AMR pensions - PGBC Director Josh Gotbaum
12-29-2011, 04:17 AM
#1
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Posts: 118
AMR pensions - PGBC Director Josh Gotbaum
I don't think we'd be seeing this from the PGBC if Bradley Belt, the former PGBC director (George W. Bush appointee), were the head of PGBC
(ATTN Moderator - please leave this in the Major Airline forum)
PBGC Director Josh Gotbaum Responds to Comments Made by American Airlines' Counsel Harvey Miller
FOR IMMEDIATE RELEASE
December 16, 2011
WASHINGTON--Pension Benefit Guaranty Corporation Director Josh Gotbaum released the following statement today in response to comments made by American Airlines' Counsel Harvey Miller:
(ATTN Moderator - please leave this in the Major Airline forum)
PBGC Director Josh Gotbaum Responds to Comments Made by American Airlines' Counsel Harvey Miller
FOR IMMEDIATE RELEASE
December 16, 2011
WASHINGTON--Pension Benefit Guaranty Corporation Director Josh Gotbaum released the following statement today in response to comments made by American Airlines' Counsel Harvey Miller:
When American Airlines filed for bankruptcy they took great pains to say to their customers that nothing will change, that they will still have their frequent flyer miles and service will continue. But they didn't make the same promises to their employees about the future of their pensions. Recent comments by the company's bankruptcy counsel, Harvey Miller, suggest that American wants to back out of its retirement commitments. For that to happen, American will have to prove it can't successfully reorganize if the pensions continue.
Mr. Miller also said that traditional pensions no longer work because of unpredictable market conditions. That may come as a surprise to the 60 million Americans that have them. Traditional pensions remain the best option for a secure retirement for most people. Those who have moved into 401K-type plans are discovering that investing is hard, the results are far from guaranteed, and they may end up having to work longer than expected. A defined benefit is always there, you can't outlive it, and it gives people real retirement security.
PBGC has helped dozens of companies in bankruptcy keep their pensions, so their employees and retirees get the benefits they worked for.
For instance, Visteon, the former Ford Motor Co. auto-parts subsidiary, initially planned to terminate three of its pension plans in bankruptcy. We showed Visteon they could reorganize successfully without terminating their employees' plans. Today, the company's 23,000 workers and retirees continue to receive all the benefits they've earned.
Contrary to Mr. Miller's comments, airlines have reorganized successfully without damaging the retirement security of workers and retirees. In the most recent airline bankruptcies, Northwest Airlines emerged without terminating its plans. Delta terminated its pilots plan, but reorganized with its other plans intact.
PBGC is a pension safety net, not a convenient option for companies that want to sidestep their retirement commitments. We step in when we have to and pay all benefits the law allows. When the agency assumed airline plans in the past, many people's pensions were cut, in some cases dramatically. That's why PBGC always tries first to preserve plans. We will continue to encourage American to fix its financial problems and still keep its pension plans.
Mr. Miller also said that traditional pensions no longer work because of unpredictable market conditions. That may come as a surprise to the 60 million Americans that have them. Traditional pensions remain the best option for a secure retirement for most people. Those who have moved into 401K-type plans are discovering that investing is hard, the results are far from guaranteed, and they may end up having to work longer than expected. A defined benefit is always there, you can't outlive it, and it gives people real retirement security.
PBGC has helped dozens of companies in bankruptcy keep their pensions, so their employees and retirees get the benefits they worked for.
For instance, Visteon, the former Ford Motor Co. auto-parts subsidiary, initially planned to terminate three of its pension plans in bankruptcy. We showed Visteon they could reorganize successfully without terminating their employees' plans. Today, the company's 23,000 workers and retirees continue to receive all the benefits they've earned.
Contrary to Mr. Miller's comments, airlines have reorganized successfully without damaging the retirement security of workers and retirees. In the most recent airline bankruptcies, Northwest Airlines emerged without terminating its plans. Delta terminated its pilots plan, but reorganized with its other plans intact.
PBGC is a pension safety net, not a convenient option for companies that want to sidestep their retirement commitments. We step in when we have to and pay all benefits the law allows. When the agency assumed airline plans in the past, many people's pensions were cut, in some cases dramatically. That's why PBGC always tries first to preserve plans. We will continue to encourage American to fix its financial problems and still keep its pension plans.
