Why I am voting Yes
09-25-2015, 05:09 PM
#71
Gets Weekends Off
Joined APC: Aug 2006
Posts: 1,813
If we can't make any changes to the A plan, and this TA gets voted in, then we are doing a disservice to the new hires. A new hire now with the same A plan in 25yrs is going to have what, a half or third of the purchasing power of the A plan value today? I don't think any new hire is going to be upset if they get a better B plan with potentially more value than a deflated A plan. This isn't separating the crew force when there is a reasonable explanation why there would be a different retirement option for new hires. This is not like B scale pay rates were there was a definite penalty for being junior.
Show me the math. The way I figure it, a new hire continues to fall behind in contributions until they make 195k with an 18% DC plan. A pilot hired today won't make that until at least year 6 and that is if they are a wide body FO under the TA pay rates.
09-25-2015, 05:29 PM
#72
Gets Weekends Off
Joined APC: Aug 2005
Position: Retired
Posts: 980
Gents, the talk of trying to put new hires on a different pension plan is foolish. That was the flavor of the year idea of the 80s. Not a positive for anyone. Why would you expect the company agree to the B scale for new hires when they know that the MEC and the pilots will gladly accept a B Scale for every pilot on the property. FedEx looked great after 2001 not because thing were great, but you had to compare it to all the bankrupt passenger airlines. Now the passenger airlines are recovering you will see pay and benefits there that will far exceed FedEx. Remember even at the best of times FedEx was always been 30% behind the people carriers during their normal days.
I recall one pilot a flew with in 1974 during one of my furloughs from Seaboard. Gus had been a Navy pilot during the mid 30s. He was hired by EAL in 1939. World War 2 broke our a few years later but even though he was in the Navy Reserves he had a critical occupation plus he was getting too old as a Navy pilot, probably almost age 28. In any case he continued to fly for Eastern. He retired from EAL in 1973 as a DC-8 Captain, but receiving B747 pay. He had served as the MEC Chairman for ten years plus he was the ALPA First Vice President. His EAL pension was $36,000 a year. Sounds like sort of a low number, correct? Well, adjusted for inflation equals $193,229 today.
Check out this book on the iBooks Store: https://itun.es/us/nuBWw.l
I recall one pilot a flew with in 1974 during one of my furloughs from Seaboard. Gus had been a Navy pilot during the mid 30s. He was hired by EAL in 1939. World War 2 broke our a few years later but even though he was in the Navy Reserves he had a critical occupation plus he was getting too old as a Navy pilot, probably almost age 28. In any case he continued to fly for Eastern. He retired from EAL in 1973 as a DC-8 Captain, but receiving B747 pay. He had served as the MEC Chairman for ten years plus he was the ALPA First Vice President. His EAL pension was $36,000 a year. Sounds like sort of a low number, correct? Well, adjusted for inflation equals $193,229 today.
Siphon: HOW COMPANIES PLUNDER
THE PENSION PIGGY BANKS
IN NOVEMBER 1999, a group of the nation’s leading pension experts met at the Labor Department in Washington to discuss a $250 billion problem. After eight years of double-digit returns, the pension plans at American corporations had more than a quarter of a trillion dollars in excess assets. Not a shortage of assets—excess assets. At some companies, the surpluses had reached almost laughable levels: $25 billion at GE, $24 billion at Verizon, $20 billion at AT&T, $7 billion at IBM.
One might expect that such lush asset balances would be something to celebrate.
Pension assets had been building for years, the result of downsizings, a robust stock market, laws enacted in 1974 that required employers to adequately fund pensions, and a 1990 law that made it harder for them to raid the surplus by terminating their pensions.
Thanks to this, many employers hadn’t contributed a cent to their plans since the 1980s, yet they still had enough money to cover the pensions of all current and future retirees even if they lived to be one hundred. With so much money, the plans would cost the companies nothing for years to come.
But employers weren’t celebrating. The money was burning a hole in their pockets. In theory, surplus pension assets are supposed to remain in the pension plans, to provide cushion for the inevitable times when investment returns are weak and interest rates fall. But employers felt that requiring companies to use pension money only to pay pensions made no sense.
“Rigid and irrational legal restrictions trap these surplus assets in the pension plans and prevent them from being used productively,” maintained Mark Ugoretz, the head of ERIC, a group that lobbies for employers on benefits matters.
