The pre-funding for retiree medical benefits is a trust fund and I don't believe can be taken away in BK, at least that's what the TWU counsel explained in a letter to the President's Council. BTW, you didn't vote????
The funds are in a Trust held by JP Morgan. You can find out whats in there by calling 1-800-345-2345.
The Prefunding Trust agreement is available on the Local 562 Website.
I called JPMorgan, my contributions plus interest is $6500, so my total account balance is $13,000. I'm a pre-90 employee so my balance is much lower than those my age or older who were hired after prefunding was put in place. The loss of the $6500 is bad enough, but thats crumbs compared to what we would be losing by having to pay for our retiree medical, I figure thats a loss around $90,000 if I retire at 65, more if I retired early.
The question isnt whether or not the company can terminate the plan, the agreement says they can, however if they terminate the plan they dont get to run off with the matching funds.
What the company and apparently some in the Union are doing is trying to get us to agree to having all employees who dont retire within three months of the DOS, if there is one, get their contributions returned to them,
this would terminate their participation in the plan, which means that all those matching funds stay in the plan for the company to use to pay benefits. While it does say they have to be used to pay for TWU members benefits thats a little misleading, because we wont be able to use them to offset what we pay for benefits, the company gets to use them to offset what they pay. The "plan" would still exist, however we would be agreeing to terminate our participation in the plan, none of us would be in it, just half our money would be, but it would be the Companys money now (limited to paying for benefits),thats the catch.
So, lets say that this passes, then they do the same thing to us, they will only have retirees in the plan. They would have confiscated around $120 million in matching funds from us, thats money out of our pockets, and shed the liability of having to provide retiree medical benefits for thousands of workers who have not yet retired(likely many times the $120million in cash they would be taking from us). So they screwed us, and we let them do it. However now they can go after the retirees. I didnt read anything in there requiring a BK filing to terminate the plan. So having confiscated our matching funds by pushing us all out of the plan they could then terminate the plan for retirees, give this smaller group back whats left in their accounts, if they are over 65 its probably ZERO, and tell them they have to buy coverage and pay 100% of the costs like they want us to do. The remaining millions from what used to be in our accounts can be used to offset other health benefit costs, much like the remaining funds from the Supplimental Medical that the Union let them steal.
Here is how the company, and some in the union spin this. They say that "the money doesnt go to the company", well it does and it doesnt. The funds in the plan
replace funds that would have come from the general fund. So in reality they get the benefit of saving them from paying those costs, the fact that the company would be able to shed the liabilities that these funds were set aside for would be a huge windfall for the company. While they cant go out and buy airplanes with the funds in the plan they can be used to pay medical costs that would have been paid by funds from the general fund. If someone went and paid your mortgage for you, you could factually claim that you never recieved any money from that person, however the benefit you enjoyed would be the same as if he handed you the cash directly.
Between the Supplimental Medical and the Prefunding AA will have a windfall of around $175 million in cash plus the elimination of many times that number in liabilities. So in reality the effect on the General fund is the same, although the $175 million doesnt get added to the General fund to buy Airplanes and give executive bonuses, $175 million that would have come from the General fund to pay liabilities no longer has to, so that money is freed up to buy airplanes and pay executive bonuses.
Who knows, we may even see a profit sharing check for around $200, and think, it will have only cost us around $100,000!
The way it reads to me is that if the company wanted to they could terminate the plan, so maybe it will be gone by the time we retire, but like I said if they terminate the plan they could not take our matching funds, they would remain in the trust to be used to get us benefits elsewhere. They would remain even if the company went BK. In most cases those funds probably would not last a lifetime but it would go twice as far as just our contributions.
So if we were stupid enough to agree to this they could take our money from Prefunding, that they could not get in BK, have a windfall of around $120 million in addition to the windfall from terminating the Supplimental Medical and then shed their retiree medical liabilies as well, all without a BK filing.
We may not be able to stop AA from taking away our Prefunded retiree medical benefits, however we can stop them from taking half the funds we have that were set aside to pay for them. VOTE NO!
