Originally Posted by
sailingfun
There is so much wrong with his reply I will only mention one thing.
Pennies on the dollar for retirement? Most pilots will recover between 70 and 85 percent of what they were due. I would hardly call the pennies. There are 4 different components to the recovery. The MPP money, The note Money, the PBGC money and DC plan contributions. New pilots may actually exceed what the old plan provided because of front loaded contributions. Notice I did not mention the claim or merger stock money. Both of those were to help offset the pay cuts under the 1113 contract. Yes it went into the retirement fund up to the 415 limits but you could have recouped a portion of that in cash by a reduction in 401k contributions to equal the amount deposited. One other thing to keep in mind. The Delta MEC made a decision to allow the plan termination because they felt that the cost to retain the plan would have impacted the junior pilots far more then the senior pilots. They felt that going for the note payment and stock to the PBGC in the termination would better serve the entire seniority list. Keep in mind the plan was frozen under the Malone administration.
I would disagree on only one point. The pension was terminated because it was funded at less than 50%, billions underfunded, and if the fund were restored it faced another run on the bank by pilots retiring with lump sums. There was no bank, hedge fund, or any other entity that would loan Delta any money to exit bankruptcy knowing that the entire amount could get swallowed into the pension and leave the company in the same boat it was in when it went into bankruptcy.
There was no reasonable probability that Delta would ever exit bankruptcy with that battered, beaten pension plan. Rather than hope against hope that we could "save" the pension by destroying the rest of the contract, the MEC decided not to get "double dipped" like US Air and United did. We threw the pension issue on the table from the beginning and were determined not to let management get two bites at the apple. By including the pension up front the Delta MEC came out of bankruptcy with work rules intact, the highest pay rates, the largest claim, and the largest note than any other bankrupt carrier. Also, despite the loss of the 76 seat aircraft, we retained many of the most important scope protections including change of control provisions that prevented the US Air takeover and gave us leverage in the DL/NW merger negotiations.
Everyone was deeply upset at the loss of the pension, it was a tremendous loss for the pilot group. The MEC faced the difficult choice of owning up to reality and trying to make the best plan B possible or fighting a battle that no one considered winnable to "save" the pension. There were no good choices here only a choice to try to minimize the damage and set the stage for future recovery. We have a long way to go, but we have less far to travel than many others. If I didn't say it before, I will say it again, everyone was very upset at the outcome of the pension. Most of the MEC members and administration were "dead-zoners" so they felt the pain as much as anyone else on the seniority list.