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DL/NW Potential Pension UAL Style

DAYflyer From United States of America, joined Sep 2004, 3807 posts, RR: 4
Posted (8 years 1 week 6 days 12 hours ago) and read 1393 times:

DN & NW speak of potential bankruptcy over pension issues, sounds like another pension going the way of UAL .

http://www.foxnews.com/story/0,2933,158837,00.html

I dont think it will be too long before all airline pensions go belly-up.

One Nation Under God

12 replies: All unread, jump to last

Cory6188 From United States of America, joined Feb 2004, 2686 posts, RR: 6
Reply 1, posted (8 years 1 week 6 days 12 hours ago) and read 1390 times:

Would the PBGC ever be able to handle all of these absolutely huge pension funds? It seems like a ton of money for them to suddenly become responsible for.

Commavia From United States of America, joined Apr 2005, 10225 posts, RR: 62
Reply 2, posted (8 years 1 week 6 days 12 hours ago) and read 1373 times:

That would leave only AA and CO fulfilling their traditional pension committments.

DAYflyer From United States of America, joined Sep 2004, 3807 posts, RR: 4
Reply 3, posted (8 years 1 week 6 days 11 hours ago) and read 1366 times:

Everybody knows where this is headed....and the US taxpayer will be stick footing the bill for the PBGC.

One Nation Under God

DAL767400ER From Germany, joined Feb 2005, 5721 posts, RR: 50
Reply 4, posted (8 years 1 week 6 days 11 hours ago) and read 1319 times:

It is only a matter of time before AA and CO want the UA-treatment as well. And who could deny them that wish? Otherwise, it would give UA a huge financial advantage over its competitors.

Positiverate From United States of America, joined May 2005, 1590 posts, RR: 9
Reply 5, posted (8 years 1 week 6 days 9 hours ago) and read 1274 times:

Delta was advocating legislation that would let them stretch out their pension payments over a logner period of time and make them more manageable.

Atmx2000 From United States of America, joined Oct 2004, 4576 posts, RR: 39
Reply 6, posted (8 years 1 week 6 days 8 hours ago) and read 1232 times:

Quoting DAYflyer (Reply 3):
Everybody knows where this is headed....and the US taxpayer will be stick footing the bill for the PBGC.

Since pension problems seems to be so concentrated in a few heavily unionized industries which rather rapidly got exposed to competition (carmakers and steel industry to foreign competition and airlines to deregulated competition), I suspect we will see industry specific settlements like the Railroad Retirement Act. We might see something retirement policy for the airlines, which will raise revenue from all airlines to pay off some of the older retirement obligations and help airlines shift younger workers from defined benefit to defined contribution plans. If it is an industry specific settlement, the general taxpayer won't pay for it, but rather the customers of the airlines.

ConcordeBoy is a twin supremacist!! He supports quadicide!!

Halls120 From , joined Dec 1969, posts, RR:
Reply 7, posted (8 years 1 week 6 days 5 hours ago) and read 1160 times:

My brother is a DL pilot who plans on retiring next year - the minute he is eligible. He understands that he will be getting a smaller pension than if he stayed on with the airline until he reaches mandatory retirement, but he figures a reduced pension is better than none at all.

DAYflyer From United States of America, joined Sep 2004, 3807 posts, RR: 4
Reply 8, posted (8 years 1 week 5 days 16 hours ago) and read 1097 times:

Quoting Atmx2000 (Reply 6):
Quoting DAYflyer (Reply 3):
Everybody knows where this is headed....and the US taxpayer will be stick footing the bill for the PBGC.

Since pension problems seems to be so concentrated in a few heavily unionized industries which rather rapidly got exposed to competition (carmakers and steel industry to foreign competition and airlines to deregulated competition), I suspect we will see industry specific settlements like the Railroad Retirement Act. We might see something retirement policy for the airlines, which will raise revenue from all airlines to pay off some of the older retirement obligations and help airlines shift younger workers from defined benefit to defined contribution plans. If it is an industry specific settlement, the general taxpayer won't pay for it, but rather the customers of the airlines.

In either case, we lose. I wonder why the government has not monitored and policed this better. Corporations that are not making pension payments into funds they created to attract high caliber workers should maintain liability.

I agree that we probobly will se something like the Railroad Retirement Act. I do find it interesting that this problem hit yet another heavily unionized industry as you said.

One Nation Under God

Commavia From United States of America, joined Apr 2005, 10225 posts, RR: 62
Reply 9, posted (8 years 1 week 5 days 5 hours ago) and read 1022 times:

Press release issued today jointly by AA and its unions:

http://www.aa.com/content/amrcorp/pressReleases/2005_06/07_joint_letter.jhtml;jsessionid=INZO4HW5PUXJXEAJJM3U1DUQBFFT4VMD

Interesting to see another path.

IslandHopperCO From Micronesia, joined Dec 2003, 224 posts, RR: 0
Reply 10, posted (8 years 1 week 5 days 3 hours ago) and read 1011 times:

What I don't understand is why these defined benefit pensions were set up in the first place. Couldn't the companies and employees forsee that paying these ever growing pensions was unsustainable from the beginning? What a silly ponzi scheme, just like social security.

[Edited 2005-06-09 06:25:02]

N801NW From United States of America, joined Jul 2004, 741 posts, RR: 1
Reply 11, posted (8 years 1 week 4 days 20 hours ago) and read 984 times:

Quoting IslandHopperCO (Reply 10):
What I don't understand is why these defined benefit pensions were set up in the first place.

It was apparently the only legal means of funding retirement plans in the 1940's, according to testimony at the Senate hearing on Tuesday. Defined contribution plans either did not exist or weren't legal.

Filejw From United States of America, joined Sep 2000, 352 posts, RR: 1
Reply 12, posted (8 years 1 week 4 days 20 hours ago) and read 981 times:

What people seem to forget is that this bill is not only to save the airlines from bankruptcy but to let the them pay money owed and already earned by emplyees.Should be no cost to the government.Better than letting it go to the PGBC and stretching that body to its limit.

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