Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
United Airlines trying to dump pension obligation
Old 05-10-2005, 01:55 PM   #1
Recycles dryer sheets
 
Join Date: Apr 2005
Posts: 62
United Airlines trying to dump pension obligation

http://abcnews.go.com/Business/wireStory?id=744434

An overflow crowd of current and former United Airlines workers turned up at a downtown bankruptcy court Tuesday, delaying a courtroom showdown between the carrier and its labor unions over its most radical attempt yet to slash costs.

The target this time: employee pensions.

The carrier is seeking a judge's approval of its plan to have the government's pension insurer take over its defined-benefit plans, resulting in the largest-ever U.S. pension default. United workers would lose about a quarter of their total pensions if they are shifted to the Pension Benefit Guaranty Corp.
Before the hearing, United Chief Financial Officer Jake Brace said the carrier has no choice but to seek the difficult action.

"All the work we have done and continue to do is about ensuring a healthy United for all our employees and our customers," Brace said. "That work enables competitive jobs and a successful future for our company."
__________________

__________________
BristolBane is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: United Airlines trying to dump pension obligation
Old 05-10-2005, 08:13 PM   #2
 
Posts: n/a
Re: United Airlines trying to dump pension obligation

After reading that story and the similar one on MSNBC, I'm still missing something. Is it a simple case of United saying "Hey, we don't have enough money for the money we owe our employees, can we simply not pay them?" and the government says "Yes, that's OK."?

What's the full story?
__________________
  Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-10-2005, 10:38 PM   #3
Full time employment: Posting here.
 
Join Date: Nov 2002
Posts: 768
Re: United Airlines trying to dump pension obligation

They belong to a union, and unions don't support Republicans. The Republicans want to make an example of them.
__________________
Michael is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 06:46 AM   #4
Recycles dryer sheets
 
Join Date: Nov 2003
Posts: 69
Send a message via AIM to Newell
Re: United Airlines trying to dump pension obligation

Michael

You can't be serious --- can you?
__________________
Newell is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 07:44 AM   #5
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
Re: United Airlines trying to dump pension obligation

Quote:
Originally Posted by oldbykur
Michael

You can't be serious --- can you?
Sounds like Mikey extended cocktail hour a bit

In bankruptcy, you can cancel almost any contracts or obligations
if you can get court permission. Seems to me the pensions
are a good place for United to start. Martha may weigh in.

JG
__________________
MRGALT2U is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 08:00 AM   #6
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Re: United Airlines trying to dump pension obligation

There is a section of the bankruptcy code dealing with retiree benefits and modifications can be make to those benefits that are necessary to permit the debtor's reorganization if all creditors, the debtor, and affected parties are treated "fairly and equitably". Etc.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 08:05 AM   #7
Recycles dryer sheets
 
Join Date: Oct 2004
Posts: 178
Re: United Airlines trying to dump pension obligation

See my earlier "Work is the New Retirement" thread.

United's defined-benefit program off-loading to the PBGC has to be one of the most coldly calculated evasion maneuvers I've ever seen. The PGBC accepted $1.5 billion in debt and equity in a reorganized UAL, but assumed pension plans underfunded by as much as $4 billion, net. Great investment for UAL, lousy investment for taxpayers.

I read about one woman whose $1,700 monthly pension has been reduced to $800. If memory serves she was in her early fifties....a few years away from non-penalized 401K withdrawals and many years away from Social Security. Welcome back to the labor pool, dear.

Ed
__________________
gratefuled is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 08:38 AM   #8
Thinks s/he gets paid by the post
Eagle43's Avatar
 
Join Date: Jan 2005
Location: DFW
Posts: 1,879
Re: United Airlines trying to dump pension obligation

http://www.mastersforum.com/archives/drucker/

1. Demographic Upheavals

Set aside technology and wars and politics and economics and business for a moment. The greatest revolution taking place today is in the demographic makeup of the nations of the world.

The danger turns out to be no overpopulation, which environmentalists have been warning us about, but underpopulation. There will simply not be enough young people in the next century to support all the old people.

The shrinkage of the pool of young people is not only very rapid, it is irreversible.

Otto Von Bismarck started this trend in motion in 1888 when he created the first social security plan, with a retirement age of 65. Only, he didn't plan on a lot of Germans reaching that age. Today, life expectancy is in the 70s and 80s in developed countries. The birth rates are not keeping up with the accumulation of healthy old people.

The unavoidable implication of this shift is that future politics will be decided by a group of old people who produce nothing and use up much of their societies' resources.

For one thing, Drucker said, we will have to raise retirement age, to 75 or even higher. For another, the nature of retirement will change. Expect people in the next century to phase in and out of retirement. And why not? They will be in better shape than 75 year olds of this era, and will have great job mobility from having worked in many positions and places in their careers.

----------
Can you spell "Coming Generational Storm"? United is just the tip of the iceberg. Sad, but inevitable.
__________________
Resist much. Obey Little. . . . Ed Abbey

Disclaimer: My Posts are for my amusement only.
Eagle43 is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 05:47 PM   #9
Full time employment: Posting here.
 
Join Date: Nov 2002
Posts: 768
Re: United Airlines trying to dump pension obligation

Quote:
You can't be serious --- can you?
"You reward your friends and punish your enemies, if you can."

