xflyer
Posts: 39
Joined: Thu Oct 12, 2006 10:43 pm

DL Pilots Only Group To Lose Pension

Thu Oct 12, 2006 11:09 pm

Delta has used the bankrupcy court to terminate only the pilots pension program. Recent Pension reform legislation would enable Delta to continue the pension with a slight correction to the language. Please join us in petitioning Congress for a change.

v1.06
Subject: Petition to Save Our Pensions
Delta Air Lines has terminated its Pilot Pension Plan.

We ask you assistance in signing the following petition to Congress in an effort to save the pensions of all Delta Air Lines employees including pilots. Although the language is technical, we are just trying to get a date correction to the lump sum provision that Delta Air Lines has said prevents them from continuing the pilot pension plan. Forward this email to all your family and friends to allow them to add their name to the list. The list will be accumulated, sorted by state, and sent/and or hand delivered to members of Congress. The deadline for signing the petition is November 5, 2006. Please follow this link http://66.23.211.166/forms.nsf/petition?OpenForm to a web page that will allow you to add your name to the list. To add a spouse, return to the form and fill in again. To see the current List of Names on the Petition click http://66.23.211.166/forms.nsf/List?OpenPage The petition will be checked for bogus or duplicate entries.
This is no substitute for individually contacting your representatives and please continue to do so.
Wendell Lewis

V1.06

TO OUR ELECTED REPRESENTATIVES:
We the undersigned respectfully request your assistance in saving the pensions of all Delta employees, including pilots.

On August 4, 2006, Delta Air Lines petitioned the Bankruptcy Court for a Distress Termination of the Pilots Pension Plan. In a one hundred thirty page filing to the court, ninety nine pages are devoted to affidavits from company officials (Bastain, Coleman, McDaniel, and Watson) stating that the plan had to be terminated because of the resumption of lump sum payouts.

Recently passed Pension Reform legislation, HR 4, Public Law 109-280, contains language that requires Delta Air Lines to possibly resume lump sum payments from the Pilot Pension Plan. Section 103, "BENEFIT LIMITATIONS UNDER SINGLE-EMPLOYER PLANS." Per the Bill, the "EFFECTIVE DATES" of Sec 103 (c) (1), which is entitled "IN GENERAL. --" of the Amendments is for "plan years beginning after 31 December, 2007." Further, there is a "COLLECTIVE BARGAINING EXCEPTION. --" in Section 103 (c) (2) that says for CBAs reached prior to 1 January 2008, the section shall not apply until the termination date of the CBA, or 1/1/2010 if later.

A technical correction to the bill that would prohibit lump sum distributions immediately could possibly enable Delta Air Lines to meet their pension obligations. I urge you to join the other members of Congress to make a “Technical Correction” to the Pension Reform Bill and remove this discriminatory exception, or to add the phrase "Except for the Plans of companies that have declared bankruptcy," to the beginning of Section 103 (c) (1) and Section 103 (c) (2), thus making the Lump Sum suspension available immediately. Any suitable language to prevent resumption of lump sum payouts for under funded plans could save the pensions of thousands of Delta pilots.


Your assistance in correcting this provision is essential to the lives of many of your constituents and fellow Americans. Every effort should be made to ensure that Delta Air Lines lives up to their moral and contractual obligations to all employees as intended by Congress and the President.

On behalf of all Delta pilots, retirees, their families and friends, thank you for your efforts.
 
dl1011
Posts: 315
Joined: Tue May 18, 1999 6:42 am

RE: DL Pilots Only Group To Lose Pension

Fri Oct 13, 2006 12:34 am

It stinks but....I don't think the pilots will get very much sympathy from the other employee groups.

No other group had to option of a lump sum payout and the pilots union agreed to the termination.

http://www.airportbusiness.com/artic.../article.jsp?siteSection=1&id=8393

That is a link to a story on the pilots pension. The guy mentioned in the article walked away with a 1.2 MILLION dollar lump sum PLUS $6500 per month.

All of the other employees have had their pensions frozen. Meaning, nobody is building anything towards retirement except for the 401K. If you happened to be a 10-15 year employee when the plan was frozen, you can expect a big retirement check somewhere in the neighborhood of 800 bucks and that's before the social security offset kicks in.

I really don't think I'll be seeing any retired pilots standing on a street corner holding a cardboard sign.
 
xflyer
Posts: 39
Joined: Thu Oct 12, 2006 10:43 pm

RE: DL Pilots Only Group To Lose Pension

Fri Oct 13, 2006 2:38 am

If you read the story the monthly annuity is now zero. That is just one exaggerated example. I know one retired pilot who after 30+ years got no lump sum and is now getting $1600 a month for his hard earned retirement. Less than SS which he is not eligible for yet. Over 1400 of the retired pilots are getting a zero monthly check and many are getting so little they do not have enough to deduct their medical insurance and have to send money back to Delta. Who is next!!!
 
positiverate
Posts: 1543
Joined: Thu May 05, 2005 10:35 pm

RE: DL Pilots Only Group To Lose Pension

Fri Oct 13, 2006 2:54 am

Quoting Xflyer (Thread starter):
Delta has used the bankrupcy court to terminate only the pilots pension program.

A termination that ALPA, DP3 (representing the retired pilots), and DP2 (another retired pilot group) agreed to. The evidence regarding the necessity of termination of the Pilot Plan was placed before the Bankruptcy Court, which on September 5, 2006, found and ruled that the Pilot Plan must be terminated for Delta to obtain exit financing, submit a feasible plan of reorganization, and continue in business outside the Chapter 11 process. At paragraph 2 of the Court’s Order (copy attached), the Court ruled:

“But for the termination of the Pilot Plan, [Delta] will be unable to (i) obtain exit financing that would allow them to emerge from bankruptcy, (ii) submit a feasible plan of reorganization that would satisfy the standards of section 1129 of the Bankruptcy Code, (iii) pay all of their debts pursuant to a plan of reorganization and (iv) continue in business outside of the Chapter 11 reorganization process.”