Complaining that the pension assets were “locked up,” employers had asked the ERISA Advisory Council to study the issue. Employers had good reason to believe that the council would recommend changes they wanted. The council consists of fifteen members, appointed by the secretary of labor, to advise the department on benefits matters.
The revolving cast includes representatives from think tanks, academia, unions, and pension administrators. But the council has often been dominated by corporate representatives, who influence the choice of topics and suggest which expert witnesses should testify. Nine of the fifteen appointed members of the council at the time were representatives of employers and financial firms, and many of the experts they invited to testify not surprisingly shared employers’ views.
At the 1999 hearings, executives from DuPont, Northrop Grumman, and Marathon Oil strongly advocated allowing employers to withdraw pension money to pay for their retiree health benefits. This would not only be good for retirees, they said, but good for retirement security overall.
John Vine, a lawyer from Covington & Burling, a Washington law firm that had advised clients on myriad methods to monetize their pension surplus, discussed ways employers could extract the assets in mergers or use them to pay severance costs or even to “provide enhanced pension benefits to a subclass of the plan’s current participants” (e.g., the employer’s executives).
Excerpt From: Ellen E. Schultz. “Retirement Heist.” Portfolio/Penguin, 2011-09-15. iBooks.
This material may be protected by copyright.
THE PENSION PIGGY BANKS
IN NOVEMBER 1999, a group of the nation’s leading pension experts met at the Labor Department in Washington to discuss a $250 billion problem. After eight years of double-digit returns, the pension plans at American corporations had more than a quarter of a trillion dollars in excess assets. Not a shortage of assets—excess assets. At some companies, the surpluses had reached almost laughable levels: $25 billion at GE, $24 billion at Verizon, $20 billion at AT&T, $7 billion at IBM.
One might expect that such lush asset balances would be something to celebrate.
Pension assets had been building for years, the result of downsizings, a robust stock market, laws enacted in 1974 that required employers to adequately fund pensions, and a 1990 law that made it harder for them to raid the surplus by terminating their pensions.
Thanks to this, many employers hadn’t contributed a cent to their plans since the 1980s, yet they still had enough money to cover the pensions of all current and future retirees even if they lived to be one hundred. With so much money, the plans would cost the companies nothing for years to come.
But employers weren’t celebrating. The money was burning a hole in their pockets. In theory, surplus pension assets are supposed to remain in the pension plans, to provide cushion for the inevitable times when investment returns are weak and interest rates fall. But employers felt that requiring companies to use pension money only to pay pensions made no sense.
“Rigid and irrational legal restrictions trap these surplus assets in the pension plans and prevent them from being used productively,” maintained Mark Ugoretz, the head of ERIC, a group that lobbies for employers on benefits matters.
Complaining that the pension assets were “locked up,” employers had asked the ERISA Advisory Council to study the issue. Employers had good reason to believe that the council would recommend changes they wanted. The council consists of fifteen members, appointed by the secretary of labor, to advise the department on benefits matters.
The revolving cast includes representatives from think tanks, academia, unions, and pension administrators. But the council has often been dominated by corporate representatives, who influence the choice of topics and suggest which expert witnesses should testify. Nine of the fifteen appointed members of the council at the time were representatives of employers and financial firms, and many of the experts they invited to testify not surprisingly shared employers’ views.
At the 1999 hearings, executives from DuPont, Northrop Grumman, and Marathon Oil strongly advocated allowing employers to withdraw pension money to pay for their retiree health benefits. This would not only be good for retirees, they said, but good for retirement security overall.
John Vine, a lawyer from Covington & Burling, a Washington law firm that had advised clients on myriad methods to monetize their pension surplus, discussed ways employers could extract the assets in mergers or use them to pay severance costs or even to “provide enhanced pension benefits to a subclass of the plan’s current participants” (e.g., the employer’s executives).
Excerpt From: Ellen E. Schultz. “Retirement Heist.” Portfolio/Penguin, 2011-09-15. iBooks.
This material may be protected by copyright.
09-25-2015, 05:38 PM
#73
Gets Weekends Off
Joined APC: Aug 2006
Posts: 1,433
MEC Chairman msg today:
On Monday, the voting will open for the Tentative Agreement. Over the last couple of weeks, we have presented briefings at all our pilot bases; additionally, we have held web and telephone call-in events to answer questions. The TA QA website has accumulated hundreds of questions, and the Negotiating Committee has managed to answer about 70 percent of those questions so far. The effort has been tremendous and is ongoing. At this point, I am hopeful that most of you have found answers to your questions. For those that have further queries, we will continue to conduct telephone call-in events and crew room visits.
