New TA reached!

[Martin Tamme]

Shall I assume that because no one has answered my question about pass priorities that it is unchanged in this TA? Surely someone knows? Rudder?

Pass priorites were not entertained in this TA.

[rudder]

Pass priorites were not entertained in this TA.

Of course they are not contained in the TA - because if they were then every union would believe that they were in fact negotiable.....but this is the real world. Changes, if any, will come after the collective agreements are closed. Deals are made and changes in policy while not linked directly to bargaining can be announced as if they were unrelated.

The answer to this question will not come in the next few weeks but rather by year-end.

[hithere]

So what you are saying is that, while not found in.the body of the TA, there was probably a wink wink, nudge nudge from Acpa to the company(probably reciprocated) that they would like this issue addressed by year end.

[bearinmind]

It dosent make any sense to me.

Contract negotiations are full of hype, posturing by the company and the union. There should be a threat of job action, long extensive negotiating until we have squeezed every last cent out of the company.

This feels like buying a used ice cream maker at a garage sale, The owner wants $3 bucks and you offer $2 and take it home to find out it dosent work. It feels shady.

And if I can chime in on the New hires DC vs existing DB, it will add a third level to the divide that already exists in our group. Anytime that one part of a union splits itself into groups, it makes one group more competitive to the company. Watch the company try to make life difficult for the more expensive DB group and prefer the cheaper DC group. The function of a union is to unify and represent all groups, not take from the poor and keep for the rich which is what is happening here.

If we agree to this we will pay for it in 4 years, when we try to do this process again. We will have a membership with the bottom portion that knows that we felt they are worth less than we were when we sat in that seat. This fracturing of support only serves the managers at the top and beleive me, they know what they are doing.

As pilots holding some of the top positions in Canadian aviation, we need to show our leadership to the rest of Canadian aviation by bringing this group together and not eating our young. To a King air driver in Red lake we must look like a bunch of children fighting over a tonka toy in the sand box.

[Doug Moore]

As pilots holding some of the top positions in Canadian aviation, we need to show our leadership to the rest of Canadian aviation by bringing this group together and not eating our young.

Wise words bearinmind.

I’m a Retired Guy, and as such, I have seen many negotiations come and go. Some readers on this forum aren’t interested in what a Retired Guy thinks or has to say, so this is your cue to move on to the next poster if that is your inclination.

As a Retired Guy, pensions are a Big Deal to me. I spent 40 years contributing and while, even as a 20 year-old I “understood” that a pension was an important part of my future, I never truly appreciated just how important until that day arrived when I had to start living off that pension.

If you don’t know it already, I’m here to tell you now that your employer has had its sights fixed squarely on your Defined Benefit Pension Plan (the DB Plan) for many years now, and particularly since CCAA (bankruptcy protection) in 2003. Why? Because a DB Pension Plan is VERY expensive for THEM to operate and maintain. Those of you who were around back in 2003 surely remember a certain investor whose pre-condition to investing his money in your company was the discontinuance of the company’s DB pension plans for new employees. All employees (not just ACPA) of the day rejected this investor’s pre-condition and so (to his credit) he walked. The employees didn’t blink and the company still found another way to survive.

Skip ahead just 8 years later, ACPA is first out of the gate with its TA and, the rumor is, you’re being asked to approve a Defined Contribution Pension Plan (the DC Plan) for all new pilots hired after ratification.

Why a DC Plan? Because a DC Plan removes all the investment risk from the employer’s shoulder and places it squarely on the shoulder of the employee. In other words, on that day when you retire, they will shake your hand; present you with a nice color photograph of the airplane you just climbed out of (“In appreciation of dedicated service”), slap you on the back and wish you good luck – with your DC Plan! And believe me – you will need more than luck to enjoy the level of pension income from a DC Plan that you’ll get from the current DB Plan.

At this juncture, I’m not going to get into a comparison between DB and DC plans. There are pro’s and con’s for both plans. Google them – educate yourself. You will find that a DB plan is often described as a “gold-plated” pension plan,. whereas a DC plan is considered to be little more than a glorified RRSP. The simple fact that your employer wants out of the DB plan speaks volumes as to which is better, and for whom.

Before you cast your vote for this TA, consider this. Back in 2003, the employee group as a whole stood united in solidarity behind their individual DB Plans. It was a non-negotiable item – even in the face of bankruptcy. If you accept the introduction of a DC Plan today for new pilots not yet hired, the employer will take that to all the other employee bargaining sessions bragging … “well the pilots think it’s OK, what’s the matter with you?” Putting aside the way many employees already feel and think about pilots, your agreement to endorse a DC plan will only serve to confirm their beliefs and feelings about you.

