Originally Posted by
Timbo
Frozen means they kept all of what they had accrued to that point, as in they didn't lose any of it.
Not like Delta's DB fund, where it was flushed down the PBGC toilet.
Here's the funny part. When American was in bankruptcy, they were told they had to flush their DB (A fund) too.
There was just 'no way' they could keep it.
Guess what?
They kept it.
I've spoken with some guys who were on the 'inside' back when Delta was in bankruptcy. We knew our plan was underfunded, and met the levels to be given to the PBGC, but I was told that if we had reduced our payout to 49% FAE instead of 60% FAE, our plan could have survived.
I was told Lee Moak wanted all or none, not a reduction to 49% FAE.
What's Lee's ALPA retirement plan now that he's an A4A lobbiest I wonder...
I am not sure where Timbo gets the above information. I have a lot of friends at AMR. Their B fund was a much smaller fund then what Delta had paying about half the benefit as the 60% FAE plans. This was because they also had a B fund. At the time of the chapter 11 filing the fund was not in distress and had adequate funding. You can't terminate a fund unless it is in distress and meets the but for test. That means that but for retaining the plan the company could not emerge from chapter 11. This was never a serious threat at AMR and management and the pilots were well aware of that. American had 5 billion in cash on hand and could have easily written a check for any shortage.
This was vastly different then the situation at Delta where the plan was declared in distress and in fact was only 20% funded with a shortfall of 4 billion dollars.
The various pots of money should provide most Delta pilots with 70 to 90% of their frozen benefit. I made some dumb financial moves and have basically let fidelity manage the rest and will easily be at 80% plus which is better then a 49% FAE and its all in my own name. Many pilots who were smarter then me are reporting they will be completely whole plus.
I am also unaware of any legal option to have reduced a earned and accrued plan to a 49% FAE. I don't believe pension law allows for that. Since the plan was only 20% funded I doubt it would have helped much.