Some Good Pension News!

[AAmech]

Just received my statement from the company concerning the TWU pension. Total assests were just under 2 Billion. The plan earned 431 million this year. 387 million were earnings from investments. 44 million from company contributions. The plan paid out a total of 147 million. The Pension plans assets INCREASED by 284 million ! Its nice to see something going in our favor for a change!

 

[Bob Owens]

Just received my statement from the company concerning the TWU pension. Total assests were just under 2 Billion. The plan earned 431 million this year. 387 million were earnings from investments. 44 million from company contributions. The plan paid out a total of 147 million. The Pension plans assets INCREASED by 284 million ! Its nice to see something going in our favor for a change!

[post="230131"][/post]​

Which pension are you talking about, the AA pension for TWU members or the one you will get from the TWU International where the formula is 2.5% of your highest pay times your years of service, plus a compounded 5% annual increase once your retire?(Source IRS Form 5500, available from the DOL)


Just think, back in 1995 when the TWU negotiated a 6 year 6% increase for us, they gave their retirees a 30% increase.

That increase was funded by our dues.

From the period of 2002 to 2008, where our compensation will remain cut by at least 16% their pension checks will increase by 36%!!!! A diffrence in performance of 52%!!!

This increase will also be funded by our dues, unless of course we leave the TWU. But not to worry, the TWU has provided for that possibility too, by using our dues to buy a fidelity bond insuring the fund.

They give themselves increases off the dues provided by our reduced paychecks.

 

[Wretched Wrench]

Just received my statement from the company concerning the TWU pension. Total assests were just under 2 Billion. The plan earned 431 million this year. 387 million were earnings from investments. 44 million from company contributions. The plan paid out a total of 147 million. The Pension plans assets INCREASED by 284 million ! Its nice to see something going in our favor for a change!

[post="230131"][/post]​

Yeah, right. Another TWU/company cheerleader. You're a regular one-man clacque.

Perhaps you should consider moonlighting for Flagship News or the TWU Express.

The pension fund for ground employees has been underfunded for years, and is now, thanks to special dispensation from Congress, is even further underfunded. And that is just by the numbers. When one considers the unrealistic income projections AA uses to calculate future pension funding, the degree of underfunding becomes even more serious. And, Congress is complicit in this, as funds contributed by a company to its retirement funds are not taxable, so they are not about to cut their own revenue stream by demanding that companies actully fund their retirements with realistic, or God forbid, honest figures and calculations.

And, even if we ever do collect our pension, it will be at a formula MUCH less generous than you TWU fat cats have provided for yourselves.

So, both the company and TWU fat cats have provided BK-proof pension funding for themselves and left the rest of us high and dry. Or to use another nautical metaphor, we are on the Titanic, and only those dine at the captain's table have lifeboats.

 

[WingNaPrayer]

Ya gotta love a nice golden parachute! Anyone who relies solely on a pension fund for retirement income in this country may as well take their chances with social security!

Of course, you could always look at things the way AMR does . . . the more people they get rid of, the less funding they'll have to throw at their promised pension plans to pay the ones that are left!

It just scares the hell out of me when I start thinking like a Republican!

 

[Oneflyer]

When one considers the unrealistic income projections AA uses to calculate future pension funding, the degree of underfunding becomes even more serious.

Do you mean AA income? How does that have anything to do with underfunding or do you mean the expected rate of return of the pension assets?

 

[Bob Owens]

Yeah, right. Another TWU/company cheerleader. You're a regular one-man clacque.

Perhaps you should consider moonlighting for Flagship News or the TWU Express.

The pension fund for ground employees has been underfunded for years, and is now, thanks to special dispensation from Congress, is even further underfunded. And that is just by the numbers. When one considers the unrealistic income projections AA uses to calculate future pension funding, the degree of underfunding becomes even more serious. And, Congress is complicit in this, as funds contributed by a company to its retirement funds are not taxable, so they are not about to cut their own revenue stream by demanding that companies actully fund their retirements with realistic, or God forbid, honest figures and calculations.

And, even if we ever do collect our pension, it will be at a formula MUCH less generous than you TWU fat cats have provided for yourselves.

So, both the company and TWU fat cats have provided BK-proof pension funding for themselves and left the rest of us high and dry. Or to use another nautical metaphor, we are on the Titanic, and only those dine at the captain's table have lifeboats.