Also consider this. Accepting a DC Plan for new pilots smacks of an “I’m all right, Jack!” and you new guys are on your own. You will be permitting the introduction of a B Scale pension and you will ultimately find yourself working with pilots 5, 10, 20 years from now who will be very resentful of your “gold-plated” DB Plan when they compare their very uncertain retirement income that you so unceremoniously gave away to the one you, yourselves will enjoy.

And gave it away for what? This crack in the door, this “beginning of the end” of the DB Plans is a huge, I repeat a HUGE win for the employer. They want it badly, they want it BIG TIME! And you’re handing it to them – for what? And without a shot even being fired!

Boys and girls … think about this pension plan change … long and hard. You haven’t seen the TA yet so at this point it is all conjecture. But if this rumor is true then it is a game-changer, big time. I hope that you truly understand the implications of what you’re being asked to accept.

Best of luck!

[Idle Thrust]

Wise words Doug. But not allowed on their forum.

Another Retired Guy

[Rockie]

ACPA is leading the Air Canada pilots to ruin on a number of fronts. The only question left is are we going to let them?

Personally I'm not optimistic.

[777longhaul]

For anyone, who reads this forum, and you are an AC pilot, PLEASE, re read Doug Moore's post. IT is the most important item you will ever read in your flying history!! For the younger pilots, (under 40) ya, you know everything now, and you know how life is going to play out, BUT life changes dramatically, over the next few decades, and you will not arrive at the spot, in life, where you are so sure you will now. Thats life.

This is the voice of experience, (Doug's and many others) and the DC plan, is the begining of the end. It will morf quickly into to an us (DC) and them, (DB) at all levels of your entire employment. It will bring nothing, but hardship to those who vote for a DC plan.

The company, will, set up contracts to support the DC plan, at the expense of the DB pilots. Then, they will change the game, until the DC pilots are hung out to dry, upon their elected retirement time. PLEASE, re read Doug's post.

The juniors, new hires, and PG group are already getting screwed, dont let the trend continue to the next wave of new hires in the future. The DC is not, a good deal, for everyone.

You will NEVER ever, see any of the savings (for AC) that this switch over will produce in the future, it will line the pockets of the senior management and its shareholders. Period. ASK yourself, just one important question, why does AC want this so badly?

[FICU]

Correct me if I'm wrong but with a DB plan all the pension money is held by the employer and if said employer goes tits up so does all the pension money. As well, if the company is suffering they can pull money from the DB plan.

With a DC plan the funds are held in the employees account and can't be touched by the company. They are also self directed.

Ask many retired US pilots who had their DB plans raped by their company if they would have preferred a DC pension plan.

[BLZD1]

Doug Moore,

Can I cut and paste your post on the ACPA forum please? I agree 100%.

BLZD

[countryhick]

Correct me if I'm wrong but with a DB plan all the pension money is held by the employer and if said employer goes tits up so does all the pension money. As well, if the company is suffering they can pull money from the DB plan.

DB pension plans in Canada are protected in the event of a bankruptcy, and no, the company can not "dip" into that money. They are able to utilize a payment "holiday" when certain conditons are met.

[What About Me?]

Doug,

As usual, your analysis is spot on!

Hopefully, the rank and file will see the light and vote the new agreement down.

[MackTheKnife]

Correct me if I'm wrong but with a DB plan all the pension money is held by the employer and if said employer goes tits up so does all the pension money. As well, if the company is suffering they can pull money from the DB plan.

With a DC plan the funds are held in the employees account and can't be touched by the company. They are also self directed.

Ask many retired US pilots who had their DB plans raped by their company if they would have preferred a DC pension plan.

FICU, this is not personal and please don't take it as such but your post is just another in a long line of indolent assumptions by the JR group and to me is proof positive of how badly ACPA keeps its troops in the dark.

ACPA's education of its members = NIL.

FICU must have been under these erroneous assumptions or he wouldn't have asked the question. They have done the same with the Age 60 issue, but this time on purpose. Lets keep them in the dark and hopefully it will go away. To say we have moronic, dim witted leadership would be a complement at best.

[genetic jack hammer]

To a King air driver in Red lake we must look like a bunch of children fighting over a tonka toy in the sand box.

NOOOOOOOO...you don't say...

[bluemic]

G'day Doug,

Great words about the DB/DC pension issue.  

One thing no one seems to refer to is that this TA repotedly includes a NEGOTIATED increase to the MPUs.  What is not mentioned is that once the DC plan members outnumber the DB plan members, the majority of the union will have NO incentive to waste bargaining capital on further MPU increases.  

