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Akaka introduces pilot pension legislation

MEDIA RELEASE

U.S. Sen. Daniel K. Akaka (D-Hawaii) and Congressman George Miller (D-California) introduced the Pension Benefit Guaranty Corporation Pilots Equitable Treatment Act.

This legislation would provide fair pension benefits to pilots who are currently receiving a reduced pension because of a discrepancy between a former Federal Aviation Administration (FAA) rule that required them to retire no later than age 60 and a Pension Benefits Guaranty Corporation (PBGC) requirement that they retire no earlier than age 65 to receive maximum retirement benefits.

Akaka and Miller introduced the bill in the Senate and House with cosponsors Senators Tom Harkin (D-Iowa) and Dick Durbin (D-Illinois) and Representatives Dale Kildee (D-Michigan), Mazie Hirono (D-Hawaii), Raul Grijalva (D-Arizona), and Dave Loebsack (D-Iowa).

“Many pilots whose pension plans were taken over by the PBGC are unfairly penalized due to a conflict in aviation regulation and pension law,” Akaka said. “The PBGC requires pension beneficiaries to work until age 65 to receive their maximum retirement benefit, but the FAA required these pilots to retire at age 60. This legislation will fix this conflict and end the unfair penalty affecting these pilots.”

“The federal government puts some airline pilots in an unfortunate Catch-22 when it comes to their retirement,” Miller said. “This trap results in an artificial reduction in their promised pension just because two federal agencies contradict each other. This is fundamentally unfair and pilots should earn every dime of their pension benefits that are owed to them.”

Capt. Lee Moak, president of the Air Line Pilots Association, International, (ALPA) said: “The Air Line Pilots Association, Int’l, applauds the reintroduction of this much-needed pension reform legislation to promote fairness for airline pilots whose pension plans were terminated or frozen as a result of their airline’s bankruptcy. Pilots who retired during the era of federally mandated age 60 retirement were severely disadvantaged during pension plan terminations when compared to workers who were not prohibited from working beyond age 60. Once enacted, this legislation will level the playing field, and ALPA is grateful to Senator Daniel Akaka and Representative George Miller for their dedication to resolving this inequity once and for all.”

Capt. Mike Cleary, president of the US Airline Pilots Association (USAPA) said: “On behalf of USAPA and Government Affairs Committee for USAPA, we are very appreciative to Senator Akaka and Representative Miller for introducing this bill. Airline Pilot’s Defined Benefit plans were crafted to be payable in accordance with the then federally mandated retirement age of 60. The ability to do this without additional penalty is a cornerstone to the fair treatment of our pilots. This bill goes a long way to bring the respect and fair treatment that our pilots have earned and deserve. Senator Akaka and Representative Miller continue to be important allies in the effort to recognize and preserve the careers of our pilots and we are very thankful for their steadfast support.”

The PBGC pays monthly retirement benefits to retirees in pension plans that cannot pay promised benefits, but the benefit paid by the PBGC may be less than what the employer promised.

To receive full PBGC benefits, retirees are required to work until at least age 65. However, until late 2007 the FAA required pilots to retire at age 60.

As a result of this discrepancy, affected pilots’ retirement benefits are reduced by approximately one-third.

The Fair Treatment of Experienced Pilots Act was signed into law Dec. 13, 2007, increasing the maximum age of retirement for pilots to 65. However, this law does not help pilots who were required to retire before that date.

The Pension Benefit Guaranty Corporation Pilots Equitable Treatment Act would direct the PBGC to calculate pension benefits based on retirement eligibility beginning at age 60 instead of age 65 for these retired pilots whose pensions were affected by the discrepancy.

The bill would apply to pilots of ailing airlines whose pension plans have already been or may be assumed by the PBGC and who were prohibited from working as pilots at age 60 and older. It applies to payments going forward and does not require a recalculation of past payments.

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