Pension agency meets with Aloha employees
The Pension Benefit Guaranty Corp. will explain changes since bankruptcy
Aloha Airlines' machinists union met with representatives of the Pension Benefit Guaranty Corp. at Honolulu Airport yesterday as the federal agency began three days of meetings involving the carrier's terminated defined-benefit plans.
The PBGC, created in 1974 to insure retirement plans of U. S. workers, took over the pension plans for the majority of Aloha employees on April 27. Aloha terminated plans for its pilots, machinists, clerical workers and non-represented employees earlier this year as part of its reorganization and emergence from bankruptcy. Aloha came out of Chapter 11 on Feb. 17.
About 120 members of the International Association of Machinists and Aerospace Workers District 142, which represents mechanics and inspectors, met for about an hour to get information about their benefits and how they were calculated.
PBGC spokesman Jeffrey Speicher said 75 of the 350 people in the unit will receive a reduction in their benefits. The maximum annual distribution that the PBGC pays for a pensioner at age 65 is about $45,000.
Another meeting with the IAM was scheduled last night and again today before what promises to be a contentious meeting at 6:30 tonight involving the Aloha pilots. The pilots, who are the highest-paid union employees at the airline, face cuts in their benefits of as much as 70 percent. There are about 250 active pilots at Aloha and more than 100 retired pilots.
During Aloha's bank-ruptcy, the Aloha unit of the Air Line Pilots Association negotiated a provision that if Congress passes a bill allowing for the amortization of pension liabilities, that Aloha and ALPA will jointly petition the PBGC to restore the pilots' pension plan to a frozen state, in which no further contributions will be permitted.
President Bush is scheduled to sign a pension bill tomorrow that triggers that provision, granting airlines who have frozen their pension plans up to 17 years to pay off current underfunding.
U.S. Sen. Dan Akaka had supported an amendment to the pension legislation that would have required the PBGC to pay benefits to pilots as if they were 65 years old, but it failed to emerge from conference committee. Federal laws require pilots to retire at age 60.