Quote from Republican President Richard Nixon

http://www.libs.uga.edu/media/collec...nixonday7.html
__________________
Michael is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 06:06 PM   #10
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
Re: United Airlines trying to dump pension obligation

Quote:
Originally Posted by Michael
"You reward your friends and punish your enemies, if you can."

Quote from Republican President Richard Nixon

http://www.libs.uga.edu/media/collec...nixonday7.html
I'm not too sure where this thread is heading, but rewarding your friends and punishing your enemies seems perfcetly logical to me.

JG
__________________
MRGALT2U is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 06:32 PM   #11
Full time employment: Posting here.
 
Join Date: Nov 2002
Posts: 768
Re: United Airlines trying to dump pension obligation

Which is exactly why I think airline union members are doomed. They vote against Republicans, so they are their enemy.

The Republicans decided that somehow paying off the tobacco farmers $12 billion was somehow a sensible thing to do, and tobacco farmers basically spent their lives killing Americans. All the while lamenting that protecting airline mechanics who spent their lives working to build the USA was stupid. Guess which group gives the most political contributions to Republicans?
__________________
Michael is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 06:41 PM   #12
Recycles dryer sheets
 
Join Date: Nov 2003
Posts: 69
Send a message via AIM to Newell
Re: United Airlines trying to dump pension obligation

PBGC was created, at the urging of labor, to prevent the total loss of pension benefits for employees of defaulting companies as part of ERISA (Employment Retirement Income Security Act). Want to guess which president signed it into law in 1974? Clue -- his nickname was Tricky Dick
__________________
Newell is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 06:53 PM   #13
Full time employment: Posting here.
 
Join Date: Nov 2002
Posts: 768
Re: United Airlines trying to dump pension obligation

May the Lord bless his soul. Its just a shame that so many people have to lose half or more of their pensions when the agency takes over.
__________________
Michael is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 06:58 PM   #14
Recycles dryer sheets
 
Join Date: Nov 2003
Posts: 69
Send a message via AIM to Newell
Re: United Airlines trying to dump pension obligation

So, would the solution be more advantageous for employees if PBGC didn't exist (probably meaning the loss of ALL of the employees' pensions)?
__________________
Newell is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 07:01 PM   #15
 
Posts: n/a
Re: United Airlines trying to dump pension obligation

I can't understand why we don't go after the executives that plundered the assets of the company. They are sitting in their Florida Mansions with 10's of Millions in their Bank Accounts!
__________________
  Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 07:02 PM   #16
Full time employment: Posting here.
 
Join Date: Nov 2002
Posts: 768
Re: United Airlines trying to dump pension obligation

No. *The ideal solution would be to fully fund pensions. *Don't make people work 30 years, and then not pay them what they were promised. *The PGCG should be funded to provided everything that was promised also.

According to the WSJ, the PBGC has agreed to pay $6.6 billion in UAL pensions, and dumped $3.2 billion. *IOW, the union workers will lose 1/3 of what they were promised. *Better than nothing, but it is sure a rotten thing to do, now that they have already put in the years of hard work. *They should have told them the day they applied for a job that they had no intention of paying all of their promised pension. *That way they could have decided whether they wanted to pursue another line of work or not.

http://online.wsj.com/article/0,,SB1...age%5Fone%5Fus
__________________
Michael is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 07:19 PM   #17
Recycles dryer sheets
 
Join Date: Nov 2003
Posts: 69
Send a message via AIM to Newell
Re: United Airlines trying to dump pension obligation

I agree that this will be a tremendous hardship for a number of workers. I also agree that much (most?) of the fault lies with management. Let's just not blame the Republicans (or Democrats). It seems to be in vogue today to blame the Republicans for every evil known to mankind, including athletes foot, and, quite frankly, it's wearing thin!
__________________
Newell is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 07:27 PM   #18
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
Re: United Airlines trying to dump pension obligation

Quote:
Originally Posted by Cut-Throat
I can't understand why we don't go after the executives that plundered the assets of the company. They are sitting in their Florida Mansions with 10's of Millions in their Bank Accounts!
Man, you are almost 55. Wake up! This is the way the world works.
Besides, I'd rather leave the execs with their mansions and millions
than let the government sort it out. Sorry. Your "rant" just seems
like complete nonsense to me.

JG
__________________
MRGALT2U is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 07:29 PM   #19
Full time employment: Posting here.
 
Join Date: Nov 2002
Posts: 768
Re: United Airlines trying to dump pension obligation

I did not intend to offend you oldbykur. Since this is a sensitive topic for you, I will do as you ask and drop it.
__________________
Michael is offline   Reply With Quote
Re: United Airlines trying to dump pension obligation
Old 05-11-2005, 07:54 PM   #20
 
Posts: n/a
Re: United Airlines trying to dump pension obligation

Quote:
Man, you are almost 55. Wake up! This is the way the world works.
Well, we used to King of England's Ass over here, and that is the way the world worked then. There are those that accept the status quo and those of us who don't.

I would have thought you were one of the later!
__________________
  Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Military pension and pay - how much is it past 20 Average Joe FIRE and Money 13 03-18-2007 11:22 AM
Pension Time Bomb Article Mountain_Mike FIRE and Money 11 01-17-2006 07:49 AM
The Fat Pension newellcr Young Dreamers 34 07-26-2005 09:23 AM
United Airlines wants to just 'Forget' Pension Promise..... Cut-Throat FIRE and Money 87 05-15-2005 11:16 AM

 

 
All times are GMT -6. The time now is 03:36 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.