This shift in demographics WILL occur and those pilots hired (over the last fifteen years or so) will find that their pension benefits one day will be effectively capped.

Interestingly, a friend of mine (an active pilot) is against the FP60 idea because, as he puts it, "those who want to keep flying are greedy; they don't care about the junior pilots and their situation".

When we discussed the TA, I mentioned that many current pilots who are junior to him would one day find themselves unable to negotiate improvements to their DB plan.   His comment?  

"Won't effect me, I'll be long gone by then..."

Had to refrain from yelling: "Kettle, you're black!"

IMO - and for what it's worth - This is a bad deal.  It's an ill-disguised end run around the DB pension plan - with money used as the feint.

Mike

Apologies for spelling, formatting, etc. Hard to type with thumbs.

[onspeed]

Wow, some great posts on this page. I think the comments regarding the DB vs DC pension are spot on for the most part. Converting to a DC is a huge mistake that will become extremely dividing in the not to distant future. If they do convert to a DC for new hires I could see the DB plan becoming even more underfunded as the two pension plans start to compete against each other.

Glad to see that most everyone is on side with this. I wonder what Brickhead has to say...

[Thirteentennorth]

As pilots holding some of the top positions in Canadian aviation, we need to show our leadership to the rest of Canadian aviation by bringing this group together and not eating our young.

Wise words bearinmind.

I’m a Retired Guy, and as such, I have seen many negotiations come and go. Some readers on this forum aren’t interested in what a Retired Guy thinks or has to say, so this is your cue to move on to the next poster if that is your inclination.

As a Retired Guy, pensions are a Big Deal to me. I spent 40 years contributing and while, even as a 20 year-old I “understood” that a pension was an important part of my future, I never truly appreciated just how important until that day arrived when I had to start living off that pension.

If you don’t know it already, I’m here to tell you now that your employer has had its sights fixed squarely on your Defined Benefit Pension Plan (the DB Plan) for many years now, and particularly since CCAA (bankruptcy protection) in 2003. Why? Because a DB Pension Plan is VERY expensive for THEM to operate and maintain. Those of you who were around back in 2003 surely remember a certain investor whose pre-condition to investing his money in your company was the discontinuance of the company’s DB pension plans for new employees. All employees (not just ACPA) of the day rejected this investor’s pre-condition and so (to his credit) he walked. The employees didn’t blink and the company still found another way to survive.

Skip ahead just 8 years later, ACPA is first out of the gate with its TA and, the rumor is, you’re being asked to approve a Defined Contribution Pension Plan (the DC Plan) for all new pilots hired after ratification.

Why a DC Plan? Because a DC Plan removes all the investment risk from the employer’s shoulder and places it squarely on the shoulder of the employee. In other words, on that day when you retire, they will shake your hand; present you with a nice color photograph of the airplane you just climbed out of (“In appreciation of dedicated service”), slap you on the back and wish you good luck – with your DC Plan! And believe me – you will need more than luck to enjoy the level of pension income from a DC Plan that you’ll get from the current DB Plan.

At this juncture, I’m not going to get into a comparison between DB and DC plans. There are pro’s and con’s for both plans. Google them – educate yourself. You will find that a DB plan is often described as a “gold-plated” pension plan,. whereas a DC plan is considered to be little more than a glorified RRSP. The simple fact that your employer wants out of the DB plan speaks volumes as to which is better, and for whom.

Before you cast your vote for this TA, consider this. Back in 2003, the employee group as a whole stood united in solidarity behind their individual DB Plans. It was a non-negotiable item – even in the face of bankruptcy. If you accept the introduction of a DC Plan today for new pilots not yet hired, the employer will take that to all the other employee bargaining sessions bragging … “well the pilots think it’s OK, what’s the matter with you?” Putting aside the way many employees already feel and think about pilots, your agreement to endorse a DC plan will only serve to confirm their beliefs and feelings about you.

Also consider this. Accepting a DC Plan for new pilots smacks of an “I’m all right, Jack!” and you new guys are on your own. You will be permitting the introduction of a B Scale pension and you will ultimately find yourself working with pilots 5, 10, 20 years from now who will be very resentful of your “gold-plated” DB Plan when they compare their very uncertain retirement income that you so unceremoniously gave away to the one you, yourselves will enjoy.

And gave it away for what? This crack in the door, this “beginning of the end” of the DB Plans is a huge, I repeat a HUGE win for the employer. They want it badly, they want it BIG TIME! And you’re handing it to them – for what? And without a shot even being fired!

