USAirways Pilots Contest Pension Termination
 

We have recovered 20,000 pages of documents from the PBGC and other sources regarding the events and circumstances of our pension termination in March 2003. We have uncovered many indiscretions that all point to collusion, inappropriate behavior and possible fraud against our pilots and the Defined Benefits Pension Plan. We are in the process of doing a full forensic accounting of the events that led up to our pension termination, and we will report the findings of this group early next month. If this investigation determines we indeed have legal cause, we will be filing a lawsuit on your behalf prior to the end of March. We want to make this clear to our pilots; this is an uphill battle and will take time, energy and future funding from our pilots to pursue. After the forensic evaluation is complete, decisions will be made and the appropriate action taken. To answer many of your questions, whether this investigation leads to criminal action against specified individuals will be determined by Federal Prosecutors. The initial complaint, if filed, will be against certain named defendants that records indicate not only intentionally financially decimated our pension prior to termination but outright stole those monies for their personal use. We are working with many involved parties, and as the webs of indiscretions are unwound, we continue to find more and more involvements that could lead to the eventual return of our pension monies. This will be a tough road, but rest assured what has been uncovered so far indicates that our pension was in fact fully funded to ERISA standards in the years 2001 and through December 2002. During the first 3 months of 2003, many improprieties occurred – the bottom line is that the give-back of our pension was never required by any creditors as a means of emerging from bankruptcy. Dave Siegel had arranged all DIP financing prior to entering bankruptcy, the largest being the ATSB loan that had no requirement of pension termination. The documentation we have makes it apparent that, due to the lack of due diligence (no audits or forensic accounting were completed on our pension monies) and improper oversight, our pension was in fact not only fraudulently misrepresented by US Airways but intentionally raided prior to being turned over to the PBGC. The Company ordered the bankruptcy auditors, KPMG, not to audit our pension, and the PBGC has no obligation to audit the funds once they are turned over. Our MEC at the time was sold on the fact that US Airways was not coming out of bankruptcy with our pensions. Quite simply, we believe that was the fraud.

Ooops ..... message deleted due to error on my part!

now 4 active lawsuits for one little union.

There may be 4 suits being pursued by USAPA but one is not. It is being handled by retired pilots who got hosed, who are NOT represented by ALPA or USAPA. I believe the blurb is extracted from the retired pilots newsletter.

Your jibe about the 'little union' in this case may be misplaced and reactionary.

(FWIW, I was told when ALPA was approached about the problem of problems in the termination of the pension, the retired pilots were quickly and succinctly told essentially that ALPA is not interested in the problems of retired pilots and does not represent them. Also, ALPA reps had told the line pilot it was a 'line in the sand' and no termination would take place without a vote by the line pilot. Right. Didn't happen. The pension was terminated with agreement by the MEC and by national. Nice.. :D)

Sounds like ALPA could be sued as well. Given the astonishing degree of corporate and executive fraud that has come to light in the past six months, I believe that it's entirely probable that there's fire under all the smoke.

Most of the ALPA unions have turned into company unions now.

True labor power would have had every professional pilot withold their services in protest of the retirement rape. US Airways was the first dominoe with the rest to follow- thousands lost thousands. We capitulated in the face of adversity.

Yes, lawsuits and prosecutions would have transpired but every battle has casualties unless you surrender without a fight. I guess standing tall is no longer an American trait.

I know this is "hardcore" in the new landscape of "weak sisters" but I come from an Eastern Airline family of principles.

Carpe Diem

It believe you are correct.

Pretty much the same thing with the UAL pension. A very important point is that every active pilot will be a retired pilot someday. How much is a retirement benefit really worth if a union, ALPA in this case, won’t fight for it?

Not be picky, but ALPA is PROHIBITED BY LAW from representing retired pilots in bankruptcy. That is why there is 1113 (for active employees) and 1114 (for retired employees). Don't know anything else about US Airways so I can't comment. Have heard this same complaint from Delta retirees, but they don't understand the law. Bankruptcy law recognizes that there can be different priorities between active and retired employees and prevents any cross representation in Chapter 11. Pension termination can only take place by court order. The MEC can choose to fight the termination or not, but they can't terminate a pension, only the judge can do that and only after the debtor makes their case. Delta retirees fought the Delta pension termination and it was terminated anyway. Sorry, but elections matter. Presidents get to appoint federal judges, including bankruptcy judges.

Ding, ding, ding. I think they have a winner on this one and they are doing what ALPA should have done a long time ago. I hope they win and show my union how it is supposed to be done. :rolleyes:

I do not think that is correct but we may be saying much the same.

The courtsm may terminate a pension but I know in the case of the USAirways' termination, the MEC signed off and AGREED on the termination. It never got to anyone fighting it and never went to a vote from the line pilot. That was but one of the incredible slaps at the line pilot from a very dysfunctional organization.

I would add that I can appreciate the position of some at AmWest who were happy with ALPA. From some events I know of.. and was involved in, I had a slightly less opinion of national.

Alfa - all you need to know about US Airways is it is and always has been the most F'ed -up airline going.

Hey, DFRs for everyone!

I actually hope the retired US Air pilots get somewhere with their suit. The termination of pensions has been an abomination on the whole labor movement. While I would have rather had a 2 for 1 match on my 401K versus a defined contribition plan, I think the erosion of any of our labor standards hurts us all.

Not true is what I was told. I asked that specific question to my retired UAL pilot friend who heads the group defending our pilot retirees. He told me emphatically that it is NOT against the law for unions (ALPA in this case) to negotiate for retirees. In fact, in UAL's case, the IAM did just that. He wasn't certain about the AFA's position.