Before issuing its Order, the Court made the following findings:

“[T]he evidence and the arguments…were and are overwhelming that the company had no alternative in the interest of all concerned, probably including retirees, to take the step that they took.”

“[I]t would appear to me, based on the economics, to be a virtual certainty that [a very large] number would have found it in their inescapable economic interest to retire and take the lump sum; which, had it happened, could, and I believe the evidence was [it] almost certainly would, have resulted in economic prejudice to those who didn't get to the window before the window closed.”

ALPA had come to the conclusion that there is no alternative to Plan termination even before Delta did. As a result, ALPA agreed in April 2006 not to oppose the termination of the Pilot Plan. Later, in May 2006, an organization called DP3 which represents over half of Delta’s pilot retirees, also reached an agreement with Delta whereby it did not put in opposition to the termination.

Likewise in July 2006, the Pension Benefit Guaranty Corporation stated its intention not to oppose Delta’s motion to the Court for approval of termination of the Plan. And finally, on September 5, 2006, another organization representing a smaller group of Delta pilot retirees, calling itself DP2, withdrew its opposition to the termination.

Quoting Xflyer (Thread starter):
Recent Pension reform legislation would enable Delta to continue the pension with a slight correction to the language.

It's not as simple as that. The lump sum freeze was a general will of Congress provision to encourage companies to get out of the defined benefit world. It had nothing to do with the airline provisions in the bill. Further, the Delta pilot group is not the only collective bargaining unit in America with a lump sum. A change from 2010 to 2007 also effects the lump sums for every other collective bargaining unit (airlines, steel, autos, etc.) in the United States. I am quite sure that politically, no one wants to choose sides between the pilots and the workers in the sectors mentioned above.

As far as whether a change to 2007 could/would save the plan, who knows? Lump sums contributed to the severe underfunding of that Plan, and the imminent and future effects of the lump sum feature on Delta (financially and operationally) were the Pilot Plan to remain in effect. Since the early 90's Delta pilots have had the right to elect to take 50% of their pension benefits in a lump sum payment upon retirement. In many cases those lump sum payments have exceeded $1 million. The Non Pilot Plan does not have an equivalent lump sum feature.

Since 2001, the Pilot Plan has paid out approximately $2.5 billion in lump sums to approximately 3200 pilots who elected early retirement, severely draining the Plan of a substantial portion of its assets. As a result of the payment of past and future lump sums, the cost to Delta of retaining the Pilot Plan would substantially exceed $1 billion in the near term alone, and likely would exceed $2 billion in the next 5 years.

Delta does not have and could not obtain sufficient resources to cover those costs, repay its $2.2 billion debtor in possession financing, obtain new financing necessary to support its operations, and successfully emerge from bankruptcy as a viable company.

Quoting Xflyer (Reply 2):
If you read the story the monthly annuity is now zero.



Quoting Xflyer (Reply 2):
I know one retired pilot who after 30+ years got no lump sum and is now getting $1600 a month for his hard earned retirement.

This is because the PBGC and Delta havent yet agreed upong the final details of what DL will pay to the PBGC to take over the plan. This will be a combination of cash and stock warrants. Furthermore, the evidence in Court showed that more than 90% of recent pilot retirees have already received 50% of their total retirement benefits in a lump sum payment (which in many cases exceeded $1 million). As a result, even after Plan termination, the average annualized pension benefit for existing pilot retirees, taking into account the value of the lump sums already received, would be approximately $75,000. In contrast, the average retirement benefit of Delta’s existing non-pilot retirees is approximately $16,600.

In addition, should the Pilot Plan not be terminated, and should additional significant numbers of pilots retire and take large lump sums from the Plan (as Delta and the Court were convinced would happen), current pilot retirees could well be substantially worse off if the Plan were then subsequently terminated.

Actuaries have estimated that current pilot retirees will retain, on average, approximately 75% of their total qualified and non qualified pension benefits.

Quoting Xflyer (Reply 2):
Who is next!!!

No one else at DL is next.
 
fewsolarge
Posts: 398
Joined: Wed Dec 29, 2004 7:37 am

RE: DL Pilots Only Group To Lose Pension

Fri Oct 13, 2006 4:04 am

That's the risk of collective bargaining. It can work to your advantage sometimes ... to your disadvantage sometimes. Market forces will keep Delta's total pilot compensation from getting too far away from the competition on the high or the low end.
 
tu154m
Posts: 610
Joined: Tue Oct 02, 2001 4:52 am

RE: DL Pilots Only Group To Lose Pension

Fri Oct 13, 2006 6:51 am

To all DL employees that are non-pilot, please look at the retirement modeler on the DL intra-net. The pilots are not the only ones without a pension.......
CEOs should swim with cement flippers!
 
xflyer
Posts: 39
Joined: Thu Oct 12, 2006 10:43 pm

RE: DL Pilots Only Group To Lose Pension

Fri Oct 13, 2006 7:17 pm

I will be my entire retirement annunity check that before it is over the rest of the employees will lose their retirement also. Delta did not go to bankruptcy just to come out with a pension liability. By the way the check is zero.
 
xflyer
Posts: 39
Joined: Thu Oct 12, 2006 10:43 pm

RE: DL Pilots Only Group To Lose Pension

Sat Oct 14, 2006 2:01 am

If Delta needs to terminate the retirement plans of pilots, why not the special bankruptcy proof packages of 33 executives, $65M. If the PBGC can look back 3 years to determine benefits why can't Delta. Why only the retired pilots, DALPA negotiated a package for active pilots. Management even highly compensated management retains their packages. Maybe only the retired pilots have no voice.
 
flyinghippo
Posts: 688
Joined: Thu Aug 11, 2005 12:48 am

RE: DL Pilots Only Group To Lose Pension

Sat Oct 14, 2006 2:24 am

I just don't understand this pension thing... Maybe I'm relatively young and did not grow up in the world of pension plans... but do pilots save a part of their income towards their retirement? (401K, IRA, Municipal Bonds, etc etc...)