Judging by the questions and concerns voiced at the various TA presentations and through other interactions, it is clear that the most controversial aspect of the agreement is the retirement section. That is not a surprise to me, as that was the most contentious of the issues that your elected representatives have struggled with over the last couple of years. Some have suggested that we can reengage on this issue separately in the aftermath of a successful TA vote. That may or may not be the case. Were we to develop a retirement position that provides value to the company as well as creates a better outcome for us, then such post-TA bargaining might be possible. There are potential retirement solutions that could accomplish this, but so far they have been elusive, as the MEC did not want to engage in a public retirement debate during late-stage bargaining. To be clear, without creating value for the company as well as improving our position, I can see little likelihood to engage in such bargaining once the TA is accepted.
Some have asked that I lay out a plan for a failed TA. Please recall that your elected representatives voted 10-4 in favor of the TA. By laying out a path for a failed TA, I would be inherently suggesting such a failure is expected. That would be counter to the desires of those that want the agreement to be accepted. Conversely, by not laying out that same path I am disappointing those that want the TA rejected. My purpose is not to subvert any of you, and to allow the voting process to determine the path. In either event, we will indeed have an actionable plan.
There are no shortcuts to a new deal in the works. No doubt, management is making plans for either passage or failure, anything less on their part would be imprudent. They have always negotiated very hard, and I would expect the same going forward in any case.
The NMB has made clear to your leadership that our options under the RLA will be severely restricted due to our importance to the economy. This may not be a convenient fact, but it is the case none the less. A return to mediated bargaining is our only viable alternative should the TA fail. As in the past, we can support that bargaining with informational picketing and unity events as well as other informational actions.
One thing has become very clear to me. Unity matters a great deal. In two cases, we demonstrated unity around specific issues. We stood together in opposition to PBS, and we stood together in opposition to a new-hire retirement carve-out. In both cases, we prevailed. Sadly, on our overall retirement position we were unable to formulate a unifying position. If we are to achieve a better outcome in the future we will need to find solutions that create unity vice division.
One popular definition of insanity is repeating the same action and expecting a different outcome. Prior to any future bargaining, either in the near term or at the amendable date of this TA, we must develop a sustainable and practical plan that we can all agree on. I am confident such an approach can be developed.
Whatever path you decide, please do your best to make the choice rational vice emotional. Have no illusions about the challenges ahead. As always, thank you for your professionalism and your understanding!
Regards,
On Monday, the voting will open for the Tentative Agreement. Over the last couple of weeks, we have presented briefings at all our pilot bases; additionally, we have held web and telephone call-in events to answer questions. The TA QA website has accumulated hundreds of questions, and the Negotiating Committee has managed to answer about 70 percent of those questions so far. The effort has been tremendous and is ongoing. At this point, I am hopeful that most of you have found answers to your questions. For those that have further queries, we will continue to conduct telephone call-in events and crew room visits.
Judging by the questions and concerns voiced at the various TA presentations and through other interactions, it is clear that the most controversial aspect of the agreement is the retirement section. That is not a surprise to me, as that was the most contentious of the issues that your elected representatives have struggled with over the last couple of years. Some have suggested that we can reengage on this issue separately in the aftermath of a successful TA vote. That may or may not be the case. Were we to develop a retirement position that provides value to the company as well as creates a better outcome for us, then such post-TA bargaining might be possible. There are potential retirement solutions that could accomplish this, but so far they have been elusive, as the MEC did not want to engage in a public retirement debate during late-stage bargaining. To be clear, without creating value for the company as well as improving our position, I can see little likelihood to engage in such bargaining once the TA is accepted.
Some have asked that I lay out a plan for a failed TA. Please recall that your elected representatives voted 10-4 in favor of the TA. By laying out a path for a failed TA, I would be inherently suggesting such a failure is expected. That would be counter to the desires of those that want the agreement to be accepted. Conversely, by not laying out that same path I am disappointing those that want the TA rejected. My purpose is not to subvert any of you, and to allow the voting process to determine the path. In either event, we will indeed have an actionable plan.
There are no shortcuts to a new deal in the works. No doubt, management is making plans for either passage or failure, anything less on their part would be imprudent. They have always negotiated very hard, and I would expect the same going forward in any case.
