MEC CODE-A-PHONE UPDATE
March 22, 2003
This is Roy Freundlich with US Airways MEC update for Saturday, March 22, with three new items.
Item 1. The Negotiating Committee presented the MEC with tentative agreements yesterday evening on LOA 85, Pilots Defined Contribution Plan and LOA 86, Adjustments to Restructuring Agreements.
The MEC ratified both letters of agreements by passing the following resolution:
WHEREAS the Company’s Plan of Reorganization and ability to emerge from Chapter 11 bankruptcy requires final approval of the ATSB loan, and
WHEREAS the ATSB loan conditions require a resolution to the pension funding issue, and
WHEREAS the bankruptcy court judge has determined that the financial requirements set forth in ERISA for a distress termination of the Pilots DB Plan have been met, and
WHEREAS the bankruptcy judge has stated in his order that “unless the plan is terminated, the debtors will be unable to pay all of their debts pursuant to a plan of reorganization and will be unable to continue in business outside the chapter 11 reorganization process,†and
WHEREAS ALPA retained Hewitt Associates, an actuarial firm, to verify the accuracy of the company’s actuarial data, and to determine if savings from the current funding obligations were available to avoid termination of Pilots DB plan, and
WHEREAS the conclusion of Hewitt Associates and ALPA’s benefit professionals is that no reasonable scenario is available to avoid DB plan termination, and
WHEREAS the Negotiating Committee was charged with investigating a follow on retirement plan that achieves the maximum level of benefits, on an equitable basis, for the greatest number of US Airways Pilots, and
WHEREAS the negotiations concluded on the evening of Friday, March 21st, with a TA being reached between the Negotiating Committee and the Company, and
WHEREAS the MEC has reviewed the company’s current situation, and the relevant sections of the Policy Manual and concluded that it is in the best interests of the US Airways pilots to ratify LOA 85 and LOA 86 by the MEC on an expedited basis,
THEREFORE BE IT RESOLVED that the MEC ratifies LOA 85, Pilots’ Defined Contribution Plan, and LOA 86, Adjustments to Restructuring Agreements, and associated documents.
Provisions of the LOA 85, Pilots Defined Contribution Plan, proposal include:
· ALPA’s consent to the distress termination of the pilots’ defined benefit pension plan on March 31, 2003.
· The Company agrees to pursue and support a legislative and regulatory solution to the pension funding problem for its defined benefit plans for the remainder of 2003, with the objective of restoring the defined benefit plan.
· Effective date of DC plan is April 1, 2003.
· Contributions effective as of April 1, 2003, unless a DB restoration occurs in 2003.
· 2003 plan contributions would be paid into escrow accounts. Absent a DB plan restoration by December 31, 2003, escrowed funds are to be paid to the new DC plan. DB plan restoration by Dec. 31 will cause these funds to be paid back to the Company. Repayment provisions will be made for pilots retiring in 2003.
· Contributions determined based on a target balance defined as approximately 1 million dollars, for age 60 pilot with 30 years of service.
· Final Average Earnings defined as the 36 consecutive months in last 120 months in which the pilot has the highest earnings
· Accrual rate is 1.8 % for first 25 years, and 1% for year 26-30
· Contributions assumed to earn 8% annually
· Requires PBGC approval. The PBGC review process will begin on March 22 and is expected to take up to five days. If it is approved, plan will be introduced in bankruptcy court next week for review.
Provisions of LOA 86, Adjustments to Restructuring Agreements, include:
· ALPA granted US Airways Inc. board of directors seat, and has at least one major Board committee position, for as long as ALPA has a seat on the US Airways Group board.
· Per modified Plan of Reorganization Stephen Wolf, Rakesh Gangwal and Larry Nagin’s 35 million-dollar lump sum payout will remain eligible for recovery by US Airways’ post-bankruptcy Board of Directors.
· Effective Jan. 1, 2004, pre-65 retiree pilots may purchase basic life insurance provided the Company determines that there is no adverse impact to costs.
· Elimination period for a disability covered by LTD program reduced from 6 months to 120 days.
· Midway Jets for Jobs -- Midway jets for jobs aircraft will be staffed by 100% APL pilots beyond 30 aircraft after all furloughed Midway pilot have been offered recall.
· Company budgets up to $500,000 to implement a special downgrade procedure for A330 F/Os to Group 2 Captain positions.