I'm 31 years old, been working for 8 years. My first company had a great pension plan, but later on they cancelled it (IBM). My current company just froze their pension plans as well... however, from Day 1 of my professional career, I've been contributing to my 401K, and my wife and I save a certain amount each pay check towards our retirement.

Pilots are very smart people... in order to become a pilot, one must go through the training as rigorous as training to become a doctor... Perhapse airlines should also have a financial planning advisor to help their employees on how to SAVE THEIR MONEY...

Perhapse that's why I do not have a lot of sympathy of those who do not have pensions anymore...
 
positiverate
Posts: 1543
Joined: Thu May 05, 2005 10:35 pm

RE: DL Pilots Only Group To Lose Pension

Sat Oct 14, 2006 2:32 am

Quoting Xflyer (Reply 7):
Why only the retired pilots, DALPA negotiated a package for active pilots.

DP3 and DP2 negotiated your package for you representing the retired pilots.

Quoting Xflyer (Reply 7):
Maybe only the retired pilots have no voice.

DP3 and DP2 negotiated your package for you representing the retired pilots.

It would seem to me your gripe is with them. Not DL, not ALPA, not the non-pilot employees, and not Congress. They are the ones who were representing you.
 
ArtieFufkin
Posts: 671
Joined: Wed May 17, 2006 2:26 pm

RE: DL Pilots Only Group To Lose Pension

Sat Oct 14, 2006 3:00 am

Let's be clear here.

First, the future pensions: both groups will not be able to accumulate a pension in the future.

Secondly, the non-pilot accumulated pensions are 100% intact.

The pilot accumulated pensions are 87% whole. Covered by a combination of PBGC monies and a smaller Delta contribution.

So the petition is to recover the additional 13% owed?
 
Dalmd88
Posts: 2390
Joined: Fri Jul 28, 2000 3:19 am

RE: DL Pilots Only Group To Lose Pension

Sat Oct 14, 2006 4:38 am

True, all accrued non-pilot pensions are safe. The problem is anyone with less than 15 years doesn't have much accrued. Sure we have our 401k without any of the matching funds from pre Chpt 11. They were all DL stock so are pretty worthless.

As for the pilot's 401k, due to IRS rules they were limited to the amount they could contribute each year. I'm not sure of the figure, but is lower than the 20 some percent rank and file can contribute.
 
flyinghippo
Posts: 688
Joined: Thu Aug 11, 2005 12:48 am

RE: DL Pilots Only Group To Lose Pension

Sat Oct 14, 2006 4:58 am

Quoting DALMD88 (Reply 11):
As for the pilot's 401k, due to IRS rules they were limited to the amount they could contribute each year. I'm not sure of the figure, but is lower than the 20 some percent rank and file can contribute.

Yes, that is very true.... just like 99% of the companies in America. Some companies don't even have 401K programs.

Welcome to the real world.
 
xflyer
Posts: 39
Joined: Thu Oct 12, 2006 10:43 pm

RE: DL Pilots Only Group To Lose Pension

Sat Oct 14, 2006 6:32 am

Pension is deferred compensation that is negotiated in lieu of pay. It was to be put in a fund for retirement. Unfortunately Delta did not contribute the required amount to the fund.

Sort of like you contribute for 30+ years to your savings account. At retirement you go to withdraw it and the bank says, "We can't afford it we are going to keep half of what we owe you." You call for the police (courts) and they say "well the bank cannot get financing to remain in business if they have to pay you so we are sorry." Oops, they didn't even say sorry. By the way the bank president and officers not only keep your savings but give themselves large bonuses and options. Aka United and US Air. That's business nowdays and unfortunately Delta is no different. No morals or integrity.
 
ArtieFufkin
Posts: 671
Joined: Wed May 17, 2006 2:26 pm

RE: DL Pilots Only Group To Lose Pension

Sat Oct 14, 2006 7:02 am

Hey pensions should have first priority in a bankruptcy. As you say it's a promise made by Mgt (indirectly by the owners) .

But that's just me. I'm a Democrat. Now proceed to the FEC website and search under "Delta Air" for campaign contributions. Wow! All those Delta pilots giving to the RNC. Because I guess the RNC is all about protecting workers?


Talk about shooting yourself in the foot.
 
gigneil
Posts: 14133
Joined: Fri Nov 08, 2002 10:25 am

RE: DL Pilots Only Group To Lose Pension

Sat Oct 14, 2006 8:51 am

Quoting DALMD88 (Reply 11):

As for the pilot's 401k, due to IRS rules they were limited to the amount they could contribute each year. I'm not sure of the figure, but is lower than the 20 some percent rank and file can contribute.

The IRS allows a certain amount. Historically, $13,000. Recently $14,000. Will go up to $15,000.

Likely, pilots need to be capped below 20 percent because they would overshoot that figure.

NS
 
vv701
Posts: 5773
Joined: Fri Aug 19, 2005 10:54 am

RE: DL Pilots Only Group To Lose Pension

Sat Oct 14, 2006 10:14 am

Quoting Positiverate (Reply 3):
At paragraph 2 of the Court's Order (copy attached), the Court ruled:

"But for the termination of the Pilot Plan, [Delta] will be unable to (i) obtain exit financing that would allow them to emerge from bankruptcy, (ii) submit a feasible plan of reorganization that would satisfy the standards of section 1129 of the Bankruptcy Code, (iii) pay all of their debts pursuant to a plan of reorganization and (iv) continue in business outside of the Chapter 11 reorganization process."

