Flight Attendants Appeal for Pension Fairness
May 10, 2005
WASHINGTON, D.C. - Describing how they had sacrificed dearly to save their carrier in exchange for the promise of good pensions, United Airlines flight attendants visited Capitol Hill today to appeal for fair play in retirement security and denounce a United bankruptcy scheme that preserves management pensions while robbing them of theirs.
"More and more there seems to be two sets of rules; one for the American worker and one for corporate executives," said Patrice Anderson, a United flight attendant for 30 years. "The bankruptcy system should not be used to saddle the American taxpayer with billions in liabilities so that companies, like United Airlines, can continue to pay its executives bonuses and fund executives' irrevocable pension plans."
Reps. George Miller (D-Calif.) and Jan Schakowsky (D-Ill.) were on hand to introduce the "Pension Fairness and Full Disclosure Act" and join the Association of Flight Attendants-CWA (AFA-CWA) in urging a Chicago bankruptcy court to reject United's plan to dump $9.8 billion in pension liabilities.
The court today was to hear United's deal with the Pension Benefit Guaranty Corp. (PBGC) to pass $6.6 billion of United's pension liabilities to taxpayers, which would mean that flight attendants and other airline employees will lose one-third of their promised retirement benefits. The PBGC, meanwhile, already is running a $23 billion deficit.
"United is trying to manipulate the bankruptcy process, plain and simple," said Patricia Friend, national president of the AFA-CWA. "This management team decided early on that it would dump its employees pensions, and it has refused to negotiate – even though the flight attendants have a very affordable plan. Instead, they insulate their own pensions from creditors and deal under the table with the PBGC. It's unconscionable."
The "Pension Fairness and Full Disclosure Act" would level the playing field, prohibiting corporations from increasing deferred executive compensation for five years after declaring Chapter 11 bankruptcy to avoid their pension costs. Companies with under-funded pension plans would not be allowed to fund executive pensions until rank-and-file plans are at least 75 percent funded.he pension fairness legislation also moves to lift the shroud of secrecy that often surrounds executive compensation schemes, requiring full disclosure before pension plans can be frozen, cut or terminated.
Anderson, the United flight attendant, described the union's fight to win pension benefits.
"Our retirement security exists because the AFA fought to obtain a defined benefit plan, so flight attendants could look forward to a reasonable living standard in their old age," Anderson said. "This also benefited United Airlines through engaged and committed employees who understood every day of work was not just a paycheck for today, but also a contribution to her or his financial future.
"But the possible loss of hundreds of dollars a month in old age changes a dignified retirement into a subsistence-level retirement," she added.
Rep. Miller's legislation has been spurred by the growing trend of corporations lavishly rewarding their executives while cutting or even eliminating their employees' pensions. Management at United and other airlines have proven to be particularly egregious violators of this employment trust.
Three months before declaring bankruptcy in 2002, United placed $4.5 million in a special trust for CEO Glen Tilton, though the airline soon demanded hundreds of millions of dollars in employee concessions. By the time senior executives publicly took a 15 percent salary cut in January of this year, Tilton had already collected $3 million from his protected trust.
When US Airways declared bankruptcy in 2002, thousands of employees lost their pension plans, only to discover that CEO Stephen Wolf had already received his own "golden parachute" months before, in a lump sum of $15 million.
As the company sought to avoid bankruptcy last year, Delta Air Lines executives demanded - and got - a 32.5 percent pay cut and a five-year wage freeze from pilots. But six of the carrier's top execs failed to display similar austerity, instead awarding themselves $1.9 million in stock options.
More than 46,000 Flight Attendants, including the 21,000 Flight Attendants at United, join together to form AFA, the world's largest Flight Attendant union. AFA is part of the 700,000 member strong Communications Workers of America, AFL-CIO. Visit us at http://www.unitedafa.org/ .