· ACARS dispute will be addressed in the manner previously agreed to by ALPA, if matter is not resolved, then referred to grievance process.
· ALPA agrees to withdraw the GATT calculations for lump sum distributions grievance.
A March 22 Fact Sheet and LOAs 85 and 86 are being posted on the pilots only section of the MEC website. A roadshow schedule to explain and discuss the agreements is expected to be considered by the MEC next week.
The MEC’s special meeting adjourned at 1:15 a.m. this morning.
Item 2. The MEC has rescheduled its regular first quarter meeting in Annapolis, MD, to March 25-28 at the Annapolis Waterfront Marriott. The meeting is scheduled to now begin at 9:30 a.m. on Tuesday, March 25, and recess at 6:00 p.m. and then reconvene 9:30 a.m. Wednesday through Friday. The period for pilots in good standing to address the MEC on issues of their own choosing is scheduled for Tuesday, March 25, at 9:30 a.m. All US Airways pilots are encouraged to attend the meeting. The telephone number for transportation information is (410) 268-7555. Please be advised that portions of the meeting may be in closed session.
Item 3. New details are available for pilots wishing to participate in the airline industry event on Capitol Hill on March 25 and 26 to urge support of relief efforts for the airlines as they are impacted by the Iraq war. The airline industry will host rooms on Tuesday, March 25 and Wednesday, March 26, for pilots wishing to visit their members of Congress. Participants will be provided with position papers, maps of Capitol Hill and meal vouchers for Hill cafeterias.
The reception rooms are as follows:
Tues, March 25: 10 a.m.-3:30 p.m. - Capitol Hill Club, 300 1st St., S.E., directly across the street from the Capitol South Metro Station.
Wed., March 26: 10 a.m.-4 p.m. - Room 2237, House Rayburn Building, 1st & Independence Ave. (3rd building north of Capitol South Metro Station).
US Airways pilots are welcome to participate in this effort on their own time. A limited number of space positive seats will be provided. Pilots should attempt to travel space available, if possible. If bookings do not allow, please contact the MEC office at 800-USAIR MEC.
Please remember we have 1,827 pilots on furlough.
Thank you for listening.
March 22, 2003
This is Roy Freundlich with US Airways MEC update for Saturday, March 22, with three new items.
Item 1. The Negotiating Committee presented the MEC with tentative agreements yesterday evening on LOA 85, Pilots Defined Contribution Plan and LOA 86, Adjustments to Restructuring Agreements.
The MEC ratified both letters of agreements by passing the following resolution:
WHEREAS the Company’s Plan of Reorganization and ability to emerge from Chapter 11 bankruptcy requires final approval of the ATSB loan, and
WHEREAS the ATSB loan conditions require a resolution to the pension funding issue, and
WHEREAS the bankruptcy court judge has determined that the financial requirements set forth in ERISA for a distress termination of the Pilots DB Plan have been met, and
WHEREAS the bankruptcy judge has stated in his order that “unless the plan is terminated, the debtors will be unable to pay all of their debts pursuant to a plan of reorganization and will be unable to continue in business outside the chapter 11 reorganization process,†and
WHEREAS ALPA retained Hewitt Associates, an actuarial firm, to verify the accuracy of the company’s actuarial data, and to determine if savings from the current funding obligations were available to avoid termination of Pilots DB plan, and
WHEREAS the conclusion of Hewitt Associates and ALPA’s benefit professionals is that no reasonable scenario is available to avoid DB plan termination, and
WHEREAS the Negotiating Committee was charged with investigating a follow on retirement plan that achieves the maximum level of benefits, on an equitable basis, for the greatest number of US Airways Pilots, and
WHEREAS the negotiations concluded on the evening of Friday, March 21st, with a TA being reached between the Negotiating Committee and the Company, and
WHEREAS the MEC has reviewed the company’s current situation, and the relevant sections of the Policy Manual and concluded that it is in the best interests of the US Airways pilots to ratify LOA 85 and LOA 86 by the MEC on an expedited basis,
THEREFORE BE IT RESOLVED that the MEC ratifies LOA 85, Pilots’ Defined Contribution Plan, and LOA 86, Adjustments to Restructuring Agreements, and associated documents.
Provisions of the LOA 85, Pilots Defined Contribution Plan, proposal include:
· ALPA’s consent to the distress termination of the pilots’ defined benefit pension plan on March 31, 2003.
