Quote:
Originally Posted by JoePatroni
The PBGC is not a lump sum, nor is that even possible, it's a Ponzi scheme just like social security. As a matter of fact, changing the age to 65 puts more of a strain on the PBGC than keeping it at 60.
There is a possibility that one could get a lump sum out of the PBGC. It's called a risk Transfer. Basically, the employer attempts to shed all liability, and in so doing is required to pay out the lump sum. It's a "cleaner" way to do it, rather than getting a QDDRO. The CAL pilots frozen A fund did preserve a lump sum option. I think you'd be a fool to take the annuity.
Delaying the pay out from 60 to 65 bought the company and the PBGC time. There would have been more pressure to pay out the frozen A fund sooner, rather than later. This way you get more money in the fund for longer, thereby giving the actuaries more buoyancy to the fund, rather than acting as an anchor pulling it down. I think the magic number is 85% of the unfunded liabilities need to be on hand to preserve the lump sum option.
The PBGC didn't have anything to do with the backroom "fair treatment of experienced pilots act." What will they call the next act, the fair treatment of super senior and more experienced pilots act"??
It's not enough for ALPA to say they aren't supporting any future age increases. I would like ALPA to say they firmly oppose any such increase. I'd rather the signal be loud and clear. Current and recent info on the subject just isn't strong enough to get me to support the PAC.
As I recall, it was CAL management that really started this. They kept telling the union "liquidity shortfall" and leaking out the word "bankruptcy." When Contract '02 (really 2005) occurred, Panarello's group, worried that CAL may actually do something to hurt their "frozen A fund" started to look for ways to repatriate their frozen moneys. Surprisingly, a group of the phriends of phred in the instructor cadre got their "divorces" and mistakenly bragged about it to some ALPA R/I guys. It wasn't long after that that CAL fired them and then sued them. ALPA was firmly against the QDDRO pilots. But, the QDDRO guys (and a few gals), won. Also won reinstatement to the airline.
The real reason that pilots were desperate to get the money out of CAL's hands and also away from the PBGC was a guy named Jacques LaPointe. You may be asking yourself right now...."who is this?" This is the guy that managed the fuel hedging program and ran all of the retirement plans at Continental. He's the guy that single-handedly lost over 450 million dollars with no accountability, and he's the reason that CAL came to the pilots for concessions. The amount of money he really lost was really likely about 700 million when you add it all up.
Strange though: Over 45,000 employees at Continental, and only 4400 pilots. Why was the pilots fund the only one carved out of the CARP and turned into the CPRP? I think it has allot to do with unfunded liabilities. It's a great deal when the fund doesn't have to pay the heavy earners. it's not so great of a deal when the fund has to start paying off the big money earners.
Eventually the PBGC Ponzi scheme run ends. The chickens come home to roost eventually. Delaying it to 65 just delays the "frozen benefit." It gave the actuaries both at PBGC and at CPRP more time to get their house in order financially.