Regularguy

I was there in 85 when the UAL management, under Dick Ferris, decided to attempt to refund themselves the overfunding in the "A" DB Plan. I can't remember the exact amount, but at the time the overfunding was in the near $1 bill range (do not quote me on this amount).

Note: I just did a quick review of the IRS regs and it seems these days the only way a corp can get back its overfunding in an approved DBP is to terminate the plan and pay out all obligations per the plan. See this discussion: http://www.automatedpensions.com/edu...0educator:4980

Since then the laws probably have changed, but ALPA under the direction of MEC Chairman Hall took UAL to court and stopped their raid on our funds.

Found a link to the 1985 raid:
http://articles.latimes.com/1985-06-...1_pension-fund

Of course UAL then decided to minimize then funding into the future to reduce the over funding amount. These days to waive funding requires an application to the IRS explaining the reasons why.

https://www.irs.gov/pub/irs-drop/rp-04-15.pdf

Bottom line is defined benefit plans are under the care of another party and only represent a promise to pay those covered by the plan. Defined Contribution plans are basically owned by those receiving the payment.

Sadly the laws protecting the average person from the greed of others keep having to be updated as life moves on.

oldmako

Sadly the laws protecting the average person from the greed of others have been eviscerated by a certain political party.

Fixed it for you.

JoePatroni

Fixed it for you.

BMEP100

This is how Lorenzo’s Texas Air was able to pay for Continental- with Continental’s overfunded pensions. It was common practice for airlines to park profits in pension plans to avoid taxes. Remember the saying, “when an airline shows profit, they’ve run out of places to hide money”. Up until that time, and even some since, thousands of Air Line Pilots have enjoyed very comfortable retirements with a DB plan. So have airline executives.

Having one or another political party in power does not necessarily protect a pension. The CAL employees pension was underfunded and labelled “at risk” as recently as 2014. Then magically, the next year was 101% funded with no additional payments from United.

My point has been in all this that because of IRS rules there is no other way to try to make whole pilots who lost promised pensions with DC plans- only with DB plans,,,, at least for a few years when we all have retired.

This is being hotly debated at Delta right now I believe.

As far as DB being only a promise controlled by someone else- so are social security, commercial annuities , government pensions.

Regularguy

Yep, agreed and that’s why the defined contribution/401k is tops; that is assuming our economic system holds.

Nothing in life except death and taxes...

Make your best choices until then.

Regularguy

Explain to us which one that is or maybe it’s both?

guppie

Poor ol' American Airlines had to freeze their pensions versus termination. They were a little late to the bk party.

JoePatroni

It didn’t help their cause when people found out they had secretly given Don Carty and his minions secret, bankruptcy-proof, retirement plans. They tried to slide it by with an annual report “attachment.”

Zenofzin

I’m always amazed when guys can be smart enough to obtain a job like this, but then become such dumb sheep when it comes to politics. Amazing....

BMEP100

Maybe they were just given extra interview points for their gender identity, values signals, ethnic affiliation, certain job fair attendance