Airline Pension Crisis. Effect on Railroad Retirement?

[Anonymous]

To LimitedClear - I stand corrected that RRB and SSA are not connected.

It would appear that the UAL pension obligation would go into the "Pension Benefit Guaranty Corp." (PBGC) which was started, as I recall, with the failure of Bethlehem Steel. This would be where UAL retirees would wind up with, in some cases, with lower payments than the UAL plan.

Adding them to the RRB , I believe, would require an act of Congress which I am sure would surely rile up the RR unions and Brotherhoods.


Interesting topic looking from the outside.


Regards, Jerry

[Anonymous]

QUOTE: Originally posted by arnstg

Airline pensions are privately funded and privately operated by the airlines.

As I recall, Railroad pensions are provided through the government agency called the "Railroad Retirement Board" {RRB} which predates Social Security.

The RR pensions were not set up by the railroads as some employees drifted from RR to RR. Think the term for them was "Boomer".

I believe the Social Security System Administration now also takes care of the RRB.

Both employees and the RR contributed to the RRB. As I recall, it was much higher than the rate for Social Security when it started.

Sorry, that's the best that I can recall. Anybody else who can add anything?

You are partially correct. The U.S. Railroad Retirement Board (RRB) is a separate Federal agency headquartered in Chicago (www.rrb.gov). It is separate from the Social Security Administration and is not operated by SSA in any way. The RRB administers the Railroad Retirement Act and the Railroad Unemployment Act.

At present, airline pensions are privately funded by the airlines. The question is, in light of the current airline bankruptcies and efforts by the airlines to shed their pension plans, if the government might come in and bail out these pension funds which are substantially underfunded. One possible way of structuring such a bailout could be to put these airline employees (and retirees) under the RRB which could have all sorts of effects on RRB.

Oh, and yes, both railroads and their employees contribute to Railroad Retirement.

LC

[Anonymous]

Airline pensions are privately funded and privately operated by the airlines.

As I recall, Railroad pensions are provided through the government agency called the "Railroad Retirement Board" {RRB} which predates Social Security.

The RR pensions were not set up by the railroads as some employees drifted from RR to RR. Think the term for them was "Boomer".

I believe the Social Security System Administration now also takes care of the RRB.

Both employees and the RR contributed to the RRB. As I recall, it was much higher than the rate for Social Security when it started.

Sorry, that's the best that I can recall. Anybody else who can add anything?

[MP57313]

Yeah the numbers are real gloomy. Some people who were with now-defunct carriers (Eastern, Pan Am) did lose out in some way.
Best advice is try to stay healthy so that you try to retire...someday...

[Anonymous]

Skeets-

If its any comfort you'll be retired a decade before I am...

LC

[Anonymous]

Tell it like it is because I'm in the same boat as you. Enough time to retire too, but not old enough.

[Anonymous]

The US Gummint is the guarantor of many of these systems. In other words, if the private system fails, the US will take over payments. The only little problem with this is the US liability for all their obligations of all kinds could run somewhere near $47 TRILLION according to figures I read in "The Daily Reckoning". That's more than the entire net worth of the entire frigging country! If the economy collapses, and even half of these obligations pass to the government, we all are screwed.

The politicians have been trading on what they can "give" us; if you doubt that, recall the recent party convention. If you think that only applies to one party, watch the next party convention later this month. For years the political class have been attempting to hold things together on their own watch, continuing their glorious carreers of "selfless, public service", putting off the inevitable until some unfortunate future generation.

I have more than enough time to retire, but am too young. Under current rules, I can't retire until 2010. I'll be lucky if I still have a job, let alone retirement.

[Anonymous]

A recent article in the New York Times indicates that a collapse and subsequent bailout of airline pensions may be in the future as United Airlines has stopped making pension contribjutions duiring its bankruptcy. Delta Airlines reported a quarterly loss of $2Billion and may seek to jetison its pension liability causing a cascade of such activity among airlines according to the NYT.

An interesting question is, given the history of railroads and airlines being governed by some of the same labor rules (NMB, etc) will a bailout of airline pensions resjult in airline pensions being included in an expanded Railroad Retirement? What positive and negative effects would this have on the RRB?

LC