FWAAA said:
You are correct; generally, among airline labor groups, only pilots had a defined benefit pension checks that exceeded the PBGC guaranteed amount. Because AA froze the pensions (not terminated them) thanks to the PBGC push-back, the AA pilots will receive their full frozen monthly checks, which will be substantially larger than the US, UA or DL pilots, all of whom had their pensions terminated and handed to the PBGC.
In effect, "saving the pensions" will end up costing every AA employee (even the pilots) lots of money in lower wages/benefits so that AA can continue to fund the frozen pensions, which require substantial cash infusions. One would hope that pilots are willing to pick up the dinner tab frequently as a small token of their appreciation for the continued sacrifices of their colleagues to fund pilot pensions.
Also correct - don't know the exact limit, but you're right, it is much lower than the single-employer guaranteed amount. I assume the IAM is looking at the TWU-represented employees the way some people view their sickly, dying rich uncles (can't wait to get their hands on the cash).
If the IAMNPF defaults to the PBGC, you won't like it.
Here's a cut and paste from the Summary Plan Description:
Under the multiemployer plan program, the PBGC
provides financial assistance through loans to plans
that are insolvent. A multiemployer plan is considered
insolvent if the plan is unable to pay benefits (at least
equal to the PBGC’s guaranteed benefit limit) when due.
The maximum benefit that the PBGC guarantees is
set by law. Under the multiemployer program, the
PBGC guarantee equals a participant’s years of service
multiplied by (1) 100% of the first $11 of the monthly
benefit accrual and (2) 75% of the next $33. The PBGC’s
maximum guarantee limit is $35.75 per month times a
participant’s years of service. For example, the maximum
annual guarantee for a retiree with 30 years of service
is $12,870.
The PBGC guarantee generally covers: (1) normal and
early retirement benefits; (2) disability benefits if you
become disabled before the plan becomes insolvent; and
(3) certain benefits for your survivors.
The PBGC guarantee generally does not cover: (1)
benefits greater than the maximum guaranteed amount
set by law; (2) benefit increases and new benefits based
on plan provisions that have been in place for fewer than
five (5) years at the earlier of the date the plan terminates
or the time the plan becomes insolvent; (3) benefits
that are not vested because you have not worked long
enough; (4) benefits for which you have not met all the
requirements at the time the plan becomes insolvent;
and (5) non-pension benefits, such as health insurance,
life insurance, certain death benefits, vacation pay, and
severance pay.
