…Impact Will Vary…


According to the PBGC, Delta’s employees will fare better than Northwest’s, should those airlines obtain similar court permission to dump their pension plans. Delta’s pension plan is under-funded by $10.6 billion and the PBGC would have to cover $8.4 billion of that, meaning Delta retirees would face a 20-percent cut in their checks if it were applied as a uniform cut across the board. Northwest’s plan is $5.9 billion in the hole but only $2.8 billion will be picked up by PBGC, meaning the retired employees will absorb more than half the loss. The rules governing PBGC payments are particularly hard on pilots. Those who’ve already been there say it’s not what they expected (or planned for) out of retirement. After United’s pension debacle, Rep. George Miller (D-Calif.) conducted an online forum for those affected by the default and more than 2,000 people replied. “We have been overwhelmed — both numerically and emotionally — by the response,” said Miller. The retirees told stories of losing homes, being unable to afford medical treatment and of hitting the bricks, in their 60s and 70s, to look for work. The PBGC guaranteed $45,000 a year for United employees who retired at age 65 and those who retired early pay dearly for it. Since airline pilots must retire at 60, the most they could draw from the newly configured pension plan was $28,000 a year, a cut in pension pay of 80 percent for some of that company’s longest-serving pilots.