Some CAL pilots taking from The Man
05-23-2009, 01:49 PM
#1
Gets Weekends Off
Thread Starter
Joined APC: Aug 2008
Posts: 503
Some CAL pilots taking from The Man
In these tough times, why not try?
.................
Continental says pilots cashed in on sham divorces
by Associated Press Friday May 22, 2009, 2:10 PM
Updated at 5:16 p.m.
HOUSTON -- Continental Airlines Inc. is suing nine pilots that it says got sham divorces so their ex-spouses could collect their retirement benefits while they kept flying.
The airline said the pilots concealed the divorces from children and friends, then remarried their spouses after getting the money.
The company said it paid out between $10 million and $11 million in suspicious pension distributions, including sums paid to other pilots who weren't named in the lawsuit.
Eight of the pilots have been fired or quit, while one was rehired after he promised to pay back the retirement money, the airline said -- although he too was named as a defendant after failing to repay. The spouses were also named as defendants.
The airline and the committee that runs its pilots' retirement plan filed the lawsuit Wednesday in federal district court in Houston.
Continental asked the court to order the pilots to return the money and to declare that the company was not violating anti-discrimination laws in firing the pilots.
Continental charged that the pilots -- seven men and two women -- tried to take advantage of a loophole in a major federal pension law that in cases of divorce allows payment of benefits before the worker retires.
The pilots divorced and then usually assigned all their benefits to their ex-spouses, who then got state courts to issue orders transferring pension benefits in a lump sum to the ex-spouses, the airline charged.
"The divorces ... were subterfuges or sham transactions" because the couples had no intention of breaking up but divorced only to collect pension benefits without the pilots retiring, the airline said.
One of the pilots told The Associated Press there was nothing phony about his divorce and remarriage.
"We were divorced -- that's legal and aboveboard," said Jay Ellis of League City, Texas. "They can say what they want, but a judge signed ours."
Ellis said his wife, Carol, also a defendant, divorced him for other reasons and not to get his pension. Ellis, who was 62 when he was fired, said he is retired with no plans to go back to work.
The lawsuit suggested that the pilots acted because they were afraid of being hurt by turmoil in the airline industry.
Several airlines have terminated pension plans and turned them over to the federal Pension Benefit Guaranty Corp., and the Continental pilots might have feared the same thing could happen at the Houston-based carrier.
The average Continental pilot qualifies for up to $900,000 in a lump sum upon retirement, but the PBGC limits payments far below that level, and it makes annual payments rather than lump-sum distributions.
Continental said it began receiving "a significant number" of requests for lump-sum pension payouts to ex-spouses of working pilots beginning in late 2005, and by mid-2007 the airline learned that the couples usually remarried after getting the money.
Other pilots besides the nine named in the lawsuit apparently tried the same ploy, according to the lawsuit. In some cases, the company stopped payments before they were made.
Julie King, a Continental spokeswoman, declined to say how many other pilots were suspected of using divorce to collect benefits but said it was not a large number.
.................
Continental says pilots cashed in on sham divorces
by Associated Press Friday May 22, 2009, 2:10 PM
Updated at 5:16 p.m.
HOUSTON -- Continental Airlines Inc. is suing nine pilots that it says got sham divorces so their ex-spouses could collect their retirement benefits while they kept flying.
The airline said the pilots concealed the divorces from children and friends, then remarried their spouses after getting the money.
The company said it paid out between $10 million and $11 million in suspicious pension distributions, including sums paid to other pilots who weren't named in the lawsuit.
Eight of the pilots have been fired or quit, while one was rehired after he promised to pay back the retirement money, the airline said -- although he too was named as a defendant after failing to repay. The spouses were also named as defendants.
The airline and the committee that runs its pilots' retirement plan filed the lawsuit Wednesday in federal district court in Houston.
Continental asked the court to order the pilots to return the money and to declare that the company was not violating anti-discrimination laws in firing the pilots.
Continental charged that the pilots -- seven men and two women -- tried to take advantage of a loophole in a major federal pension law that in cases of divorce allows payment of benefits before the worker retires.
The pilots divorced and then usually assigned all their benefits to their ex-spouses, who then got state courts to issue orders transferring pension benefits in a lump sum to the ex-spouses, the airline charged.
"The divorces ... were subterfuges or sham transactions" because the couples had no intention of breaking up but divorced only to collect pension benefits without the pilots retiring, the airline said.
One of the pilots told The Associated Press there was nothing phony about his divorce and remarriage.
"We were divorced -- that's legal and aboveboard," said Jay Ellis of League City, Texas. "They can say what they want, but a judge signed ours."
