Originally Posted by
DoubleTrouble
American management was quite surprised when the PBGC actually said no. During the years when USAir, UAL and DAL lost their retirements the head of the PBGC was quite receptive to accepting almost any plan presented. In 2008 we had a new administration come in and with that new Admin came a new head of the PBGC, as the PBGC is hybrid government/corporate agency. When AMR filed with a lot of cash the new head of PBGC said, “prove you can’t reorganize with with your pension obligations.” Here we are today. Politics matter.
You are correct that if we had a new qualified plan that was someday terminated it would go to the PBGC. BUT, and this is a big *******ing BUT, once an individual has reached the PBGC max from one (or more) plan(s), that individual get ZERO more dollars from the PBGC regardless of how many more plans are turned over to them and what that individual would be owed. This is one of the reasons this “older”pilot does not want a new DB plan.
Americans plans were reasonably funded and in no danger of termination. Delta’s plan had 5 billion in assets and 1 billion in funds. This was driven by the massive increases in FAE. Prior to 99 most FAE’s were around 180 to 200K. With the huge spike in GS’s and the 01 contract FAE’s soared to 360 to 400k. Add in a crashing market, lump sum payouts from early outs boosted by falling interest rates and a well funded plan dropped to 20%.