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The sentiments revealed in the more than decade-old Obama video, however, are far different those Romney expressed at a Florida fundraiser this May. Referring to efforts to restore the efficacy of government, then-Illinois state Sen. Obama said:
“The trick is figuring out how do we structure government systems that pool resources and hence facilitate some [wealth] redistribution -- because I actually believe in redistribution, at least at a certain level to make sure that everybody’s got a shot.”
A request for comment to confirm the authenticity of the leaked Loyola video was not immediately returned by the Obama campaign.
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American Airlines sends thousands of layoff notices
Mary Altaffer / AP
American Airlines has told over 11,000 workers they could lose their jobs as part of its reorganization.
By Roland Jones, NBC News
American Airlines has told over 11,000 workers they could lose their jobs as part of its reorganization in bankruptcy.
However, the U.S. airline, which filed for Chapter 11 bankruptcy protection in November, said it expects that fewer than 40 percent of those it sent notices to, or 4,400 people, will actually be laid off in November and December.
The job cut notifications come as a result of the Worker Adjustment and Retraining Notification (WARN) Act, which requires workers to be told about major layoffs or plant closures 60 days in advance.
Jamie Horwitz, a spokesman for the Transport Workers Union, a representative for workers that received WARN Act notices said the layoff notices “will look worse than the actual layoffs.”
Horwitz said about 800 employees had agreed to leave American voluntarily, a move that will further reduce the number of expected layoffs. American said in February it planned to cut up to 14,000 jobs as part of a plan to slim down its operations in bankruptcy.
American also said it is cutting flights by one to two percent for the rest of September and October. The cuts are partly due to an increase in pilot sick days and greater maintenance reports by flight crews led to flight cancellations and delays, Hicks said. American operates about 1,700 flights a day.
According to flight tracking service FlightAware.com, over the past two weeks American Airlines has canceled more flights than any other major U.S. airline.
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I figure Obamas old remark will PO fewer of his base the Romneys remarks. Is the government supposed to save American airlines? What's the reason for the post? To highlight the poor business model of American Airlines?
NEW YORK (Reuters) - American Airlines is heading toward the largest default of a defined-benefit pension plan in U.S. history.
It's a messy story involving 130,000 covered workers, four underfunded pension plans, bankruptcy court proceedings and negotiations with unions and a government agency.
That could be frightening for the more than 18 million private sector workers who still are covered by a traditional defined benefit pension plan, even if it isn't American's.
What can you expect if your own employer's plan were to be terminated or frozen? Here's a Q&A on the pension issues raised by the American Airlines bankruptcy.
Q: What's happening at American?
The airline, a unit of AMR Corp, proposes to terminate its four underfunded pension plans as part of its bankruptcy proceedings, replacing them with a 401(k) offering. The pension plans' assets and liabilities would be transferred to the Pension Benefit Guarantee Corp (PBGC), the government-sponsored agency that insures most private sector defined benefit pensions.
The plans, which cover pilots, flight attendants, agents and ground crews, have an estimated total of $8.3 billion in assets and $18.5 billion in liabilities. American told employees this week it expects 90 percent of its workers to receive full benefits.
The final outcome at American is far from certain. The PBGC is pushing back hard, pointing out that some airlines have come through bankruptcy without dumping their pension plans.
"A bankrupt company will do anything it can to cut costs, so it's no surprise American wants to dump their pension plans," says Josh Gotbaum, PBGC's director. "But that doesn't mean they need to do it."
Gotbaum points to special pension relief legislation in 2007 that permitted American to cut its contributions by $1 billion over the past four years.
Q: Is the traditional pension as we know it dying?
A: No, but it is hospitalized and on life support. The percentage of Fortune 1000 companies sponsoring an actively accruing pension plan has been dropping sharply for years. The portion in 2011 was 35 percent, down from 59 percent in 2004, according to Towers Watson.
Pension funding levels are declining. The aggregate funding level of corporate pension plans at S&P 1500 companies stood at 78 percent at the end of January, down from 84 percent a year earlier, according to Mercer. The drop stemmed mainly from recent reforms requiring more conservative forecasts of pension portfolio returns.