To a European it is clear that DL should not emerge from Chapter 11 protection if, after reorganization, it cannot meet all its obligations or negotiate an alternative agreed solution with, in this case, its pilots. The US Courts ordering DL not to meet its financial obligations to its staff is one of the reasons that North American Chapter 11 bankruptcy protection is seen as creating a very unlevel playing field for European airlines.

Consider, for example, BA. It has a contributory pension plan for its staff. Originally BA was contributing around twice as much as their staff to the scheme - a fairly standard situation in the UK. However with a significant growth in life expectancy and decreasing investment returns, in recent years BA's pension contributions have been increased to five times that of their employees.

Despite this increase in contributions the actuarial deficit in the BA Pension Plan has been growing more and more rapidly. It is now calculated at £2.1 billion (US $ 3.9 billion). To meet the pension plan's current and forecast future obligations it is estimated that BA will have to further increase its contributions by a factor of 2.5 to around 12 times their employees contributions. Simplistically they have two other alternatives. One is to negotiate a change in the plan with current employees (such as an increase in retirement age or an increase in employee contributions). The other is to declare bankruptcy and go out of business.

While the current situation persists, however, Willie Walsh, BA CEO, has said that there will be no new BA aircraft orders.

So DL has the protection of the US Courts because it has lost an absolute fortune. And the court has said they can ditch their pension responsibilities because, as the Judge points out, they cannot otherwise emerge from bankruptcy. On the other hand BA, who last year were the world's most profitable passenger airline, cannot ditch their pension scheme under any circumstances not willingly agreed by their staff. And the current deficit in the BA pension plan is preventing them from ordering new aircraft.

So as I see it today DL pilots are being ordered by the Court to subsidise DL's management. This subsidy will enable them to expand the airline's international operations. This is preferable to even maintaining their domestic operations as their domestic competition can seek the same protection from the US Courts while their international competition cannot obtain any bankruptcy protection. This gives them a significant and totally unjustifiable competitive advantage.

The US court is also favouring the bankrupt DL over the non-bankrupt Boeing. Making the order will increase competition by lowering DL's cost base. So any BA 748 or 787 order may be further postponed or perhaps cancelled to the detriment of Boeing employees.
 
ContnlEliteCMH
Posts: 1375
Joined: Wed Mar 02, 2005 8:19 am

RE: DL Pilots Only Group To Lose Pension

Sat Oct 14, 2006 10:48 am

Quoting Gigneil (Reply 15):
The IRS allows a certain amount. Historically, $13,000. Recently $14,000. Will go up to $15,000.

Likely, pilots need to be capped below 20 percent because they would overshoot that figure.

NS

It's $15k this year. http://www.job-employment-guide.com/401k-rules.html

The 20% figure is likely due to the specific plan at DL, not the more general IRS rule. The IRS requires plans to meet some standard of fairness, such that highly-paid employees don't use the plan to avoid taxes while employees making small wages see little benefit.

A couple of examples:

(1) A prior employer capped all of us at 12%. I asked them to remove the percentage so that I could contribute the maximum dollar value permitted by law, but they refused to resubmit the plan.

(2) A buddy of mine works for a $200MM/year restaurant chain based in Columbus. You are not eligible for 401(k) enrollment until a full year after employment. Why? The vast majority of their employees are waitstaff, for which the turnover value is well over 50% annually. Transient employees don't tend to use the plan anyway, so in order to meet the fairness standards, the restaurant requires the waiting period. The reasoning is that if you stick around a year, you're a real employee, but even then only some of the more stable waitstaff actually use the plan.

If it's true that the pilots are 87% covered, then only those pilots who aren't on retirement's threshold have a chance to take care of themselves, right?
Christianity. Islam. Hinduism. Anthropogenic Global Warming. All are matters of faith!
 
aircanada014
Posts: 1224
Joined: Sun Oct 09, 2005 2:24 pm

RE: DL Pilots Only Group To Lose Pension

Sat Oct 14, 2006 5:38 pm

Thats one airline you don't want to apply for a job if they can't offer pension plan  Smile Good thing AC haven't terminate their pension plan. I think CO is the other airline still have pension plans for their employees?.
 
xflyer
Posts: 39
Joined: Thu Oct 12, 2006 10:43 pm

RE: DL Pilots Only Group To Lose Pension

Sat Oct 14, 2006 9:24 pm

Many lost 50% of their retirement including the lump sum. Most will lose between 30-50% of their retirement. Many who retired early are in the 55-60 age range, pay all their medical expenses, and have difficultly getting rehired despite vast experience. Coupons were sent out to pay medical and other deductions to many because the remaining pay is insufficient to cover those items. ONLY RETIRED PILOTS LOST THEIR PENSION, no one else in the company.
 
dl1011
Posts: 315
Joined: Tue May 18, 1999 6:42 am

RE: DL Pilots Only Group To Lose Pension

Sun Oct 15, 2006 12:49 am

"ONLY RETIRED PILOTS LOST THEIR PENSION, no one else in the company."

Once again, the pilots union AGREED to not fight the pension termination. Go bitch to your union.


None of the employee's are accruing pension benefits right now. The defined benefit pension is dead. The cash balance plan is dead. The 401K match is gone. Everybody lost except Leo and Burns and the other thieves.

Once again, while the non-pilot pensions have not been turned over to the PBGC (yet), the plans are frozen and nobody is accruing any more towards retirement.

