Questions & Answers
Questions and Answers 47 - 48
Question 47: I’m still confused about the pension issue. Delta’s pension plan has a Social Security “offset,” making it perfectly acceptable for the airline to reduce retirement income by the amount a non-union Delta flight attendant receives from the U.S. government. Would we be subject to Delta’s pension language, too?
Answer: Our defined benefit plan (from the time of the pre-bankruptcy freeze) is not subject to the offset that Delta has mandated for its pension fund participants, regardless of whether Northwest Airlines or Delta Air Lines is the plan sponsor.
The Employee Retirement Income Security Act of 1974 (ERISA), a federal statute, protects pension benefits once the benefit is accrued under the terms of the plan. So, the language in Delta’s pension plan has no effect on our accrued benefits, earned while working for Northwest Airlines.
While ERISA secures benefits already earned under a company’s retirement plan, it does nothing to help improve retiree benefits as the costs of retirement rise. That’s one huge advantage of maintaining a voice during future contract negotiations – having the right to negotiate things like increased employer contributions to our Retirement Savings Plan (contract Section 30 – Retirement Plan Agreement) and improvements to retiree healthcare (Section 29 – Insurance), for example, is critical to Northwest flight attendants, especially to those who retire before age 65 and are not yet eligible for Medicare. These legally enforceable contract protections are negotiated benefits, made possible only through our AFA-CWA union contract.
We won’t lose our accrued benefits in a merger, that is a fact. Those pension plan earnings are protected. What is open to “executive decision” if we are left without a union, a legal voice at the bargaining table, is our right to negotiate better pension benefits – even a chance to eliminate the Social Security offset in the future – as employees of Delta Air Lines.
Question 48: That leaves one unanswered question about my potential to earn greater pension benefits as a Delta employee. Are you saying that without a union contract, all pension decisions – from retiree health insurance, to offsets, to the amount of employer contributions in my defined contribution plan – are left up to the benevolence of Delta management?
Answer: The short answer is, “Yes.”
Delta executives have unilateral control over their non-union employees’ retirement programs. Retiree health insurance has changed dramatically since the airline’s bankruptcy, and is subject to change again whenever Delta executives deem such change necessary. In fact, Delta’s non-union retirees have been saddled with extraordinary increases in health insurance premiums, well above what was promised upon retirement from the company, since benefits are not negotiated but are controlled solely by Delta management.
Our AFA-CWA contract (Section 29 – Insurance) was negotiated to include benefits for flight attendants retiring who meet “the eligibility criteria for a Disability, Early or Normal Retirement under the Northwest Airlines, Inc. Pension Plan for Contract Employees.” These benefits continue until the first day of the month in which the retiree becomes 65 in most cases, and are extended to the retiree’s spouse or domestic partner and eligible dependent children as well. Rates of monthly premium are based on years of benefit accrual service and age at retirement (see Section 29.c.(2.)a.i. through iii.); rates are capped at a 7% increase annually.
The Delta Air Lines Retirement Committee (DALRC.org) has much information online about promises made and broken by Delta management to non-contract employees, a workforce dedicated to service at the airline even while executives drove it into bankruptcy. The Delta pension plan includes a lower employer contribution than our negotiated plan (Section 30.D.), and there is nothing preventing Delta from lowering that contribution further whenever management decides it needs the cost savings from lowering or eliminating employees’ benefits.
For many Northwest flight attendants, our next contract will be our last shot at securing an improved employer contribution to our defined contribution pension plan, our final push to improve retiree health insurance coverage, and our benefits blueprint into and throughout our retirement after devoting most of our working lives to this company. We must be sure our right to negotiate retirement benefits remains as secure as our government-protected pensions. We can do this by voting to maintain union representation at the “new” Delta after the merger. Our future in retirement depends on our ability to negotiate with Delta.
Posted by Communications on 07/22 at 05:36 PM