NWA employees see Bush save pensions

Northwest Airlines employees were among approximately 200 people in attendance at a White House ceremony where President Bush signed the Pension Protection Act into law.“On behalf of all Northwest Airlines pilots, I thank Congress and the Administration for providing our company with the tools to fulfill its pension obligations,” said Capt. Dave Stevens, master executive council (MEC) chairman of the Northwest unit of the Air Line Pilots Association (ALPA) and a Northwest pilot for the last 21 years, who attended the bill signing. “I am hopeful that today’s pension culmination will mark the starting point for the rebuilding of our careers.”

The Pension Protection Act, which received broad bipartisan support in Congress, passed the U.S. Senate by a vote of 93 to five on Aug. 3, and passed the U.S. House of Representatives by a vote of 279 to 131 on July 28.

“At last I can breathe a sigh of relief,” said Sallie Quan, a Northwest flight attendant of 42 years who attended today’s signing. “Knowing all of my hard work will not be in vain is very reassuring.”

The comprehensive legislation protects employees’ pension benefits and strengthens the Pension Benefit Guaranty Corporation (PBGC), which guarantees pension benefits. The legislation contains a provision that will save airline employees’ pension benefits.

“Today is a great day for Northwest pilots and Northwest Airlines,” said Capt. Jim Mackenzie, a Northwest pilot for the last 21 years who also was at the signing. “I am glad the Administration realized that saving our earned pensions was the right thing to do. My sincere thanks to everyone who helped make today’s event a reality!”


Northwest and its unions negotiated pension plan “freezes,” which also freeze the liability for the PBGC. Employees from throughout the airline took part in a company-wide grassroots effort to support passage of legislation to save their retirement benefits. In addition to the tens of thousands of letters, phone calls, e-mails and faxes employees sent, Northwest pilots, flight attendants and airport staff asked members of Congress to support the legislation during Northwest flights and while they were passing through airports. On July 18, nearly 300 employees traveled to Washington on scheduled and specially-chartered flights to make one last appeal to save their pensions, participating in 100 different meetings with congressional offices.

“Today is a wonderful example of what we can accomplish when we work together,” said Janice Everard, a Northwest flight attendant of 15 years who also attended the afternoon ceremony. “Northwest flight attendants and the company have worked hand-in-hand for a long time to ensure employees across America are protected.”

The airline provision of the Pension Protection Act dealing with frozen pension plans has multiple safeguards for the PBGC and taxpayers. Airlines and their employees that have agreed to a hard freeze of their plans, which halts in place the number of plan participants, benefit accruals and prevents future benefit increases, receive 17 years to pay their unfunded liability. In addition, carriers with frozen plans also incur new termination penalties to encourage them to pay their unfunded liabilities.

Airlines with ongoing defined benefit pension plans, that elect not to freeze their plans, also benefit with 12 years to pay their unfunded liability. Carriers with a combination of frozen and ongoing pension plans can take advantage of the frozen plan provision for their frozen plans, and the ongoing plan provision for their ongoing plans. In addition, airlines with ongoing plans can elect to freeze their plans in the future and take advantage of the frozen plan provisions at that time.

“Today, the President and Congress have given retirement peace of mind to 73,000 Northwest pension plan participants,” said Doug Steenland, president and chief executive officer. “Northwest Airlines, the 73,000 participants in our pension plans, and the families that rely on them, all extend our thanks to President Bush and all of the members of the House and the Senate who supported this critical legislation.”

“When we began this long journey nearly three years ago, we set out to achieve something that hadn’t been done before and few thought would succeed,” said Steenland. “Working closely with our unions and Congress, we carefully crafted a responsible solution that would allow us to save our employees’ hard-earned pension benefits, protect the PBGC and taxpayers, and allow Northwest to move forward.”

“The signing of this legislation by the President today is the culmination of an unprecedented cooperative effort involving employees from throughout the company and the management of Northwest,” Steenland added. “While some of our competitors have chosen a much different path with their employees’ retirement benefits, we have always believed saving these plans was the right thing to do for our valued employees, and despite the many obstacles we faced along the way, we did not waver from this commitment.”