The NMB has made clear to your leadership that our options under the RLA will be severely restricted due to our importance to the economy. This may not be a convenient fact, but it is the case none the less. A return to mediated bargaining is our only viable alternative should the TA fail. As in the past, we can support that bargaining with informational picketing and unity events as well as other informational actions.
One thing has become very clear to me. Unity matters a great deal. In two cases, we demonstrated unity around specific issues. We stood together in opposition to PBS, and we stood together in opposition to a new-hire retirement carve-out. In both cases, we prevailed. Sadly, on our overall retirement position we were unable to formulate a unifying position. If we are to achieve a better outcome in the future we will need to find solutions that create unity vice division.
One popular definition of insanity is repeating the same action and expecting a different outcome. Prior to any future bargaining, either in the near term or at the amendable date of this TA, we must develop a sustainable and practical plan that we can all agree on. I am confident such an approach can be developed.
Whatever path you decide, please do your best to make the choice rational vice emotional. Have no illusions about the challenges ahead. As always, thank you for your professionalism and your understanding!
Regards,
09-25-2015, 06:05 PM
#74
Gets Weekends Off
Joined APC: Jan 2007
Posts: 1,199
Gents, the talk of trying to put new hires on a different pension plan is foolish. That was the flavor of the year idea of the 80s. Not a positive for anyone. Why would you expect the company agree to the B scale for new hires when they know that the MEC and the pilots will gladly accept a B Scale for every pilot on the property. FedEx looked great after 2001 not because thing were great, but you had to compare it to all the bankrupt passenger airlines. Now the passenger airlines are recovering you will see pay and benefits there that will far exceed FedEx. Remember even at the best of times FedEx was always been 30% behind the people carriers during their normal days.
I recall one pilot a flew with in 1974 during one of my furloughs from Seaboard. Gus had been a Navy pilot during the mid 30s. He was hired by EAL in 1939. World War 2 broke our a few years later but even though he was in the Navy Reserves he had a critical occupation plus he was getting too old as a Navy pilot, probably almost age 28. In any case he continued to fly for Eastern. He retired from EAL in 1973 as a DC-8 Captain, but receiving B747 pay. He had served as the MEC Chairman for ten years plus he was the ALPA First Vice President. His EAL pension was $36,000 a year. Sounds like sort of a low number, correct? Well, adjusted for inflation equals $193,229 today.
Check out this book on the iBooks Store: https://itun.es/us/nuBWw.l
I recall one pilot a flew with in 1974 during one of my furloughs from Seaboard. Gus had been a Navy pilot during the mid 30s. He was hired by EAL in 1939. World War 2 broke our a few years later but even though he was in the Navy Reserves he had a critical occupation plus he was getting too old as a Navy pilot, probably almost age 28. In any case he continued to fly for Eastern. He retired from EAL in 1973 as a DC-8 Captain, but receiving B747 pay. He had served as the MEC Chairman for ten years plus he was the ALPA First Vice President. His EAL pension was $36,000 a year. Sounds like sort of a low number, correct? Well, adjusted for inflation equals $193,229 today.
Check out this book on the iBooks Store: https://itun.es/us/nuBWw.l
I'm no financial expert. Far from it. But I'd rather pay a few good folks to help me manage my assets than bet my future on a "guaranteed" pension that never is.
09-25-2015, 06:19 PM
#76
Gets Weekends Off
Joined APC: Aug 2012
Posts: 711
09-25-2015, 06:54 PM
#77
Gets Weekends Off
Joined APC: Dec 2006
Posts: 2,091
If the TA passes, I believe are selling our QOL for COLA and a 2% B-plan increase, nothing else. All other gains are outweighed by the 'company gained efficiencies'.
I can only hope that the majority is ready to go back to the table with the company, after all, management has not given up a single penny to not only keep, but improve their pensions, health care, and entire pay package. If they don't need to sacrifice, and keep increasing their bonuses, why should we sacrifice?
09-25-2015, 07:48 PM
#78
Organizational Learning
Joined APC: Nov 2005
Position: Directly behind the combiner
Posts: 4,948
Also, as an outsider, it is disappointing to see some FedEx pilots advocating for what essentially would be a B-scale retirement plan for newhires in order to bolster the benefit of pilots already on property. FedEx might be the only ALPA carrier accepting newhires into an defined benefit plan but FedEx also didn't take the same trip through bankruptcy that others did, and has both shown and forecast continual growth in both revenue and income.
.
09-25-2015, 08:53 PM
#79
Banned
Joined APC: Mar 2009
Position: 757 Capt
Posts: 798
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