Ellis said his wife, Carol, also a defendant, divorced him for other reasons and not to get his pension. Ellis, who was 62 when he was fired, said he is retired with no plans to go back to work.
The lawsuit suggested that the pilots acted because they were afraid of being hurt by turmoil in the airline industry.
Several airlines have terminated pension plans and turned them over to the federal Pension Benefit Guaranty Corp., and the Continental pilots might have feared the same thing could happen at the Houston-based carrier.
The average Continental pilot qualifies for up to $900,000 in a lump sum upon retirement, but the PBGC limits payments far below that level, and it makes annual payments rather than lump-sum distributions.
Continental said it began receiving "a significant number" of requests for lump-sum pension payouts to ex-spouses of working pilots beginning in late 2005, and by mid-2007 the airline learned that the couples usually remarried after getting the money.
Other pilots besides the nine named in the lawsuit apparently tried the same ploy, according to the lawsuit. In some cases, the company stopped payments before they were made.
Julie King, a Continental spokeswoman, declined to say how many other pilots were suspected of using divorce to collect benefits but said it was not a large number.
05-23-2009, 05:04 PM
#5
First Rule of Fight Club
Joined APC: Jan 2007
Position: My seat smells like cat pee
Posts: 1,536
Time to retire in Bhutan, I hear it is pretty there in the summer. With a per capita income of $1,300 US a year you would be quite well off.
Honestly these guys should testify before congress and let them know why they decided to do this. If it doesn't work out there is always Bhutan, or Cuba for the time being.
Honestly these guys should testify before congress and let them know why they decided to do this. If it doesn't work out there is always Bhutan, or Cuba for the time being.
05-23-2009, 05:57 PM
#7
Gets Weekends Off
Joined APC: Feb 2009
Position: 73 CA EWR
Posts: 514
Frozen A-plan
"The average Continental pilot qualifies for up to $900,000 in a lump sum upon retirement"
This is absolutely false. Any pilot hired after 2004 doesn't even have an A-plan. Pilots hired from '97 have about $40K if that much. Pilots hired from '87 have around $550,000.
On a side note, I'm hearing the company is trying to distance themselves from the article stating they don't know who put it to the press. Ask them a question - "no comment."
I'm not condoning anyone stealing from anyone. However, the company buffoons thought they could play the press in order to manage public perception. Unfortunately this will come back to bite then in the backside.
It's not okay to lie either CAL management. You should stick with trying to figure out fuel hedges - your fuel hedging blunders dwarf any pensions 8 or 9 guys got. Or why don't you give back the bonuses you took after you cried that we were going to have to file for bankruptcy if the contract wasn't signed. As far as I'm concerned that is theft as well as dishonesty. So CAL management, before you get all high and mighty try looking into a mirror -- LOSERS!
This is absolutely false. Any pilot hired after 2004 doesn't even have an A-plan. Pilots hired from '97 have about $40K if that much. Pilots hired from '87 have around $550,000.
On a side note, I'm hearing the company is trying to distance themselves from the article stating they don't know who put it to the press. Ask them a question - "no comment."
I'm not condoning anyone stealing from anyone. However, the company buffoons thought they could play the press in order to manage public perception. Unfortunately this will come back to bite then in the backside.
It's not okay to lie either CAL management. You should stick with trying to figure out fuel hedges - your fuel hedging blunders dwarf any pensions 8 or 9 guys got. Or why don't you give back the bonuses you took after you cried that we were going to have to file for bankruptcy if the contract wasn't signed. As far as I'm concerned that is theft as well as dishonesty. So CAL management, before you get all high and mighty try looking into a mirror -- LOSERS!
05-23-2009, 06:30 PM
#9
Gets Weekends Off
Joined APC: Feb 2008
Posts: 2,539
Originally Posted by Eric Stratton
This is total BS. The company threatens that the pension might disappear and some find a loop hole to make sure they get their money and now they are being take to court and fired.
Retirement means those seats should have been vacated. Lump sums deplete the pension trust. Retired pilots holding active seats and lump sums....
05-23-2009, 07:33 PM
#10
Gets Weekends Off
Joined APC: Nov 2005
Posts: 2,002
Originally Posted by slowplay
Yeah, if this is true it's total BS that 9 pilots stole money from their fellow pilots while maintaining their seniority numbers. I'm happy that a management team took this seriously.
Retirement means those seats should have been vacated. Lump sums deplete the pension trust. Retired pilots holding active seats and lump sums....
Retirement means those seats should have been vacated. Lump sums deplete the pension trust. Retired pilots holding active seats and lump sums....
These pilots weren't retired they just got divorces. You don't have to quit/retire when you get divorced.
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