I hate to sound uncaring but I really don't care if the pilots lost their retirements. They had the lump sum option and years of big paychecks. There is no reason at all why they didn't take 10% of their paycheck and invest it for retirement JUST IN CASE something happened to DL. It's not like the industry has never screwed over their employee's.
 
gigneil
Posts: 14133
Joined: Fri Nov 08, 2002 10:25 am

RE: DL Pilots Only Group To Lose Pension

Sun Oct 15, 2006 12:56 am

Quoting ContnlEliteCMH (Reply 17):
The IRS requires plans to meet some standard of fairness, such that highly-paid employees don't use the plan to avoid taxes while employees making small wages see little benefit.

This is also generally more true of plans that provide matching, since higher dollar value employees would then benefit more from the match.

My company lets us contribute up to 100% of our salary, even though our company-wide median salary is $93,000. For people with dual incomes that can live the first few months of the year with one paycheck, or single folks that can skip a few due to budgeting or savings, you get your money in the market and earning much more quickly.

NS
 
positiverate
Posts: 1543
Joined: Thu May 05, 2005 10:35 pm

RE: DL Pilots Only Group To Lose Pension

Sun Oct 15, 2006 1:12 am

Quoting Xflyer (Reply 19):
ONLY RETIRED PILOTS LOST THEIR PENSION, no one else in the company.

And, again, this is a point you keep making. And, again, people keep telling you that ALPA, acting on the active pilots behalf, and DP2 and DP3 acting on the retired pilots behalf, negotiated this termination and signed off on it. What are you missing here?
 
xflyer
Posts: 39
Joined: Thu Oct 12, 2006 10:43 pm

RE: DL Pilots Only Group To Lose Pension

Sun Oct 15, 2006 2:46 am

ALPA has said they do not and will not represent retired pilots. DP3 represented 2800 of 5800 pilots and the bankruptcy court decided to make it binding on all. 3000 pilots were never given the time to object or make their voices heard. DP2 was supported by 68 pilots and did not have the resources to fight. Maybe I should not have supported the legislation that saved the pensions of all the other employees.
 
surfdog75
Posts: 239
Joined: Thu Nov 17, 2005 5:39 am

RE: DL Pilots Only Group To Lose Pension

Sun Oct 15, 2006 2:59 am

There's no doubt that the pilots provided the lion's share of the funding to keep this operation afloat. It's unfortunate and unethical that someone's retirement should ever be in question once they have stopped working. A freeze of current assets is the worst that should happen to any active employee. Employee obligations should be non-negotiable.
 
supa7E7
Posts: 1360
Joined: Fri Aug 27, 2004 2:05 am

RE: DL Pilots Only Group To Lose Pension

Sun Oct 15, 2006 5:11 am

Quoting Xflyer (Reply 7):
If Delta needs to terminate the retirement plans of pilots, why not the special bankruptcy proof packages of 33 executives, $65M. If the PBGC can look back 3 years to determine benefits why can't Delta. Why only the retired pilots, DALPA negotiated a package for active pilots. Management even highly compensated management retains their packages. Maybe only the retired pilots have no voice.

Why should retired employees have a voice in a company?

Management may be greedy. Maybe they did not deserve $65M in pensions, but they negotiated with the company owners (Board) and got it funded. It is worth pointing out that $65M is a small figure in the realm of DL. That is only 1% of the money needed for the pilot program. Should we eliminate the mgmt pensions, yes perhaps we should. But that is up to the creditors and the court, not random people or even retired DL pilots.
"Who's to say spaceships aren't fine art?" - Phil Lesh
 
vv701
Posts: 5773
Joined: Fri Aug 19, 2005 10:54 am

RE: DL Pilots Only Group To Lose Pension

Sun Oct 15, 2006 8:29 am

Quoting Supa7E7 (Reply 25):
Why should retired employees have a voice in a company?

They should not. But they clearly should have a voice in any pension plan of which they are a member.
 
positiverate
Posts: 1543
Joined: Thu May 05, 2005 10:35 pm

RE: DL Pilots Only Group To Lose Pension

Mon Oct 16, 2006 12:16 am

Quoting Xflyer (Reply 23):
DP3 represented 2800 of 5800 pilots and the bankruptcy court decided to make it binding on all.

Again, DP3 represented you. You should complain to them, not the company or to an internet board.

Quoting Xflyer (Reply 23):
Maybe I should not have supported the legislation that saved the pensions of all the other employees.

AH, the old "if I can't have ny retirement then nobody can" argument.
 
xflyer
Posts: 39
Joined: Thu Oct 12, 2006 10:43 pm

RE: DL Pilots Only Group To Lose Pension

Mon Oct 16, 2006 10:52 am

DP3 did not represent anyone except their self interest and line the pockets of their incompetent lawyers. DP3 did not represent 3000 pilots. All we are asking in to have the same consideration as all the rest of the employees. A small correction will give Delta 17 years (10 more than other companies) to fund and pay the pilot pension in addition to the rest of the company.
 
ScarletHarlot
Posts: 4251
Joined: Tue Jul 22, 2003 12:15 pm

RE: DL Pilots Only Group To Lose Pension

Mon Oct 16, 2006 11:54 am

Quoting Xflyer (Reply 13):
Unfortunately Delta did not contribute the required amount to the fund.

No sir, this is not correct. For most of its lifetime Delta's pension plans were very well funded. In fact, Delta had a seven year (if I remember correctly) "contribution holiday" just before 2001 because the plans' assets were increasing more than their liabilities.

When 9/11 happened it was the worst of all worlds. Assets tanked, revenue tanked, large contributions were required, and a whole ton of pilots retired and took their lump sums.

Did you know, sir, that for years Delta's pilots and pilots' union refused to obey plan requirements? In the contract it was stated that the pilots had to give 30 days notice before they retired so that Delta could prepare to pay out the lump sums. However, the union refused to enforce this provision, and the pilots insisted that they could give one day's notice and that Delta had better find their $1 million plus lump sum money right away.

