Originally Posted by
Carl Spackler
Total BS. NWA pensions were the same as Delta's except for one thing. NWA pilots pension didn't have the lump sum option. The same drying up of market returns happened to the NWA pension, yet we were able to save ours due to the freeze. When the senior Delta guys took most of the money out at once due to their lump sum rights...THAT'S what ruined the pension.
Carl
Carl, It was partly the lump sum option but the bigger issue was the huge increase in FAE for Delta pilots. FAE's above 200k were almost unheard of prior to 1996. With a company choice to run the airline on GS's instead of reserves the FAE went to the moon. Most guys retiring had FAE's in the mid 350k range. This change occurred in a 5 year span. Pensions that were funded under one payout assumption now had to pay out almost double. In addition the company did not contribute a single dime to the Delta pension funds for almost 7 years. Legal under the law but not smart.