ALPA has had a long standing policy on not negotiating for retirees, but it is not law, as told to me.

Absolutely incorrect. ALPA has, and continues to fight for the proper PBGC funding for ALL pilots

To little and to late.

I assume you meant "too"

I have never seen or heard of any moneys or representations from ALPA retired at USAirways. NONE.

If you have other information, please come forth with it.

Found this on another forum, seems as good an explanation as any:


If Segal knew about the ERISA funding level, and it can be proven he, or employees acting on his instructions, deliberately pulled money out of the fund before handing it over to the PBGC, he is PERSONALLY liable.

If Segal or others are found to have deliberately done so, it's a criminal charge in a time when major CEO's are under HUGE scrutiny for "improper behavior" of finances toward the rank-and-file employees. Not a good time to get hauled up on charges for major corporate leaders.

TORT law may specifically allow for the USAir employees to go back and sue the federal government for failure to accomplish due dilligence in determining the ERISA funding level for the USAir pension plan. They can't sue the judge personally (protected by Tort Law), but there might be wiggle room in general liability of process of the bankruptcy court. In other words, that $1.4 Billion *MIGHT* come from the U.S. government, IF the bankruptcy judge simply took the word of the executives in the hearings rather than having every financial transaction in and out of the pension fund over the past 2-3 years analyzed PRIOR to deciding it was insolvent and handing it over to the PBGC and it's the PROCESS written by the bankruptcy COURT that caused the funds to be missed.

It certainly wouldn't carry through the bankruptcy process into the AW/LCC purchase agreement. AW won't carry any liability moving forward for a debt discharged by the bankruptcy judge. The only hopes for the USAir pilots affected is that the U.S. government is found negligent through process and has to make the fund whole.

Clear evidence that I day-dreamed throughout my English classes. :) Thanks for the correction.

If that's not tilting at windmills, I don't know what is...

PG

I was told that you have to have separate representation in the 1113 and 1114. Even if that is not the case, how would you reconcile the practical differences. Let's face it, retirees have only one issue and that is saving the pension. Active pilots care about the pension but also work rules, pay, vacation, everything.

The other issue is the retirees are no longer paying any dues. How do you reconcile retirees demands for representation when they aren't paying the bills? I understand they paid dues in the past, but that money was already spent representing them. Can you imagine the multiple DFR lawsuits that would come out of ANY settlement that had to balance out these two diametrically opposed views of life?

What about control issues? The MEC which consists of active pilots chosen by active pilots have entire control of negotiations and litigation strategy. Would you have to place retired pilots on the MEC to represent their interests?

If any of these questions sound difficult to answer, then surely if it is not against the law, then it is against all common sense. The Delta retired pilots formed three different groups to try to represent their interests in Chapter 11. Two groups eventually agreed to not oppose the pension termination. A third group fought the termination in court and lost. ALPA would have made the same arguments that this group made.

The pension was about 50% funded and represented a huge liability to any bank that might consider giving exit financing to Delta. My opinion is that if Delta did not terminate the pension (my pension too) then we would still either be in bankruptcy or be chopped up by US Airways. Again, the retired pilots may not have cared which of those two outcomes occurred as long as their pension payments get coming in the mail. The active pilots, not so much.

If not against the law, an extremely bad idea.

The point I'm bringing up is whether it is against the law for a union to negotiate as you stated and not whether it's a good idea or not. That is a separate issue.

Didn't seem to bother the IAM, however.

The points made in your well composed posting are certainly strong ones. But consider the following, please.

In a way, ALPA did in fact negotiate on behalf of the retirees by agreeing to terminate the "A" plan and replace it. When the retiree lawyers spoke on behalf of their clients, more than once the judge stated to the effect "well, ALPA did this and ALPA did that", which hurt our cause according to those in the URPPBA group. The judge found an easy way to dismiss our positions that way.

So, in a way, the did negotiate for the retirees - downward.

Bottom line is that ALPA could not have cared less what happened to the retirees. :mad:

Having said all of this, ALPA and the retirees were not in a good position, to put it mildly.

Just so everyone understands. THe way the PBGC calculates benefits greatly favors already retired older employees. I know quite a few retired Delta pilots i their 60's. They were surprised at how much they are getting. Most saw only a modest decline in monthly payments. Some as little as a few hundred dollars. The pilots most hurt in a pension termination were what has been referred to as deadzoners. Pilots 45 to 55 with a lot of years of service and a large accrued benefit. Most in that area will never see more then about 25 cents on the dollar from the PBGC yet they don't have enough time to rebuild a pension.

fireman,

It's been said before, but I'll repeat. No one can negotiate away a pension. No one can agree to terminate a pension. ALPA can agree not to contest a termination; but that's a big difference than negotiating it away.

Please provide a single example of any union ever winning the fight to preserve a pension that management is set on letting terminate.

PG

Actually there is also the health insurance but that is another issue.

Bingo. And that explains ALPA's position in one sentence.

That is not only without precedent, it is sheer speculation. When USAir was considering the termination, a friend on the seniority list but out on a short term medical, visited the halls of Congress trying to drum up support to oppose the termination. More than once he was greeted with the response, "If this is so important where is your union reps?" They were no where to be seen.

That is NOT the case for the USAir retirees. The ALPA reps held seminars w/ ppts for the 1st, 2nd and 3rd 'tranches' and told everyone the older guys in the first 'tranche' would essentially be made 'whole'. Right if one considers losing about 55% being made whole which I know to be FACT. Delta's termination may have been and probably was structured differently. But suffice it to say, the boys/gals at USAir got hosed big time.