u s pension update inter alliance meeting april 7 2005 n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
U. S. Pension Update Inter-Alliance Meeting April 7, 2005 PowerPoint Presentation
Download Presentation
U. S. Pension Update Inter-Alliance Meeting April 7, 2005

Loading in 2 Seconds...

play fullscreen
1 / 12

U. S. Pension Update Inter-Alliance Meeting April 7, 2005 - PowerPoint PPT Presentation


  • 92 Views
  • Uploaded on

U. S. Pension Update Inter-Alliance Meeting April 7, 2005. Seth Rosen, Industrial Advisor. Pilot Pensions Update. Current Environment Retirement Plan Comparisons Airline Summaries Pension Legislation. The Current Environment. Attacks on Health Care Erosion of Benefits Cost Sharing

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

U. S. Pension Update Inter-Alliance Meeting April 7, 2005


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
    Presentation Transcript
    1. U. S. Pension UpdateInter-Alliance MeetingApril 7, 2005 Seth Rosen, Industrial Advisor

    2. Pilot Pensions Update • Current Environment • Retirement Plan Comparisons • Airline Summaries • Pension Legislation

    3. The Current Environment • Attacks on Health Care • Erosion of Benefits • Cost Sharing • Decline in Defined Benefits • Growth in Defined Contributions • Pension Plans Under Duress • Restructuring, Waivers, Terminations, etc. • Legislative Changes Required

    4. US-ALPA Response and Strategy • US-ALPA Pursuing Legislative Remedies • Bargaining After Educating Membership • Reviewing Plan Design Changes • Protesting Waiver Applications

    5. Update – Pension Plan Comparables

    6. Pension Update - AAA • USAirways Retirement Plan has now gone to its fourth iteration : • Modified pay first • Modified benefit formula (65% to 50% FAE) • Targeted DC Approach (avg 38% DC rate) • Now @ flat 10% DC Plan • Plus remains of DB Plan paid by PBGC

    7. Pension Update - DAL • Delta Pilot Defined Benefit Plan “soft frozen” ( FAE component can increase but not decrease) • Associated DC Plan frozen, no further 5% Company Contribution • Company Contribution to 401(k) Plan reduced from 3% to 2% • New DC Plan established, 9% of pay spread on a targeted basis, 0 – 19.2% is the range of contributions, new hire DC rate is 10%

    8. Pension Update - UAL • Pilots agree not to contest termination of the Defined Benefit Plan and replace it with additional 6% DC contribution (existing B Plan is now 9% of pay) • Company agrees to 90 day period to explore alternative solution to the A Plan termination (including legislative solutions) • PBGC filed for involuntary termination of Pilot Plan in December 2004 • Judge reverses Company attempt to stop paying non-qualified payments

    9. Pension Update - CAL • Agreement will hard freeze DB Plan and provide DC Plan contributions to a new DC Plan and Variable contributions based on profits to the 401(k) Plan • 7/05 -- 6.75% of pay, 7/06 -- 10% of pay, 6/07 --12.75% of pay • Based on Profit: 9/06 -- 0 to 6% of pay, 9/07 -- 0 to 2.75% of pay, 9/08-- 0 to 2% of pay

    10. Pension Update - Legislation • Permanent solution required • Legislative Outlook (current relief for 2004 and 2005 only). Passenger airlines only. • Depends on your perspective (funding relief vs tougher funding requirements) • ALPA/NWA/DAL legislative outlook • AMR aligned with US ALPA

    11. Pension Update – Legislation • US ALPA proposed legislation would provide funding relief for single employer plans maintained by commercial passenger airlines if plan were “frozen” (hard or soft) • Relief would come in the form of : • Use of higher interest rate used in valuing plan’s unfunded past service liability • Use of a longer amortization period to fund the plan’s unfunded past service accrued liability (up to 25 yrs)

    12. Pension Update – Legislative • PBGC liability limited to amount as if Plan was terminated as of the first day of plan year where relief is given • Any benefit increases would need to be funded immediately • Allows follow on DC Plans – not DB Plans