Airline pilots are still ranting about pensions, seeing the company’s growing profits as an opportunity to recoup some of the benefits of a wave of bankruptcies.
The union of American airlines and delta air lines are studying how to rebuild or replace retirement plans that have been abandoned or frozen in the past financial struggles of operators.
These efforts suggest that the pilot is ready to play a strong role in the next round of labor negotiations, which begin in the United States early next year. Over the past five years, the three major U.S. carriers have reported adjusted profits of about $47 billion. But with other costs (such as fuel) rising, reviving old retirement plans would be a huge new expense for the company.
“The company is full of money,” said Dan Carey, President of the allied pilots association, which represents American airlines pilots association. At the same time, “our middle-aged pilots have a large population, and we are approaching retirement age and underage security. This is a direct question. ”
Discussions are at an early stage, and any change will require the support of union members and companies. Most airlines now have clear retirement plans, such as 401 (k). For companies, these companies are less risky, rather than the margin of defined-benefit pension plans, but they may be underfunded if they fail to meet their obligations.
Delta pilots have met with federal express counterparts, and union leaders are evaluating possible remedies to compensate for the lack of retirement benefits for senior airline pilots. Americans are looking for their own meetings. A recent memo from the delta Atlanta chapter talks about a plan to “define benefits”.
Retirement benefits are especially important for pilots because the law requires them to retire at 65.
“We didn’t choose to say that I’m not financially ready now, and I will continue to work until I get there,” said chuck dale, President of the federal express association, an airline.
The federal express pilot union is part of the exploration of variable pensions, which allow employers to improve or lower returns based on their investment performance. Companies share the risk of variable plans with employees, which provides greater flexibility for the downturn.
The variable scheme
Dell said fedex had never filed for bankruptcy, but its current fixed welfare program limits benefits far below the pilot’s final income level. Unions are exploring whether they should try to replace them with a variable plan while retaining existing retirement savings plans to help balance the risks.
Pension plans have been frozen during the airline’s bankruptcy and have shaken the industry over the past 15 years, a major obstacle to change. When a plan is frozen, it usually approaches the new participant, and the benefits don’t grow. Some of these plans are overseen by pension benefit guarantee companies, a quasi-government agency that provides insurance for America’s defined-benefit pensions.
Since the United States is a merger of several companies, some pilots’ pensions have been terminated or frozen, while others have never had a plan.
The company now has a 401 (k) plan, and union chief carrey hopes to find a way to recover the retirement income pilot that was lost in the U.S. bankruptcy filing in 2011. In addition to seeking a frozen pension fund, the world’s biggest operators are now driving profits.