The head of the union that represents most airline pilots has endorsed the
Senate action today to revise pension funding rules.
“This fair and necessary legislation will give U.S. airlines the relief
they need to sustain their economic viability, help save many airline
workers` retirement benefits, and protect thousands of jobs,” said Capt.
Duane Woerth, president of the Air Line Pilots Association, International.
In a major victory for airline workers, the U.S. Senate amended and passed
H.R. 3108, The Pension Funding Equity Act. The 86-9 vote in favor of the
legislation was overwhelmingly bipartisan, with 41 Republicans, 44
Democrats, and 1 Independent voting for the bill. The pension relief bill
will help ailing airlines and some steel companies meet their pension
liabilities without having to seek bankruptcy or shifting their retirees`
benefit payments to the Pension Benefit Guaranty Corporation.
“I particularly want to thank Senators Max Baucus (D-Mont.), Charles
Grassley (R-Iowa), Judd Gregg (R-N.H.) and Ted Kennedy (D-Mass.) for their
work on this bill,” Woerth said.
As passed by the Senate, the bill would temporarily replace the
discontinued 30-year Treasury bond interest rate used to calculate
contribution levels of defined benefit plans with a rate based on a
composite of long-term corporate bonds.
The bill also would give airlines and steel companies relief from the
Deficit Reduction Contribution (DRC) payments currently required if the
funded level of their defined benefits plans generally falls below 80%.
Another feature would give multi-employer pension plans two years of
funding relief; however, no airline plans fall into this category.
“We are clearly disappointed that H.R. 3108 does not include restoration
of the US Airways pilots` plan. Nevertheless, we are pleased with the
action taken by the Senate on DRC relief. ALPA has been part of a massive
bipartisan effort working on this issue since early last year. Our goal is
to prevent airlines from being put in a position of having to terminate
their defined benefit plans because they do not have the cash available to
make DRC payments,” Woerth said.
H.R. 3108 must now go to a conference committee between the House and the
Senate to reconcile the differences between the two versions of the bill.
(The House adopted its version of H.R. 3108 on October 8, 2003.)