's a very pragmatic solution to a problem that properly balances all the interests involved: the company, its employees and the government."

The recent surge in oil prices has sent airlines scrambling for any help they can get.

For Delta, which has $450 million in pension payments scheduled this year, one additional problem is that the pension relief could well come too late. The company's recent regulatory filings suggest the company may find itself in a cash crunch by the end of the year. Any pension help would likely take effect after that.

"There's a real risk that even with a dramatic pension overhaul, Delta would still face unsustainable liquidity pressures by the end of 2005," says William Warlick, airline analyst at Fitch Ratings.

 

[Boomer]

The only two linchpins needed to get the rank and file to join the chorus are the requirements that:

1) All Union Paid Pensions for Union Representatives and Airline Executive Pensions are subject to the same reductions as hourly airline workers if and when their pensions are reduced due to pension freezing and/or PBGC assumption of pension liabilities; and,
2) All Union Paid Pensions for Union Representatives and Airline Executive Pensions are subject to a priority claim with the airlines as secured claims against the assets of the corporation if and when the airlines claim bankruptcy.

Unions will not demand payment terms that are unrealistic and unsupportable while management will not manage the enterprise into the ground because both will have the same gun held to their heads that they wield against each other.

The hourly workers will have a pension they can count on because default will cripple both the Union that bought it and the CEO's that sold it.

 

[Skyyggoddess]

APFA better not even think about doing this as a "side letter of agreement." If these changes are not voted with a 30day paper ballot (as guaranteed by our constitution) we will bring suit against each and every APFA person who signs off on this. That is a promise.