Boys and girls … think about this pension plan change … long and hard. You haven’t seen the TA yet so at this point it is all conjecture. But if this rumor is true then it is a game-changer, big time. I hope that you truly understand the implications of what you’re being asked to accept.

Best of luck!

Doug, at the risk of being accused of hyperbole, this is probably the single most important post on any forum in recent memory. As usual, with your acute perception and grasp of the "big-picture," you've absolutely nailed it. Thanks!

Mike P, also an excellent reminder and a timely heads-up for the more junior guys.

From one retiree to 2 of my esteemed retired colleagues, sincere thanks.

Iain Edghill.

[777longhaul]

FICU

IN the USA, the pension plan, held by the individual airline, is in the hands of the management. You are right about that. A seperate pension, (401K) is available to employees in the USA, that is not touchable by the airline management. So, when an airline, or any other company, that goes under, takes the employee's money with them.

IN Canada, not the same.

AC can not get their hands on the money, if they could they would have already, and lost it. Your pension, and everyone else's comes out of the defined plan, (DB) that you and everyone else pays into, and on top of that, the rest of your pension, comes from AC revenue. IF....AC was wiped out, PART of your pension would be gone, aprx. 40%. Others, will know the exact amount. However, the 60% will exist. These are general numbers, as everyones case is different, and if you are younger than 50, yes 50 not 60. There are many rules, and if you want better information, email your pension chairman. You must go after them, for information, and they will give it to you. The pension committee, works hard on the various pensions. There are 2 pilot pensions. (AC and CAI). There is supposed to be only one, but acpa is holding off on the merger.

INDEXING this is the second most important issue re your pension. Without it, you will loose a very large portion of your pension power very quickly due to inflation. IT will seem like a non issue now, but it is very important, and it is one of the main reasons, FP60 is happening.

acpa threw the indexing up on the table, years ago, to get AC to help them with a specific cause. It was a huge mistake.

DC plans, are worth, what the stock market is doing when the pilot retires, If there is a melt down, the years of DC earnings, effort etc, will be wiped out for the individual pilot. There is very high risk, with a DC, and, the pilot must work at the plan.

The average DB plan for a pilot is managed by professional investors, who, can do the job, while the pilot is out flying. It is not perfect, but it is the only life line at the end of the career. This DC, will screw the juniors, and then eventually, the middle, and then the seniors, as they move through life. IT is a mistake, big time.

Look back 10 20 years, did you know about computers, cell phones, internet, medical problems, bankruptcies, takeovers, world wide financial problems, etc etc, Well, now try to look 10-- 20 or more years into the future, holding onto a DC plan. Some will do ok, depending on their timing, (better known as LUCK), others will be wiped out, after working there ass off to try and build a life for retirement.

Remember the Clint Eastwood movie, " do you feel lucky?"

[yycflyguy]

Wise words Doug. But not allowed on their forum.

Another Retired Guy

Sure it is... post it there.

[The Raven]

To Doug Moore,

Thanks for your insight Doug. Be assured that the pension issue is being debated on the Air Canada Pilots private forum. Several pages so far.

So far, everything that has been written on that forum and this one is purely conjecture. The membership has not seen the tentative agreement yet. The MEC will see it tomorrow (March 28th) for the first time. They have set aside 3 days to look at it. I suspect it will be presented to the membership sometime next week.

I am expecting that in my 33 years at Air Canada this will be the most comprehensive contract I will have ever seen. I understand there are numerous changes.

I am encouraged by what I read on the Air Canada Pilots private forum. There appears to be a lot of knowledge and passion. It should be an interesting couple of weeks.

Soon to join you in retirement,

The Raven

[Doug Moore]

Doug Moore,
Can I cut and paste your post on the ACPA forum please? I agree 100%.

BLZD1, thank you for asking; yes you may copy and paste my comments on the ACP forum. Feel free to use my name, but understand that doing so may cause it to be deleted; I have asked to be admitted to the ACP forum 3 times and have been denied each time. My opinions, and presumably those of other Retirees are not welcome there.

FICU: As others have already pointed out, the pension legislation is very different in the USA. Because that is so, many Americans have had their pensions (their financial future) destroyed by unscrupulous CEOs. If you want a vivid picture of what happened to the employees of United Air Lines watch this PBS documentary that aired a few years ago: http://www.pbs.org/wgbh/pages/frontline ... ntinuous=1

In Canada, pension legislation is much different from the USA and offers a certain level of protection not available to US employees. In the case of our DB Plan, our contributions and those of the employer are pooled and held “in Trust” and the employer cannot touch those funds. In our DB Plan, rules are in place that determine what your pension income will be on retirement, and are calculated on the basis of your years of service and Final Average Earnings (FAE). Legislative rules are in place that require the Administrator (i.e. in our case, the company) to ensure that the plan is properly funded (investment performance, or lack thereof, has significant impact) and if the plan isn’t adequately funded then the company has to inject additional cash. They don’t like that. If the plan is fully funded (usually when investment performance has been good) legislative rules are also in place that allow the company to enjoy a contribution holiday; i.e., you employees must continue to make your contributions but the company can stop making theirs. They like that.