Q: How can I determine if my employer's plan is endangered?
A: The plan's funded status is one indicator, a number you can find in the funding notice that your employer must send to you annually under the law. Just as important, pay attention to what's going on in your industry. Since employers worry about providing competitive benefit packages, they're less likely to abandon a defined benefit pension plan if they're offered by competitors.
Q: What happens if my employer terminates or freezes my pension plan? And what's the difference?
A: When a pension plan is frozen, the employer continues to manage the plan and is obliged to pay out benefits at the level promised at the time of the freeze. But you won't accrue any further benefits, and new employees won't participate. When a plan terminates, the PBGC takes over the plan's assets and liabilities, as well as responsibility for paying benefits.
Q: Will the PBGC pay the full pension that I was promised by my employer?
A: Most workers will receive 100 percent of what they earned -- but again, only up to the point of the plan's termination. That can mean significant benefit losses in retirement, and it's especially damaging for older workers who are at their peak earning power, because they won't accrue benefit credits for their last working years. All workers become 100 percent vested at the point of termination and transfer to the PBGC.
Moreover, PBGC payouts are capped by law, and generally they won't amount to full coverage for the highest-earning workers like airline pilots. The cap is determined using a formula based on your age at the time the plan is terminated, and it is updated every calendar year. For 2012, the maximum monthly benefit for workers retiring at age 65 is $4,653.41, or $4,188.07 if you elect a joint and survivor option that pays benefits to a spouse.
If you participate in a multi-employer pension plan, guarantees are much lower due to differences in the insurance plan design and premium levels. Currently, it's set at $1,072 per month.
Q: How can I determine my specific situation?
A: Ask your employer for the latest annual statement of benefits, which will specify what you would receive at the plan's normal retirement age based on your work history to date with the company. That will allow you to determine how much of your benefit would be covered in the event of a PBGC takeover of the plan.
Q: Can I get a lump sum distribution if my plan is frozen or terminated?
A: No. If your plan is frozen or terminated, your only option will be a monthly payment. Also, lump sums are limited to half of owed benefits if a plan's assets fall below 80 percent of its obligation. Plans funded at less than 60 percent are prohibited from making any lump sum payouts.
Q: Are taxpayers on the hook when companies go bankrupt and turn over their plans to the PBGC?
A: No. The PBGC is owned by the government, but it's funded through insurance premiums paid by plan sponsors. The PBGC has a long-term $26 billion deficit due to an unprecedented run of plan failures during the recession, but it has plenty of cash to meet near-term obligations.
The PBGC has asked Congress for the flexibility to raise premiums to help close the deficit, so far without success. "If premiums aren't raised and the deficit keeps getting bigger, at some point we'd be faced with a choice," says Gotbaum. "We could stop paying benefits or ask Congress for taxpayer money to provide the benefits that have been promised."
Q: What can I do if my pension plan is in trouble?
A: Unfortunately, not much. Your plan's fate is in the hands of your employer, and possibly the PBGC or a bankruptcy court judge. And, you can be confident you'll receive 100 percent of what you've earned up to the point of termination, so long as your projected benefit is below the cap on the PBGC guarantee.
If you don't expect to be made whole even on that amount, and you're nearing retirement, you could do what some American Airlines pilots did -- hurry up and retire, and ask for your lump sum before your company defaults on its plan.
Beyond that, it's important to play good defense. Keep thorough records of your employment history and all correspondence, notices and documents relating to the retirement plan and your benefits. Read and save summary plan descriptions, and verify the accuracy of individual benefit statements that you receive. If you need help with that, contact one of the free actuarial counseling services available through the U.S. Administration on Aging's network of Pension Counseling and Information Projects. (http://www.pensionrights.org/counseling-projects)
Finally, consider boosting your retirement saving outside the workplace using a low-cost Roth or traditional IRA. Maximize your Social Security benefits by understanding the rules for early and normal retirement ages, as well as for spousal rules.