Airline pilots, still haranguing over pensions, see the company’s growing profits as an opportunity to recoup some of the benefits of the wave of bankruptcies.
The alliance between American airlines and delta airlines is studying how to rebuild or replace retirement plans that have been abandoned or frozen in the financial difficulties of past operators.
The efforts show that the pilot is ready to play an important role in the next round of labor negotiations, which will begin in the us early next year. Over the past five years, the three major U.S. carriers have reported adjusted profits of about $47 billion. But as other costs, such as fuel, increase, reviving old retirement plans will be a big new expense for companies.
“The company is full of money,” said Dan Carey, President of the allied pilots association, which represents the American airline pilots association. At the same time, “we have a large middle-aged pilot population and we are approaching retirement age and the safety of minors. This is a direct question. ”
The discussion is in its early stages and any changes will require the support of union members and companies. Most airlines now have defined retirement plans, such as 401 (k) s. For companies, these are less risky than the margin on defined-benefit pension plans, but they may not have enough money if they don’t meet their obligations.
Delta pilots met with fedex employees, and union leaders are evaluating possible remedies to make up for the lack of retirement benefits for senior airline pilots. Americans are looking for their own meetings. A recent memo from the Atlanta delta talked about plans to “define benefits.”
“We have no choice now to say that I am not financially ready, and I will continue to work until I get there,” said chuck dale, President of the federal express association.
The fedex pilot union is part of an exploration into variable pensions, allowing employers to improve or reduce returns based on their investment performance. Companies share the risk of variable plans with employees, providing greater flexibility in a recession.
Dell said fedex has never filed for bankruptcy, but its current defined-benefit plan limits benefits far below the pilot’s final income. Unions are exploring whether they should try to replace them with variable plans, while retaining existing retirement savings plans to help balance the risks.
Pension plans were frozen during the airline bankruptcy and have shaken up the industry over the past 15 years, a major obstacle to change. When a plan is frozen, it is usually close to new participants and the benefits do not increase. Some of these plans are overseen by the pension benefit guarantee corporation, a quasi-government agency that provides insurance for American defined-benefit pensions.
A new start
The company now has a 401 (k) plan, and union President kerry wants to find a way to recoup the retirement income lost in the 2011 U.S. bankruptcy filing. In addition to seeking to freeze pension funds, the world’s largest operator is boosting profits.