· The Company agrees to pursue and support a legislative and regulatory solution to the pension funding problem for its defined benefit plans for the remainder of 2003, with the objective of restoring the defined benefit plan.
· Effective date of DC plan is April 1, 2003.
· Contributions effective as of April 1, 2003, unless a DB restoration occurs in 2003.
· 2003 plan contributions would be paid into escrow accounts. Absent a DB plan restoration by December 31, 2003, escrowed funds are to be paid to the new DC plan. DB plan restoration by Dec. 31 will cause these funds to be paid back to the Company. Repayment provisions will be made for pilots retiring in 2003.
· Contributions determined based on a target balance defined as approximately 1 million dollars, for age 60 pilot with 30 years of service.
· Final Average Earnings defined as the 36 consecutive months in last 120 months in which the pilot has the highest earnings
· Accrual rate is 1.8 % for first 25 years, and 1% for year 26-30
· Contributions assumed to earn 8% annually
· Requires PBGC approval. The PBGC review process will begin on March 22 and is expected to take up to five days. If it is approved, plan will be introduced in bankruptcy court next week for review.
Provisions of LOA 86, Adjustments to Restructuring Agreements, include:
· ALPA granted US Airways Inc. board of directors seat, and has at least one major Board committee position, for as long as ALPA has a seat on the US Airways Group board.
· Per modified Plan of Reorganization Stephen Wolf, Rakesh Gangwal and Larry Nagin’s 35 million-dollar lump sum payout will remain eligible for recovery by US Airways’ post-bankruptcy Board of Directors.
· Effective Jan. 1, 2004, pre-65 retiree pilots may purchase basic life insurance provided the Company determines that there is no adverse impact to costs.
· Elimination period for a disability covered by LTD program reduced from 6 months to 120 days.
· Midway Jets for Jobs -- Midway jets for jobs aircraft will be staffed by 100% APL pilots beyond 30 aircraft after all furloughed Midway pilot have been offered recall.
· Company budgets up to $500,000 to implement a special downgrade procedure for A330 F/Os to Group 2 Captain positions.
· ACARS dispute will be addressed in the manner previously agreed to by ALPA, if matter is not resolved, then referred to grievance process.
· ALPA agrees to withdraw the GATT calculations for lump sum distributions grievance.
A March 22 Fact Sheet and LOAs 85 and 86 are being posted on the pilots only section of the MEC website. A roadshow schedule to explain and discuss the agreements is expected to be considered by the MEC next week.
The MEC’s special meeting adjourned at 1:15 a.m. this morning.
Item 2. The MEC has rescheduled its regular first quarter meeting in Annapolis, MD, to March 25-28 at the Annapolis Waterfront Marriott. The meeting is scheduled to now begin at 9:30 a.m. on Tuesday, March 25, and recess at 6:00 p.m. and then reconvene 9:30 a.m. Wednesday through Friday. The period for pilots in good standing to address the MEC on issues of their own choosing is scheduled for Tuesday, March 25, at 9:30 a.m. All US Airways pilots are encouraged to attend the meeting. The telephone number for transportation information is (410) 268-7555. Please be advised that portions of the meeting may be in closed session.
Item 3. New details are available for pilots wishing to participate in the airline industry event on Capitol Hill on March 25 and 26 to urge support of relief efforts for the airlines as they are impacted by the Iraq war. The airline industry will host rooms on Tuesday, March 25 and Wednesday, March 26, for pilots wishing to visit their members of Congress. Participants will be provided with position papers, maps of Capitol Hill and meal vouchers for Hill cafeterias.
The reception rooms are as follows:
Tues, March 25: 10 a.m.-3:30 p.m. - Capitol Hill Club, 300 1st St., S.E., directly across the street from the Capitol South Metro Station.
Wed., March 26: 10 a.m.-4 p.m. - Room 2237, House Rayburn Building, 1st & Independence Ave. (3rd building north of Capitol South Metro Station).
US Airways pilots are welcome to participate in this effort on their own time. A limited number of space positive seats will be provided. Pilots should attempt to travel space available, if possible. If bookings do not allow, please contact the MEC office at 800-USAIR MEC.
Please remember we have 1,827 pilots on furlough.
Thank you for listening.
12 PM Atlantic wrote: 