Quoting Gigneil (Reply 15):
The IRS allows a certain amount. Historically, $13,000. Recently $14,000. Will go up to $15,000.

Likely, pilots need to be capped below 20 percent because they would overshoot that figure.

Note that in many plans after-tax contributions are also possible, and are not part of the DC limit.

Quoting Dl1011 (Reply 1):
The guy mentioned in the article walked away with a 1.2 MILLION dollar lump sum PLUS $6500 per month.

Yes. This was pretty typical of the pilots' pensions that I calculated.

Quoting Xflyer (Reply 23):
Maybe I should not have supported the legislation that saved the pensions of all the other employees.

I point out that many of the pilots were earning about $300,000 per year before their retirement. Employees covered by the Family Care Plan (for all other employees) were almost certainly not earning that much. Someone who earned $300,000 per year is more likely able to take a financial hit than a flight attendant who maxed out at $60,000 per year, for example.

Also, sir, I can tell you from my experience calculating Delta pilots' pensions that nearly all of the pilots took their lump sum. A $1 million lump sum, invested wisely, should be returning at least $70,000 a year in interest without touching the principal. So even though the remaining pension might be zero, that lump sum money is still available to generate income for the pilot. Nobody in the Family Care Plan had the opportunity to take a lump sum.

Delta's pilots' benefits - not just their pensions, either - were way too generous for way too long. They cost too much for the company and are one factor in its financial situation today. It is unfortunate that some retired pilots are losing their remaining annuity payments, but the ones that are are the ones who took the lump sum and who, if they were wise, invested it so that they could be comfortable for the rest of their lives.
But that was when I ruled the world
 
xflyer
Posts: 39
Joined: Thu Oct 12, 2006 10:43 pm

RE: DL Pilots Only Group To Lose Pension

Mon Oct 16, 2006 10:39 pm

[/quote]
Did you know, sir, that for years Delta's pilots and pilots' union refused to obey plan requirements? In the contract it was stated that the pilots had to give 30 days notice before they retired so that Delta could prepare to pay out the lump sums. However, the union refused to enforce this provision, and the pilots insisted that they could give one day's notice and that Delta had better find their $1 million plus lump sum money right away. [/quote]

That provision was never a part of any recent contract and what difference would 30 notice make in required pension funding.

It is not about how much retiring pilots received. It is about what is promised and owed. Trying to ensure that everyone gets an equal amout is not what capitalism and demoracy is about. It is about equal OPPORTUNITY!
 
ScarletHarlot
Posts: 4251
Joined: Tue Jul 22, 2003 12:15 pm

RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 12:23 am

Quoting Xflyer (Reply 30):
what difference would 30 notice make in required pension funding.

Here is something to understand. Delta's pilots' pension benefits were large enough that they exceeded regulatory limits. Only the amount up to the limits is actually funded - this is referred to as a qualified benefit. Companies can and must set aside funds (that are not taxed) to pay for qualified pension benefits. Anything over that is referred to as a non-qualified benefit and is paid for out of general revenues - and are NOT guaranteed. The lump sum benefits are non-qualified. Non-qualified pension benefits should always be considered a bonus and not counted on since there is nothing backing them up - no money set aside to pay them. This is why most pilots took their lump sum and ran - because if they took an annuity it would be at risk.

Therefore, the lump sum benefits are paid out of general Delta funds, NOT the pension trust, and when you have 300 pilots retiring and all taking lump sums of $1 million, with little to no warning, Delta had to find $300 million almost immediately. At least if the pilots had obeyed the 30 day rule Delta would have had 30 days to find this $300 million.

Quoting Xflyer (Reply 30):
That provision was never a part of any recent contract

Yes sir, it absolutely was. In 2003 this was part of the contract. I can assure you of this, sir, because I am the person who managed development and implementation of Delta's pension calculation system and who performed the pension calculations for the pilots for several months in 2003.

I am sorry that you are not going to receive the benefits you were promised. I think it is an awful thing to not pay benefits to retirees already receiving them. But, I have less sympathy for you, who was presumably entitled to a $1 million lump sum, than I do for my flight attendant friend, who, after the Western acquisition and 15 years of service with Delta, is receiving a pension of $1500 per month. She was given a promise by Delta that her retiree medical would be free until she became eligible for Medicare. Now, Delta is looking at breaking that promise. She can afford this a lot less than pilots who got a $1 million lump sum can afford to lose 13% of their pension. I assume that your retiree medical will continue to be paid by Delta, sir?

Your point is valid but I am rather offended this statement:


Quoting Xflyer (Reply 23):
Maybe I should not have supported the legislation that saved the pensions of all the other employees.

Generally, the pilots (retired or not) are in a lot better financial position than "the other employees". Leo Millions and his minions notwithstanding - nobody can defend their actions.
But that was when I ruled the world
 
bucky707
Posts: 954
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RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 12:29 am

Quoting ScarletHarlot (Reply 31):
At least if the pilots had obeyed the 30 day rule Delta would have had 30 days to find this $300 million.



Quoting ScarletHarlot (Reply 31):
Yes sir, it absolutely was. In 2003 this was part of the contract

If it was a part of the contract, tell me then, how did pilots manage to retire with less than 30 days notice? You think the company just decided to let them go.......and give them their money?
 
positiverate
Posts: 1543
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RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 1:20 am

Quoting Xflyer (Reply 28):
A small correction will give Delta 17 years (10 more than other companies) to fund and pay the pilot pension in addition to the rest of the company.

