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The following letter is from Rich Ransom, IAM, to his membership. As it has
been forwarded to RUPAWEB twice in the last few days, I assume Ruparians would
be interested. It is undated, but the content is timely.
BruceM, webmaster
Dear Sisters and Brothers:
When I sent out the bulletin on Friday regarding UAL's decision to not fund our
pension plans, I felt at that time the bulletin was sufficient, and warranted no
further comments, until that "ugly" news was digested and processed by all.
At the Chairpersons Conference last week in Philadelphia, the conference was
addressed by a member of the Pension Benefit Guarantee Corporation (PBGC) and
our financial advisor Tom Roth, amongst others.
It became quite apparent during these presentations, and one not need to be a
rocket scientist, that UAL, because they decided not to fund the pension plans
when the $72 million payment was due, they were certainly not going to make the
$402 million payment coming due in September. When UAL announced on Friday it
was considering termination of our pension plans, I personally felt a shock wave
run inside me, although it didn't surprise me. I didn't want to believe the
company we all worked so hard for, and gave so much of ourselves to, would think
so little of our sacrifices we made, and less of our financial well being in our
futures, to even consider terminating our pensions. Some of you have lived this
nightmare with other companies, and other airlines. I have met and listened to
your horror stories, albeit never thinking we at UAL would one day face the same
stark reality. Reality is a hard pill to swallow. I sit here writing this e-mail
with, I must confess, bitterness and even hate towards those responsible for our
"demise." That list is a very lengthy list, starting with the prior executives,
and present executives of UAL, although the root cause, I personally believe is
the current administration that sits in the White House. After all, the loan
from the ATSB was denied by White House puppets.
So what will our fate be:
When UAL didn't make the $72 million payment due a couple of weeks ago, some
Government agencies, like the IRS, squirmed a little. Now that UAL has made the
public statement it will NOT fund our pensions I believe the IRS, and a lot of
Senators who fought very hard to give airlines an extension on the funding of
pensions, and convince the IRS an extension was in everyone's best interest,
felt deceived by UAL's actions. I personally felt mugged. It also amazes me how
quiet the media has been reporting this!
If the pension plans are terminated, they will fall into the jurisdiction of the
PBGC. That means to most of us, reduced payments. Some cuts will be large and
some small by comparison. In reality though, whoever takes a cut, it will be
huge, as we are on fixed incomes. It will be compounded also, when we start
paying higher medical premiums. If that isn't enough, here's the extreme bad
news: those of us who retired just recently, and elected the Level Income
feature, will be crucified! If from what I heard by the representative of the
PBGC, is correct, that feature defaults. So for example, if you elected that
feature, and for simplicity sake, your pension is $1000 per month, and when you
reached age 65, your Social Security was going to pay you $1000 per month, you
were now being paid $2000 a month by the UAL pension plan to make up the
difference. At age 65, the Social Security payment by UAL of $1000 would stop,
and than you would receive the $1000 payment by Social Security, therefore, you
would still be receiving $2000 per month, thus the term, Level Income. If the
plan terminates, and I am correct in what I heard, you will only receive $1000
per month, and that $1000 could possibly be even reduced further. If the pension
plans are taken over by the PBGC, each persons account will be reviewed
individually, I'm assuming by computer runs, to determine the exact amount each
will receive. The PBGC has I believe 3 years to review each of us. For the most
part though, it'll be quick. At that time we would either receive a credit for
under payment, or a debit for overpayment, that would have to be repaid. It is
very difficult to determine what each of us would be receiving. Of course the
easy part is determining length of service, and the date of retirement. Then the
hard part is determining, how long each plan was in effect, when you retired, to
come up with the correct multiplier. In some cases there will be only one, and
in some cases, I believe there can be several.
With all said and done, we are still not sure how solvent the PBGC will be. If
UAL files to terminate the plans, I suspect this will be the largest filing
ever, and the PBGC has limited funding from the Government. There funding is not
carte blanche.
Where are the pilots at in all this?, you are probably asking. Their plans are
not due yet to be paid by UAL. I believe they will suffer the same fate as all
of us. We have as most of you know formed a coalition, which consists of: the
IAM, AFA, ALPA, and to the surprise of many, Salaried and Management people of
UAL. They, too, are being destroyed by this company. It appears the only
exemption to this slaughter, is the top executives, which should not surprise
anyone. The night before Tilton issued a statement stating the company would not
pay the $72 million payment, the three trustees of our pension plans submitted
their resignations as trustees of the pension plan to avoid any law suits! These
trustees are also in the executive branch of this company. Our trusted servants
of our futures! Sisters and Brothers, the coalition has committed itself to go
to "war" with this company. To look for every loop hole, to look for every
violation of the law. No executive will be immune or insulated from a law suit,
if need be. No stone will be unturned to look for leverage to overcome these
misdeeds, and deceit. Our pension plans were funded for many years, by the
workers of this company. We gave up many benefits and wages in the years of
negotiations with this company, so that monies would be in our pension plans
when we retired. I can't sit here and guarantee you anything. Whatever the
outcome, that will be, will be. The most important thing, especially those of
you still active employees, had better roll up your sleeves, and be enjoined in
this battle. What this company has and is doing, will be done again to YOU.
Trust is gone. UAL will not be coming out of bankruptcy unit June 2005. I can
guarantee you this, they're going to be knocking down your door, in an attempt
to drive down your standard of living. Remember only one word: SOLIDARITY!
Alone, they're bigger than us, TOGETHER, we are bigger than they! Nobody is
immune from their muskets, and the raid on the workers of this company. Loans
were just given this company, by several lenders, and I can guarantee the
stipulations were, don't you dare fund the pensions. Good ole' corporate
America, the Rich get Richer, the poor get ------! You fill it in the way you
feel!
I wish there was a way of soft peddling this information, but there is not, and
that's not my style. I know each and every one of you, no matter what, wants the
cold hard facts. We have a real tough road in front of us, with a solid brick
wall at the end of it. Hopefully we can build a bridge over or it or a road
around it. With all said and done, hang on tight, and fasten your seat belts!
Keep checking the District web site:
www.iam141.org www.iam141.org and
www.pbgc.gov ,
www.pbgc.gov for Q & A's and any updates. As additional information becomes
available, I will pass it on ASAP.
Good luck,
Sincerely and fraternally,
Rich Ransom
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