Pension Investigation Committee Update: January 13, 2012
Dear Pilots of the former US Airways Pension Plan,
We have been fielding a number of phone calls inquiring about "what's going on." In mid-November we received the following message from our attorney David Butler:
"Attached please find a notice and order we received today from the federal court. As you will see, six cases, including ours, have been reassigned from Judge Kennedy's docket to the docket of a senior judge from the Northern District of New York (Syracuse) named Frederic J. Scullen, Jr. There is no explanation as to why this has been done. And, unfortunately, there is nothing we can do about it."
Since that notice was released to us, there have been a multitude of events behind the scenes to include Office of Inspector General's (OIG) Report on the way PBGC handled the investigation of the United Pilot's Pension Fund, and now other pension funds. (Please see the attached article from Jan. 12, titled Inspector General Faults PBGC's "Systemic" Failures, regarding this topic.)
PBGC is now under serious fire for their conduct and the way they have been handling "Investigations" of failed pension funds. As a matter of fact, it is very clear they never investigated anyone's pension as identified by the OIG, and the valuation of these pension funds went under valued at the cost to the beneficiaries, including ours. This under-valuation would affect the amount paid to the beneficiaries.
Remember that we reported to you that PBGC has been constantly preaching to the court that "$510M would have to be recovered before the pilots would see an additional penny." During the deposition process, PBGC testified time after time that they could not produce evidence as to how they came up with that number, and in fact since taking over the plan, they had actually made $175M from it.
Because of the OIG Report on United, and even though we have submitted final briefs in late August and now a change in judges has occurred, we contacted Judge Fredrick Scullen who will now preside over the case. Hopefully he will render his decision shortly. Before that happens, we intended and were granted a "status update." The status update gives an opportunity to "make sure" the Judge is educated on all aspects, both in the past through the briefs and now the "latest developments." We were scheduled for that "status update" conference on December 28. However, on December 27 we were notified that Judge Scullen had to have some surgery done and the conference would have to be rescheduled. We expect that will happen soon.
PBGC is now faced with the fact that the American Airlines employees' pension fund might be knocking on their doorsteps. In the past, PBGC was licking their chops at the opportunities of recovering a pension fund of this size. PBGC does not have to take a pension fund. They do it voluntarily, and when they do, they're required to follow ERISA Laws. In the past, instead of taking the "snapshot" and later administering a "Limited Scope Audit," we feel PBGC is going to be forced to truly "investigate" this pension fund, like they should have been doing all along. If you read the articles surrounding PBGC's possibility of acquiring AMR's Employee Pension Funds, they are showing signs of pushing away.
This committee is waiting for the following: We await the Judge's findings, and we await the final forensic report that is still being collated. This is a very complex and comprehensive report. Please be patient with the process. You would expect us to be thorough, and that's what you will get. We'll soon let you know what we plan to do with that report. It's not the end of the investigation.
Thank you again for your continued support.
F/O Dave Westberg, Chairman
Capt. Dave Koseruba, Co-Chairman
F/O Robert Whitt
Capt. Mark Butler
F/O Jeff Krumeich
Capt. Bruce Quinby
Capt. Rich Peters
Please read the above article about the PBGC. Stay informed through these updates or calling the committee members of the Pension Investigation Committee. It is still too early to speculate what the outcome will be. In the meantime, please write your Senators and Congressmen in support of the Pilots Equitable Treatment Act, seeking their support.