But that is NOT what you're asking for. You're asking for the lump sum freezes in the bill to kick in on date of enactment. That's a non-starter because you don't have the political muscle to take on the steel unions, auto unions, and other unions that have negotiated lump sums into their CBA's and don't want thir lump sums frozen before 2010.
 
xflyer
Posts: 39
Joined: Thu Oct 12, 2006 10:43 pm

RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 2:18 am

Quoting Positiverate (Reply 33):



Quoting Positiverate (Reply 33):
But that is NOT what you're asking for. You're asking for the lump sum freezes in the bill to kick in on date of enactment. That's a non-starter because you don't have the political muscle to take on the steel unions, auto unions, and other unions that have negotiated lump sums into their CBA's and don't want thir lump sums frozen before 2010.

That is exactly what we are asking for. Wording could be for lump sum freeze for any company in bankruptcy. Wording could be specific to Delta if necessary since the legislation was specific in giving them an extra 10 years.

Quoting ScarletHarlot (Reply 31):
Yes sir, it absolutely was. In 2003 this was part of the contract. I can assure you of this, sir, because I am the person who managed development and implementation of Delta's pension calculation system and who performed the pension calculations for the pilots for several months in 2003.

Maybe that is why the fund is in such bad shape. Why was the fund not properly funded? If it was part of the contract Delta would have enforced it.
 
ScarletHarlot
Posts: 4251
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RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 2:33 am

Quoting Bucky707 (Reply 32):
how did pilots manage to retire with less than 30 days notice?

It was a combination of union stubbornness, Delta's leniency, and a bad precedent set. When times were good, it wasn't a big deal and Delta allowed the 30 day deadline to slip. This set a precedent that the union exploited. When Delta went to the union and said that it was starting to cause a problem the union used this precedent to insist that they did not have to follow the 30 day window.

Note that this is my recollection of what I was told and may not be exact but I am quite sure I got the gist of it.

Quoting Xflyer (Reply 34):
Maybe that is why the fund is in such bad shape. Why was the fund not properly funded?

You are not reading my posts. The majority of the lump sums were NEVER funded since they are non-qualified amounts. This is perfectly proper and legal. Perhaps you should learn more about the Internal Revenue Code before you push for your rights under it.
But that was when I ruled the world
 
bucky707
Posts: 954
Joined: Sat Aug 19, 2000 2:01 am

RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 2:57 am

Quoting ScarletHarlot (Reply 35):
When times were good, it wasn't a big deal and Delta allowed the 30 day deadline to slip.

You claim to be involved so I won't argue too much. But, I looked through every contract and or side letter we have had since 2000. I cannot find one where the contract stated a pilot had to give 30 days notice. It may have been the way things were usually done, but it was not in the contract.
 
ScarletHarlot
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Joined: Tue Jul 22, 2003 12:15 pm

RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 3:29 am

Quoting Bucky707 (Reply 36):
It may have been the way things were usually done, but it was not in the contract.

Thanks. It is my understanding from my Delta friends that it was in the pilots' contract but it is certainly possible that I misunderstood. This is the story I remember being told but it was four or five years ago. You have the contract in front of you and I only have my memory!  Smile
But that was when I ruled the world
 
xflyer
Posts: 39
Joined: Thu Oct 12, 2006 10:43 pm

RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 5:54 am

Quoting ScarletHarlot (Reply 31):
Yes sir, it absolutely was. In 2003 this was part of the contract. I can assure you of this, sir, because I am the person who managed development and implementation of Delta's pension calculation system and who performed the pension calculations for the pilots for several months in 2003.



Quoting Bucky707 (Reply 36):
But, I looked through every contract and or side letter we have had since 2000. I cannot find one where the contract stated a pilot had to give 30 days notice. It may have been the way things were usually done, but it was not in the contract.



Quoting ScarletHarlot (Reply 37):
Thanks. It is my understanding from my Delta friends that it was in the pilots' contract but it is certainly possible that I misunderstood. This is the story I remember being told but it was four or five years ago. You have the contract in front of you and I only have my memory!

Glad the facts did not keep you from expressing your opinions.
 
ScarletHarlot
Posts: 4251
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RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 6:33 am

Quoting Xflyer (Reply 38):
Glad the facts did not keep you from expressing your opinions.

You are correct, I spoke too soon and too strongly on this item. I apologize.
But that was when I ruled the world
 
xflyer
Posts: 39
Joined: Thu Oct 12, 2006 10:43 pm

RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 6:51 am

Now that is a class act.
 
ScarletHarlot
Posts: 4251
Joined: Tue Jul 22, 2003 12:15 pm

RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 7:39 am

Quoting Xflyer (Reply 40):
Now that is a class act.

I hope that is not sarcasm!  Smile

I loved working with Delta and felt a great deal of pride and responsibility to do the best job I could for Delta folks. I was at Delta's head offices in Atlanta on 9/11 and after that I watched my Delta friends go through the painful restructuring. Several of them took early retirement or leaves, or lost their jobs. This whole thing is heartbreaking. It was awful to see the bonuses that Leo Millions was taking while cutting jobs. That $11 million (or whatever the sum was) would have paid for several of my friends' jobs for a few years.

I do think that the pilots' union was too heavy handed and refused to consider cost cutting and administrative measures until it was too late. I am glad they are doing so now because without these cost savings there could be no Delta at all. But then Delta's plans were quite well funded for many years and it was 9/11 that caused it all to go into the toilet. Who could have expected that?

There certainly has been a shift in the defined benefit world in the 11 years I've been involved with DB in the States. The company I work for created a much less rich cash balance plan and that is what all new employees go into. That's what I'm in. In my job I have to know what all our old plans were like and they were very much richer than what I will receive. But I would rather I am promised less from the start than that people who have depended their whole working careers on this promise of a pension receive nothing. At least I have time to plan to receive the smaller amount.
But that was when I ruled the world
 
DL787932ER
Posts: 575
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RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 7:57 am

I hope this is not a dumb question but I have been wondering about it for quite some time, after hearing plenty about both sides of the issue from friends and family who are DL pilot and non-pilot employees and retirees.