[post="230433"][/post]​

Oh and I forgot to mention that that they also have the years plus age equals 80 formula for themselves too, you know the one they said was unreasonable for us to expect the company to give to us!

The company cant give it to us but we can pay for it for them! Along with the 5% annual raise.

 

[Wretched Wrench]

Do you mean AA income? How does that have anything to do with underfunding or do you mean the expected rate of return of the pension assets?

[post="230829"][/post]​

The expected rate of return of the pension assets, of course.

 

[Oneflyer]

The expected rate of return of the pension assets, of course.

Do you happen to know what it is by chance?

 

[Wretched Wrench]

Do you happen to know what it is by chance?

[post="230982"][/post]​

The infromation is out there. I have seen it several places. Business week, the Baumert Report, etc. You'll find it if you really want it.

 

[Oneflyer]

You'll find it if you really want it.

Had to be a tough guy huh?

Well, according to the 2003 annual report the expected rate of return is 9%. Which is actually fairly conservative. I'm not really sure what you're so up in arms about this for, of course, being a mechanic I'm sure you deal with rates of return all time.

 

[Boomer]

Warren Buffett warns against irrational assumptions tied to pension returns

Given that Mr. Buffett is widley acknowledged as one of the most savy investors in the United States, I tend to beleive him over a company that lied when they were claiming imminent bankruptcy while funding pensions for the people that put us there.

Having said that, I do acknowledge that reducing the assumed rate of return is problematic in that reduction in the assumed rate would increase the shortfunding position thus requiring larger cash contributions; not exactly the best time for that to happen.

The primary problem is that Sen. Kennedys' bill allowing the continued shortfunding of airline and steel company pensions expires in 2005 creating a ticking time bomb for those companies retaining a DBP.

 

[Oneflyer]

Given that Mr. Buffett is widley acknowledged as one of the most savy investors in the United States, I tend to beleive him over a company that lied when they were claiming imminent bankruptcy while funding pensions for the people that put us there.

Are you saying that AA is intentionally deceiving employees by assuming a 9% rate of return? Considering Longterm government bonds historically return 6% or more its hard to say that 9% isn't achievable.

 

[Wretched Wrench]

QUOTE
You'll find it if you really want it.

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Had to be a tough guy huh?

Well, according to the 2003 annual report the expected rate of return is 9%. Which is actually fairly conservative. I'm not really sure what you're so up in arms about this for, of course, being a mechanic I'm sure you deal with rates of return all time.

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No, oneflyer, I didn't have to be a tough guy. I suspected I was being baited and didn't feel like expending much energy in researching this when I was pretty sure you already had the answer at hand. And, of course, you did, as evidenced by your post.

But you should read Baumert's take on this, too, as well as sources other than the Co's annual report.

"of course, being a mechanic I'm sure you deal with rates of return all time."

Getting a little shrill with the ad hominum there, aren't you? Why would that be? And what, exactly, is your area of expertise that gives you such a superior analysis of rates of return? Do you have a degree in business or finance?

 

[Boomer]

Are you saying that AA is intentionally deceiving employees by assuming a 9% rate of return? Considering Longterm government bonds historically return 6% or more its hard to say that 9% isn't achievable.

[post="231234"][/post]​

Oneflyer,
I'm quoting one of the most successfull long term financial investors in America who has repeatedly warned that assumed long term returns above 6% are irrational and stating the reasons that reducing the assumed rate of return would likewise increase the underfunded status of those pension funds.

Is it possible that AA would yield returns sufficiently above the assumed 9% rate such that the status of the funds would reach the 90% threshold required to be satutorily "fully funded"? Sure, it's possible; not likely, but still possible.

While I think that it has been proven that Senior AA Management did in fact decieve the Unions regarding the funding status of the Kerp and Serp plans; I think the use of overly optimistic assumed rates of return by AA Management for the pension funds is being forced through the realization that cutting the assumed rate would increase the underfunding status and place a greater demand on cash reserves at a time when cash conservation is king.

 

[AAmech]

Which pension are you talking about, the AA pension for TWU members or the one you will get from the TWU International where the formula is 2.5% of your highest pay times your years of service, plus a compounded 5% annual increase once your retire?(Source IRS Form 5500, available from the DOL)
Just think, back in 1995 when the TWU negotiated a 6 year 6% increase for us, they gave their retirees a 30% increase.

That increase was funded by our dues.

[post="230380"][/post]​

Sorry Bob, I just get the TWU ground emp pension.