Originally Posted by
Buck Rogers
So here is my quick proposal. 2% COLA yearly as a plus up on PBGC/frozen NW DC plans. Assume avg monthly payout is 4K a month....that's roughly 50k a year. So the increased cost would be about 1/4 to 1/2 % for the 11k pilots
So ....
pretty modest "ask"....certainly not a bank buster, it is achievable and way way less than what was being touted before. The previous ask was so outlandish IMO....management laughed and the issue became so divisive that the pilot group went even try to understand the situation. To them it is a money grab, when quite possibly there may be some merit to the issue.
Normally I would say let the union work it out, unfortunately last time their ask "poisoned the well" due to it's extremis,,,,,,,and so, here we are
Assuming we would do this responsibly with an annuity which belonged to the pilot, not subject to bankruptcy or a subsequent pilot group deciding to modify the agreement in future negotiations:
At today's rates, that is a transfer of $1.048.496 per pilot without your COLA. Guessing that not all pilots are going to age 65, we can expect in the vicinity of 550 retirements per year, or $
577,500.000.00 so about $3 Billion dollars if the next contract takes us through a 5 year cycle.
To make that work, the lift would be somewhere in the vicinity of 20% of payroll. ..... but sure, if you can make the math work at 1/4 of 1%, I'm in. In fact, if you can do that you should have your own show and knock Jim Cramer off the air.
It would make sense for us to remember the reason Am. West, US Air, United, Delta and Northwest went into bankruptcy,, more than any other reason, was to scrub pensions off their books and toss them on the PBGC. Delta's CEO was the CFO for that. It can be guessed that he would be against a defined benefit plan, even if we were willing to forgo other forms of compensation to transfer large amounts of wealth to our most senior and highly paid pilots.