Since the entire pension issue was renegotiated with DALPA and with the retired pilots' groups, and since DL's claim was that it was the lump sum provision that prevented them from keeping the pilots' pension after the legislation that saved the rest of the employees' pensions was passed, why wasn't the pilots' pension renegotiated to remove the lump sum benefit? It seems to me that the pilots' pension without that benefit would still be preferable to whatever the PBGC pays, plus DL's equity note. Was the pilots' pension plan still too expensive for DL even without the lump sum provision, contrary to what I have heard, or was there some other reason that the negotiators couldn't agree to remove only that part and save the rest after the necessary legislation was passed?
F L Y D E L T A J E T S
 
positiverate
Posts: 1543
Joined: Thu May 05, 2005 10:35 pm

RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 8:13 am

Quoting Xflyer (Reply 34):
Wording could be specific to Delta if necessary since the legislation was specific in giving them an extra 10 years.

Wrong. The wording was not specific to any company. Any airline could have taken advantage of the funding rule.

Quoting DL787932ER (Reply 42):
why wasn't the pilots' pension renegotiated to remove the lump sum benefit?

ALPA was opposed to removing the lump sum.
 
xflyer
Posts: 39
Joined: Thu Oct 12, 2006 10:43 pm

RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 8:03 pm

Quoting DL787932ER (Reply 42):
why wasn't the pilots' pension renegotiated to remove the lump sum benefit? It seems to me that the pilots' pension without that benefit would still be preferable to whatever the PBGC pays, plus DL's equity note.

An excellent question. Both were negotiated prior to the legislation being passed. I do not know the agenda of DALPA other than they refused to represent the retired pilots and negotiated $650M cash and $1.5B note for the active pilots. DP3 negotiated as a class action despite never being designated as such. Over 60% of retired pilots never contributed to or withheld payment from DP3. Yet the ruling is binding on all retirees. Neither DP3 or DALPA tried to use the new legislation for the people they supposedly represented. That is why the decision to terminate is now being appealed and we are requesting help (via the petition) from legislators.
 
positiverate
Posts: 1543
Joined: Thu May 05, 2005 10:35 pm

RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 10:31 pm

Quoting Xflyer (Reply 44):
Neither DP3 or DALPA tried to use the new legislation for the people they supposedly represented.

No, they did. But they also looked at the numbers and the fact that, through ALPA's foot dragging in renegotiating a contract combined with the bankruptcy court preventing DL from making contributions to the plan, the plan wa sbecoming more and more underfunded to the point that nothing in the legislation would save the pilot plan. The cost to Delta of retaining the Pilot Plan would substantially exceed $1 billion in the near term alone, and likely would exceed $2 billion in the next 5 years. Delta does not have and could not obtain sufficient resources to cover those costs, repay its $2.2 billion debtor in possession financing, obtain new financing necessary to support its operations, and successfully emerge from bankruptcy as a viable company.

Again, unfortunately, there is nothing that can be changed in the legislation to save the pilot plan. Like I said in an earlier post, You're asking for the lump sum freezes in the bill to kick in on date of enactment. That's a non-starter because you don't have the political muscle to take on the steel unions, auto unions, and other unions that have negotiated lump sums into their CBA's and don't want thir lump sums frozen before 2010.

Also, again, keep in mind that the final takeover of the plan by the PBGC hasn't yet occurred. DL is still negotiating what cash and warrants they will give to PBGC. This will dramatically effect how much a pilot receives every month.
 
xflyer
Posts: 39
Joined: Thu Oct 12, 2006 10:43 pm

RE: DL Pilots Only Group To Lose Pension

Tue Oct 17, 2006 11:20 pm

Quoting Positiverate (Reply 45):
Also, again, keep in mind that the final takeover of the plan by the PBGC hasn't yet occurred. DL is still negotiating what cash and warrants they will give to PBGC. This will dramatically effect how much a pilot receives every month.

I can hardly wait for that announcement. More worthless promises (warrants) are just what my retirement needs. Check out the value of US Air and United warrants.
 
positiverate
Posts: 1543
Joined: Thu May 05, 2005 10:35 pm

RE: DL Pilots Only Group To Lose Pension

Wed Oct 18, 2006 12:31 am

Quoting Xflyer (Reply 46):
I can hardly wait for that announcement. More worthless promises (warrants) are just what my retirement needs. Check out the value of US Air and United warrants.

Let's see. The PBGC had assumed $10 billion in pension liabilities from United Airlines and the old US Airways and was eligible as an unsecured creditor in bankruptcies at both carriers to accept stock in the restructured companies.
They then obtained 6% of US Airways and took around a 20% share in United as I recall.

That's worth a chunk.
 
xflyer
Posts: 39
Joined: Thu Oct 12, 2006 10:43 pm

RE: DL Pilots Only Group To Lose Pension

Wed Oct 18, 2006 4:34 am

Quoting Positiverate (Reply 47):
That's worth a chunk.

Ask a United or US Air retiree how much it helped him. Maybe helped the PBGC.
 
positiverate
Posts: 1543
Joined: Thu May 05, 2005 10:35 pm

RE: DL Pilots Only Group To Lose Pension

Wed Oct 18, 2006 5:53 am

Quoting Xflyer (Reply 48):
Ask a United or US Air retiree how much it helped him. Maybe helped the PBGC.

Because the economics were different. UA dumped $10 billion in liabilities. The warrants that DL gives, combined witht he PBGC guarantee and the fact that PBGC has a much lower obligation ensures that DL's pilots (and retired pilots) get far more then UA and US's guy's did. It's simple math.

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