Delta TA yes
09-26-2014, 05:45 AM
#191
On Reserve
Joined APC: Feb 2012
Posts: 13
As a retired Delta Pilot allow me to set the record straight. Prior to the bankruptcy it was known that in the event of bankruptcy the option to receive 50% of the earned retirement as a lump sum would be lost. in the 12 months leading up to the bankruptcy 1500 Delta pilots elected to retire early in order to secure at least the lump sum. The CEO of Delta testified in bankruptcy court that if the Delta Pilot Retirement Plan would be allowed to be terminated and turned over to the PBGC, retired pilots would receive 90% of their earned benefit.
Nobody received a lump sum payout of $4M. In fact nobody received a lump payout larger than about $1.5M with most receiving around $1M. In my case I received a payment of about $1.3 (50% of my calculated total benefit) and was told that the remaining benefit would result in a monthly payment of about $8300. My reality is I receive $300 per month. Many of my peers receive less than $100 and some receive nothing.
I don't know how that compares to other airlines, but if things at Delta were a lot less bad it must have really been bad elsewhere. The irony of the whole mess was after the merger with Northwest, the only employee group to take a major hit was the original Delta pilots. The original Northwest pilots had their plan frozen and other employee groups had their plans frozen, but only the original Delta pilots had their plan terminated and turned over to the PBGC. The travesty perpetrated on the Delta pilots resulted in personal bankruptcies, divorces, most having to return to the work force with many working off shore (I went to Air india) and several suicides.
Nobody received a lump sum payout of $4M. In fact nobody received a lump payout larger than about $1.5M with most receiving around $1M. In my case I received a payment of about $1.3 (50% of my calculated total benefit) and was told that the remaining benefit would result in a monthly payment of about $8300. My reality is I receive $300 per month. Many of my peers receive less than $100 and some receive nothing.
I don't know how that compares to other airlines, but if things at Delta were a lot less bad it must have really been bad elsewhere. The irony of the whole mess was after the merger with Northwest, the only employee group to take a major hit was the original Delta pilots. The original Northwest pilots had their plan frozen and other employee groups had their plans frozen, but only the original Delta pilots had their plan terminated and turned over to the PBGC. The travesty perpetrated on the Delta pilots resulted in personal bankruptcies, divorces, most having to return to the work force with many working off shore (I went to Air india) and several suicides.
09-26-2014, 06:17 AM
#192
Runs with scissors
Joined APC: Dec 2009
Position: Going to hell in a bucket, but enjoying the ride .
Posts: 7,756
I'm one of the Delta guys who stayed behind, only because I was too young to leave. You had to be at least 50 to retire early with your 50% lump sum. I was 47. If I had been over 50, I most likely would have left and gone to Emirates or somewhere else.
Bear in mind, the guys who did leave early also took huge hits to their 50% lump sums as well, because to get the full amount you had to be age 60 AND have 25 years of service. Almost everyone who was over about age 55 at the time also had 25 years of service of course, but if you were not age 60, you took a 3% hit per year, for every year below 60 (they actually broke it down to months).
There were 6 guys from my Sept. 1985 new hire class who were old enough and did leave early, their 50% lump sum, adjusted downward for less than 25 years of service (-4% x years below 25) and less than age 60 (-3% x years below age 60), was about $700,000.
If $700,000 was their adjusted 50%, then obviously the total value of their DB plan at the time (again, adjusted downward by 7% x years) was $1.4 Million, ten years ago.
The company dumped all that extra payout onto the PBGC. The PBGC has rules that say in effect, if you got above a certain amount in your 50% lump, you'd get squat from them, which is why the guys who left early with bigger lumps, are getting squat from the PBGC now.
So many guys bailed early to get at least 50% of their earned benefits, that it caused our DB plan to become seriously underfunded, which is how it met the termination terms of the PBGC.
Most guys at the time who left figured it was better to get 50% of their retirement, vs. none at all, if they stayed and the DB plan was terminated.
If you were say, age 58-59, you'd be nuts to stay. You'd never have time to recover that $1.5 million. But if you were say, right at 50, with 10 years to go (then later it became 15 years, with age 65) you probably made out better by staying.
There was one guy who did very well by staying, he was about number 3 at the time and age 57. When numbers 1+2 left early, he stayed, losing over $1.5 Million (50%) of his DB money.
So he became seniority number 1 for the next 3 years, then 3 months before he turned 60, the retirement age was raised to 65, so he continued to be our Number 1 for five more years. He spent his last 8 years as the Number 1 pilot at Delta.
I flew with him several times, he's a great guy, thank god!
It really would have sucked to have some jackass at number 1 for 8 years!
(I met the previous number 1, and he was a true jackass!)
Last edited by Timbo; 09-26-2014 at 06:49 AM.
09-26-2014, 07:55 AM
#193
Gets Weekends Off
Joined APC: Jan 2007
Position: 30 West
Posts: 425
At the time I had issues in my personal life (sick wife) that pushed me out. I was concerned that I might have to quit after the bankruptcy to take care of her, the lump would be gone and who knew how much or what else. As it turned out she recovered and so did Delta. If I had stayed I would have enjoyed my job for another 9 years, probably earned at least an additional $2m (probably more and given half away in taxes) and retired number 1 after Cal retired.
I don't know how much the current guys are getting, but I get a sense they are doing OK. I would have a smaller IRA account if I had stayed, but the monthly annuity would have been sizable. As things turned out in the past 9 years I have had experiences in my life that I wouldn't have had if I had stayed and those experiences have been very satisfying.
09-26-2014, 10:13 AM
#194
Gets Weekends Off
Joined APC: Feb 2006
Position: 767A (Ret)
Posts: 6,248
That's how I look at it too -- we had to make our decision based on what was known at the time. Most of us are happy about what we did, but not about why we had to do it.
09-26-2014, 02:52 PM
#195
On Reserve
Joined APC: Feb 2012
Posts: 13
Thread
Thread Starter
Forum
Replies
Last Post