12-29-2011, 06:36 AM
#2
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Posts: 537
Unfortunately the PBGC doesn't get to decide IF AMR keeps their pension plans. Secured creditor get first dibs, which unions and labor are not. The BK judge is the final arbiter and he'll most likely hand it off to the PBGC as in previous BK cases. See USAir and TWA BK in the early '00's. The PBGC disperses pensions based on a number of the things, but I believe about $48,000/yr is the maximum outlay. http://www.pbgc.gov/wr/benefits/guar...guarantee.html
Has nothing to do with politics.
Has nothing to do with politics.
12-29-2011, 06:45 AM
#3
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Posts: 745
Originally Posted by HalinTexas
Unfortunately the PBGC doesn't get to decide IF AMR keeps their pension plans. Secured creditor get first dibs, which unions and labor are not. The BK judge is the final arbiter and he'll most likely hand it off to the PBGC as in previous BK cases. See USAir and TWA BK in the early '00's. The PBGC disperses pensions based on a number of the things, but I believe about $48,000/yr is the maximum outlay. Maximum Monthly Guarantee Tables
Has nothing to do with politics.
Has nothing to do with politics.
12-29-2011, 07:16 AM
#4
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Posts: 8,350
Originally Posted by HalinTexas
Unfortunately the PBGC doesn't get to decide IF AMR keeps their pension plans. Secured creditor get first dibs, which unions and labor are not. The BK judge is the final arbiter and he'll most likely hand it off to the PBGC as in previous BK cases. See USAir and TWA BK in the early '00's. The PBGC disperses pensions based on a number of the things, but I believe about $48,000/yr is the maximum outlay. Maximum Monthly Guarantee Tables
Has nothing to do with politics.
Has nothing to do with politics.
Expect a noticable additional skim from your future paychecks to pay for another corporation washing themselves of their self-made financial dirt.........dirt which could have been avoided, if they so choose.
Think of it as a yearly Christams present from the 1%.............for the rest of your working life.
12-29-2011, 07:38 AM
#6
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Posts: 8,350
Originally Posted by finis72
... I hope AA keeps their pensions, you're much better off.
It will be taxpayers who foot that bill. Money that would have normally gone toward their own retirement (401(k)'s, etc.) will now be skimmed by Uncle Sam and given to fund the retirements of those subject to the PBGC annual lifetime payouts.
Many on the right squawk about so-called liberal ideas of the "transfer of wealth".........well, corporations are doing it better then anyone and from both ends of the candle (with full assistance from their lackeys in government) and have been for decades. If they're not burning one end of that candle by dodging most, if not all of their tax obligations with a dozen or more creative schemes and loopholes, thus buckling the economy, they're reducing their expenses of those they promised to (labor), by dumping them on the same source that must make up for the other end of the candle.........the "American taxpayer" (AKA sap, sucker, simpleton, chump, chowderhead, moron, idiot, dimwit, dingleberry, dunce, etc.).
The 1% swelled like bloated swine at the trough over the last decade and airline pilots have now joined the lower-middle class (regional F/O's are classified as poverty-stricken), with those except for major airline captains earning less then the average run-of-the-mill job like Best Buy manager, custodian, police officers/fireman, etc., most of whom make equal or more and many still with pensions. It didn't have to be that way, but the pilot unions are a joke and why not, as most pilots spend more time throwing rocks at each other then being the stewards of their profession.
AMR's BK will be the final nail as once the A319's are deployed domestically en masse at the likely pay rates and working conditions, the rest will have no choice but to follow. The aviation 1% will then basically have current regional scale at up to 125-seats domestic (which could be the majority of the domestic ops in 10 years, like RJ's are now) and mainline or regional, there is no longer a difference who flies them.
12/21/12 is not the end of the world, the Mayans were misinterpreted. It was really the official death of the airline pilot profession as anything worthy of an investment of an additional $50-100,000 above standard college costs. There IS some good news, though ! The next decade is sure to have gobs of shiny jets for pilots to fly for peanuts and throw rocks at each other over.
The 1% is pleased..........very pleased.
12-29-2011, 07:41 AM
#7
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Posts: 8,350
Originally Posted by iceman49
Thought the Pension Reform act made it much more difficult to terminate the pensions, as it should be.
Thus the poor working stiff will just have to choke up more of their paycheck and why not there too ?
It's been so easy milking them so far and that's not likely to change.
12-29-2011, 08:14 AM
#9
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Joined APC: Aug 2006
Posts: 660
Originally Posted by Molon Labe
Post #6 above is an excellent post Eaglefly.
So where do we go from here? Will anything ever be done to stop this trend?Politicians obviously don't give a rip. We obviously don't either so, who's left?
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