That being said, our DB benefits are not entirely protected. There is a portion of our pension outside the “in Trust” funds that comes from company general revenues. If the company goes out of business then that portion of our pension coming from general revenues is gone.

The company wants to be rid of it all. They want to shed responsibility for pension fund investment performance and they want to rid themselves of the portion of our pension that they must pay out of general revenues. They want to give you their employer’s contribution and then goodbye, you’re on your own. Great deal for them, could be, most likely will be a very lousy deal for you.

Take me as an example. I retired June ’08 - just as the markets had started to crash, due in part to the sub-prime mortgage disaster in the US. With my DB Plan, my pension income was pre-determined. No worries. Period. If I had a DC Plan, first of all I would have required several million dollars (my guesstimate) to generate the lifetime pension income I now receive, and secondly, I would have had to be a very, very sophisticated (not to mention lucky) investor to have avoided losing probably half my pension investments. I know a dentist who had planned to retire next year; his retirement investments got decimated in ’08-’09 and he’s now looking at working indefinitely.

You guys have to talk this up amongst yourselves; involve your Pension Committee. There has to be a reason why this is even being brought to you; well there are at least several reasons mentioned above but they’re all in favor of the company. This is a deal with the devil and there is no reason that I can think of that would be good enough for me. However, I’m out to pasture and mine is a voice that doesn’t count.

You owe it to yourselves to get a handle on this issue and more importantly, get out in front of it.

Cheers,

[777longhaul]

For yycflyguy

from your post above:

Idle Thrust wrote:
Wise words Doug. But not allowed on their forum.

Another Retired Guy


Sure it is... post it there.


end quote.

I dont get it, why do you say, just post it there? Please explain, thanks.

=======================================================================================

Doug, myself, and many many others (active and retired) are not welcome, (denied access) to the ACPF. So, no postings allowed from the undesirables.

They do not want us for many reasons, fine, but the information that could/should be posted there, for all the acpa pilots at AC is being ignored.
That...is just plain stupid.

Pilots, with very long history's, experience, and as a result, a good understanding (learned the hard way) of how a company, and a union should /could work together, can shine the light of day onto many varied situations. This pension, issue, is just one example.

Amazing, how guy's like Doug, who have nothing to gain, put in the time and effort, to try and help out the pilots who are still employeed. Yet, they are treated with no repect. When respect is lost, so is the game.

[Bede]

For those of you who think a DB pension is a sure thing, I hate to burst your bubble.

http://cnews.canoe.ca/CNEWS/Canada/2010 ... 08391.html

Mind you, Nortel's pension was underfunded. That would never happen in this case.

[truedude]

I don't really think those stories are comparable to whats being discussed here. And I also think the laws have changed since then, making pension plans a creditor at the front of the line...

I could be wrong.

As for the whole DB vs DC thing. I don't work for AC, so I will just throw that out there now. But I think the problem with creating a new class of new hires, is that you are essentially splitting an already fractured group even further. It will make future negations moving forward extremely difficult, as you will have two groups with two different perspectives on what should be the priority in future negotiations.

In my little black and white world, I personally feel that a group should remain as one, and us such, anything that is negotiated should apply to the group as a whole--not leave one group who hasn't even showed up in the dust. Its kind of like deciding that you will pay for your current child to go to college, but any future kids are on their own.

But of course, until the details are fully known, I guess its just speculation--but I must say the cliff notes don't make it sound all that great.

[Rockie]

Smarter people than me can make the logical case for DB over DC and to me there is no question. Your own investments backed up by our DB pension is the only way to go. Of course the company wants to get rid of it, and that fact alone should make us want to keep it since they obviously want to get rid of it for a reason. What are we getting for lifting that burden from the company? A pay raise? It would have to be a MASSIVE pay raise for us to even consider giving up our pension which used to be inviolate and rabidly defended by our union.

Worse, far worse than handing this to the company for nothing, is dividing the pilot group this way. It is nothing less than a betrayal by our union. They have forfeited the right to even call themselves that as far as I'm concerned by allowing this to be brought to the table.