Looks like the PBGC getting ready to argue!

[Hopeful]

Not going to argue here but when our plans were terminated those that were 55 as of that date got ALLLLLLLLLLLL their retiremnt if you were under 55, which was the earliest our plan would let you go then the PGGC tables kicked in and you recieved a shortfall of 5% per year from the PBGC 65 retire age. THIS was proven tested and done.

Yes, according the TWA folks i work with, those under 55 at the time of BK lost almost half....those over 55 got everything coming to them at their age..You and I are saying basically the same thing..but I think individual plans and circumstances are what differ the TWA BK/pension thing that of AA's.

Didn't the TWA people have something agreed to or screwed by Carl Icahn before the final bk filing way before the AA deal?

i recall something to the effect involving Icahn.

 

[nbmcg01]

Yes, according the TWA folks i work with, those under 55 at the time of BK lost almost half....those over 55 got everything coming to them at their age..You and I are saying basically the same thing..but I think individual plans and circumstances are what differ the TWA BK/pension thing that of AA's.

Didn't the TWA people have something agreed to or screwed by Carl Icahn before the final bk filing way before the AA deal?

i recall something to the effect involving Icahn.

The plans were terminated under Ichan..it was part of the deal to get rid of him..

 

[Hopeful]

The plans were terminated under Ichan..it was part of the deal to get rid of him..

Was this during negotiations or the other BK filing?

 

[Buck]

Hence, the result of deregulation. the only way to offer bus fares on airlines was to decimate labor.

No I believe deregulation provided for the flying public to get the cheap fares. Business while critical, was an expense to the companies. Business was purchasing fares for the going rate, then comes deregulation which allowed cheap fares that filled seats and the businesses complained. Then came the "adjustment" to ticketing. Travel Agents basically disappeared, moving to the interent.

No, labor was decimated by not adjusting to changing conditions in the industry. Which brings the topic back. Labor could have adjusted contracts to account for the change into the way the country was heading. 401k's, IRA's and even union sponsored pension funds. <_< . But here were are with the changes that could have been, possibly being forced upon us. PBGC which, I believe was insolvent orr at least not fully funded and indusatry after industry turning over the defined plans to the bureaucracy of the govenment.

 

[FWAAA]

I do not believe that the PBGC has the authority to argue strenuously against a distress termination under the bankruptcy code; like wrencher said, it can posture to try to obtain more stock upon reorganization, but if the court agrees that termination is necssary for the debtor to survive, then the plans will be terminated.

 

[Kellerguy]

I do not believe that the PBGC has the authority to argue strenuously against a distress termination under the bankruptcy code; like wrencher said, it can posture to try to obtain more stock upon reorganization, but if the court agrees that termination is necssary for the debtor to survive, then the plans will be terminated.

They argued quite a bit in the UA BK and in the end they did get warrants, but UA terminated nonetheless.

 

[BoeingBoy]

Not going to argue here but when our plans were terminated those that were 55 as of that date got ALLLLLLLLLLLL their retiremnt if you were under 55, which was the earliest our plan would let you go then the PGGC tables kicked in and you recieved a shortfall of 5% per year from the PBGC 65 retire age. THIS was proven tested and done.

That's a function of how well or poorly the plan is funded in a termination, not a difference between termination and freezing a plan.

Jim

 

[Wretched Wrench]

http://www.pbgc.gov/news/press/releases/pr12-11.html

From what I take from this is that AA might be leaning towards termination of the pension funds....

AA has been intentionally underfunding our pension for years and years. The only possible result of this would be an inability to pay our pensions, which would allow them to do the bankruptcy thing.

It has not been difficult to see this coming.

As long as upper management has their pension protected, the workers' pensions are in danger, and always have been.

 

[Buck]

AA has been intentionally underfunding our pension for years and years. The only possible result of this would be an inability to pay our pensions, which would allow them to do the bankruptcy thing.

It has not been difficult to see this coming.

As long as upper management has their pension protected, the workers' pensions are in danger, and always have been.

How can you say that the company intentionally underfunded our pensions, with the union watching this issue?

One issue I need to be cleared up, is does the TWU International receive a pension from the company and the International?

 

[PhatSappy]

http://www.pbgc.gov/news/press/releases/pr12-11.html

From what I take from this is that AA might be leaning towards termination of the pension funds....

Re. "We showed Visteon they could reorganize successfully without terminating their employees' plans. Today, the company's 23,000 workers and retirees continue to receive all the benefits they've earned.
Contrary to Mr. Miller's comments, airlines have reorganized successfully without damaging the retirement security of workers and retirees. In the most recent airline bankruptcies, Northwest Airlines emerged without terminating its plans. Delta terminated its pilots plan, but reorganized with its other plans intact.

I hope the PBGC has a seat at the table and some good suggestions for the BK Judge and AMR. TWU has certainly failed to lobby successfully for better protections.

" Insurance " is the keyword in this press release. Banks have to be FDIC insured and suffer compliance audits all the time. All companies with defined benefit plans should have such insurance and audits on their plan funding.

 

[Bob Owens]

How can you say that the company intentionally underfunded our pensions, with the union watching this issue?

One issue I need to be cleared up, is does the TWU International receive a pension from the company and the International?

If you recall we were asked to lobby to extend AA's payments, in other words allow them to underfund even more than it was a while back. I was against it.

Yes, the details are on page 9 of the Pension SDR on Jetnet as far as what they get from AA if you want to find out what they get from the International you would have to get form 5500 , it's an IRS form that's filed with the DOL.

 

[Wretched Wrench]

How can you say that the company intentionally underfunded our pensions, with the union watching this issue?

I hope that is intended as humor. But, just in case you are really serious, I'll just say that the TWU Fat Cats are not very interested in anything that does not affect them directly. Kinda like the pigs in Orwell's Animal Farm. the AA bosses are the same way.........They have safe pensions with various enhancements and, of course, SERP. I suspect retention bonuses will also be distributed once the smoke clears.

One issue I need to be cleared up, is does the TWU International receive a pension from the company and the International?

The TWU international fat cats have their own salaries, expense accounts, and pensions, and are not affected by the AA bankruptcy. I have seen some of the documents, and their expense accounts are as large as their salaries.

 

[Kellerguy]

Perhaps an outgrowth of this BK will be tougher pension funding compliance, using a mathematical calculation that penalizes companies for underfunding, but it would have to take into consideration market conditions and plan assumptions. In the end I'm not so sure the judge will listen to them either. He has two main constituencies, the secured creditors and the management's reorg plan, not so much the unsecured creditors.

 

[Wretched Wrench]

Perhaps an outgrowth of this BK will be tougher pension funding compliance, using a mathematical calculation that penalizes companies for underfunding, ...............

I would also like to think so, but since it hasn't already happened, it is unlikely that things will change.

 

[FWAAA]

Perhaps an outgrowth of this BK will be tougher pension funding compliance, using a mathematical calculation that penalizes companies for underfunding, but it would have to take into consideration market conditions and plan assumptions. In the end I'm not so sure the judge will listen to them either. He has two main constituencies, the secured creditors and the management's reorg plan, not so much the unsecured creditors.

AA's underfunding has nothing to do with an absence of "tougher pension funding compliance" or a shortage of mathematical calculations. The ERISA and IRS regulations already contain myriad rules to govern the pension funding.

AA's underfunding was a direct result of the stock market crash of 2008, from which the markets have yet to fully recover - and, of course, the AA pension funds have yet to fully recover as well.

On 12/31/07, prior to the equity markets meltdown, AA's pensions were funded to 96%.