For Pilots, Reduced Pensions; US Airways, Union Make Deal to Help in Bankruptcy

The Washington Times (Washington, DC), March 24, 2003 | Go to article overview

For Pilots, Reduced Pensions; US Airways, Union Make Deal to Help in Bankruptcy


Byline: Tom Ramstack, THE WASHINGTON TIMES

US Airways and its pilots union reached an agreement on an underfunded pension plan during the weekend, clearing a critical hurdle to the air carrier's emergence from bankruptcy protection to free more than $1 billion in financing.

Arlington-based US Airways' efforts to eliminate its pension obligations have sent a chill through the retired pilots, whose lifestyles could be altered for the rest of their lives.

The airline has sought to restructure the pilots' pension plan to reduce its costs. Under the existing plan, the airline estimates, it will have to contribute $1.6 billion during the next seven years to keep the plan solvent.

The company believes it can afford to contribute about $850 million. It has proposed canceling the existing plan and using the $850 million to start a smaller plan.

The agreement on a new program was made Saturday between US Airways and the master executive council of the Air Line Pilots Association, both parties' Web sites said. Details were not disclosed. The revised plan requires the approval of the federal Pension Benefit Guaranty Corp., which guarantees employer pensions.

Spokesmen for US Airways and the union did not return telephone messages yesterday.

The stock market's poor performance the past three years has withered many companies' investments, leaving them with pension-fund deficits that are cutting away at profits.

US Airways' retirees have been worried that they will lose a chunk of the regular benefit checks they will receive for the rest of their lives.

One of them is Wayne Grimes, a 63-year-old pilot who retired from US Airways after 30 years and lives with his wife in Moneta, Va.

"It's kind of taking away my play money," Mr. Grimes said before the deal was announced. "I was counting on this money for extra things around the house here and vacations. We're definitely going to have to cut back on those things."

Mr. Grimes considers himself lucky compared with some pilots. He has opted to take 75 percent of his retirement benefits in a lump sum and the rest in an annuity that gives him monthly checks.

Some retired pilots chose to take all their benefits as annuities, which means they risk losing much of their $75,000 to $80,000 per year in payments.

Retired US Airways pilots have organized an association they call the Soaring Eagles.

Tom Davis, the group's spokesman, said some of his fellow retired pilots who depend on annuities are becoming despondent.

"Their life insurance has been canceled, and their health benefits have been changed twice in the last six months," he said. "They are selling their assets. Their own personal feeling is that they should have done better at managing their personal affairs."

US Airways officials say they are merely confronting difficult realities.

Replacing the pilots' pension plan is "critical to the company emerging from Chapter 11" bankruptcy protection, spokesman David Castelveter said.

"It is the only time we have been in this situation," he said. "It was predicated mostly because of the market conditions stemming from the horrific events of September 11."

Many companies and retirees face similar problems.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

For Pilots, Reduced Pensions; US Airways, Union Make Deal to Help in Bankruptcy
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.