Fri, Mar 11, 2005
Hear That Sound?
That's the sound of
thousands of United Airlines workers grinding their teeth as the
Pension Benefit Guaranty Corporation is assuming their pension
plan. More than 36,000 active and retired United Airlines ground
employees will be affected by the news announced Friday.
"United's deliberate course of action and absence of concern for
its employees is directly responsible for the pension crisis we are
facing today," said IAM General Vice President of Transportation
Robert Roach, Jr. in a prepared statement. "Instead of terminating
pensions, maybe we should explore terminating the employment of
United's top management who have mired the company in bankruptcy
for more than two years."
"United's pension plan for its ground employees is only 30
percent funded, the company has missed $363 million in legally
required contributions, and management has repeatedly stated its
intention to terminate the plan," said PBGC Executive Director
Bradley Belt in a news release. "This action was necessary at this
time to protect the pension insurance fund against further
losses."
"The decision to end a
pension plan is never an easy one," said Belt. "But we must do
everything we can to preserve our ability to pay benefits to the
more than 1 million Americans who depend on us for their pension
benefits. This is especially true in light of the program's current
deficit."
Retirees will keep getting their monthly checks, and other
workers will get their pension when they retire. However, federal
pension laws and benefit caps dictate that many higher paid
retirees will get lower benefits than what they were promised. The
current plan has only $1.2 billion to cover $4.1 billion in
promised benefits. The PBGC is going to contribute $2.1 billion of
the $2.9 billion that United did not place in the plan.
The Machinists Union will be meeting with United and the PBGC on
March 14 to discuss plans to protect their member's pensions. "If
we are successful, the PBGC can abandon its attempt to terminate
our members pensions," said Randy Canale, President of IAM District
141. "Failure by United to reach an agreement with the IAM could
lead to strike action against the carrier."
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