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Human Dimension Getting Lost in Pension Debates
On the heels of testimony that Delta and Northwest airlines may soon join United in defaulting on employee pensions, AFA-CWA President Pat Friend told a roomful of senators and executives that the "human dimension" is being overshadowed by discussions of company finances.
"These are real people who are suffering or will suffer due to the profound reduction of promised retirement benefits," Friend told the U.S. Senate Finance Committee on June 7. "Many of our members are now looking at the possibility of working many years longer than they had intended. These are not careless people who failed to plan ... they did everything right. They worked hard, saved as much as they could and invested when possible."
Their only mistake, Friend said, "was one of trust. They trusted the retirement promises United made for decades."
Criticism of the airlines came from Democrats and Republicans alike on the committee, with Senator Charles Grassley (R-Iowa) comparing United to Enron and fellow Republican Jim Bunning of Kentucky asking "why we should reward lousy management?" -- referring to the huge pensions and other compensation executives receive even as their companies declare bankruptcy.
Democrat Ron Wyden of Oregon asked each executive who testified, including United's Glenn Tilton, to pledge that they wouldn't permit executive pensions to be protected while everyone else's benefits were reduced. Each executive agreed.
However, Friend noted in her testimony the irony of Tilton's response to a member who asked about his own $4.5 million pension – an amount he denies is a pension but rather compensation for leaving his last employer. The member asked him why he thought it was appropriate to keep the money when workers were being asked to give up much of their pensions.
Tilton told the member, " 'It's part of my contract,'" Friend said. "Well excuse me for thinking that remark a little arrogant, but you should know – and Mr. Tilton should know – that my pension is part of my contract, too."
Friend, whose sector represents 28,000 active and retired United flight attendants, said that in addition to making hundreds of millions of dollars in concessions to help the airline stay in business, the union has presented detailed proposals for other sources of income to save the pension plan.
Not only did United reject the suggestions without a serious discussion, executives there and at other airlines in the same financial situation are refusing to make management-level cuts as promised. "Again, I ask, where is the shared sacrifice," she asked.
AFA-CWA has also tried to work with the Pension Benefit Guaranty Corporation, which she said "blindsided" the union by accepting $1.5 billion from the airline to terminate the pension plan. Until that moment, she said the PBGC had indicated it had every intention of upholding the company's obligations.
"This Congress should be outraged by the action of the PBGC," she said. "Instead, the overwhelming majority has acted like the PBGC and, to date, stood silently by while thousands of United employees and retirees see their pensions decimated."
Friend urged all members to join in sponsoring the Stop Terminating Our Pensions Act (STOP), introduced in both the House and Senate.
"Passage of this legislation is needed immediately for us to return to the bargaining table with United Airlines to find an internal solution to this problem," she said. "We strongly believe the flight attendant pension plan can be saved and is viable."
"These are real people who are suffering or will suffer due to the profound reduction of promised retirement benefits," Friend told the U.S. Senate Finance Committee on June 7. "Many of our members are now looking at the possibility of working many years longer than they had intended. These are not careless people who failed to plan ... they did everything right. They worked hard, saved as much as they could and invested when possible."
Their only mistake, Friend said, "was one of trust. They trusted the retirement promises United made for decades."
Criticism of the airlines came from Democrats and Republicans alike on the committee, with Senator Charles Grassley (R-Iowa) comparing United to Enron and fellow Republican Jim Bunning of Kentucky asking "why we should reward lousy management?" -- referring to the huge pensions and other compensation executives receive even as their companies declare bankruptcy.
Democrat Ron Wyden of Oregon asked each executive who testified, including United's Glenn Tilton, to pledge that they wouldn't permit executive pensions to be protected while everyone else's benefits were reduced. Each executive agreed.
However, Friend noted in her testimony the irony of Tilton's response to a member who asked about his own $4.5 million pension – an amount he denies is a pension but rather compensation for leaving his last employer. The member asked him why he thought it was appropriate to keep the money when workers were being asked to give up much of their pensions.
Tilton told the member, " 'It's part of my contract,'" Friend said. "Well excuse me for thinking that remark a little arrogant, but you should know – and Mr. Tilton should know – that my pension is part of my contract, too."
Friend, whose sector represents 28,000 active and retired United flight attendants, said that in addition to making hundreds of millions of dollars in concessions to help the airline stay in business, the union has presented detailed proposals for other sources of income to save the pension plan.
Not only did United reject the suggestions without a serious discussion, executives there and at other airlines in the same financial situation are refusing to make management-level cuts as promised. "Again, I ask, where is the shared sacrifice," she asked.
AFA-CWA has also tried to work with the Pension Benefit Guaranty Corporation, which she said "blindsided" the union by accepting $1.5 billion from the airline to terminate the pension plan. Until that moment, she said the PBGC had indicated it had every intention of upholding the company's obligations.
"This Congress should be outraged by the action of the PBGC," she said. "Instead, the overwhelming majority has acted like the PBGC and, to date, stood silently by while thousands of United employees and retirees see their pensions decimated."
Friend urged all members to join in sponsoring the Stop Terminating Our Pensions Act (STOP), introduced in both the House and Senate.
"Passage of this legislation is needed immediately for us to return to the bargaining table with United Airlines to find an internal solution to this problem," she said. "We strongly believe the flight attendant pension plan can be saved and is viable."