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October 31, 2004 |
RETIREMENT QUESTIONS
The last two Company proposals presented to AFA have caused some confusion regarding retirement and retiree medical benefits. This E-line will address the current situation.
The Company Proposal dated October 20, 2004 does NOT contain a “grandfather clause” that would allow those who retired before 1/1/05 to keep their retiree medical benefits. The Company proposal states:
Pre-65 Retiree Medical and Dental, For Employees Retired as of one day prior to the Effective Date of the 2004 AFA-US Airways Agreement. The 2004 AFA-US Airways Agreement will not waive any rights US Airways has under Section 1114 of the Bankruptcy Code to reduce retiree benefits for existing retirees as of the Effective Date.
In other words, this proposal makes it clear the Company is not offering any “retirement window” that would allow anyone to maintain or receive our current retiree medical benefits as they are seeking to reduce or eliminate those benefits in court.
This current Company proposal replaces the Company’s September 10, 2004 proposal that offered retiree medical benefits to those who retired prior to 1/1/05. US Airways filed for Bankruptcy Court protection on September 13, 2004 basically rendering the September 10, 2004 proposal moot. The Company has indicated in court they will seek to eliminate or reduce retiree medical benefits for existing retirees and those who retire prior to the signing of a new agreement.
Some members are under the false impression that if they retire prior to 1/1/05 they will be able to keep their retiree medical even if the Company is successful in eliminating or reducing the benefits in court. There is NO offer on the table from the Company that would provide for those benefits to continue if you retired prior to 1/1/05.
It seemed the Company was initially trying to induce people to retire with the hope of keeping their retiree medical benefits. It now appears the Company is trying to walk away from the “debt” they owe to our current and future retirees. AFA’s October 29, 2004 counter proposal included the following language to allow for the continuation of existing retiree medical for those who are retired and a “window” for active members to retire with benefits. The language is below:
Pre-65 Retiree Medical and Dental, For Flight Attendants Retired on or before Ninety (90) Days or Three Calendar Months, whichever is later, after the Effective Date of the May 1, 2000 Flight Attendant Agreement, as amended... The Company agrees that it will not, pursuant to Section 1114 of the Bankruptcy Code, eliminate or reduce the retiree medical benefits for Flight Attendants who retire under this provision.
AFA will continue to attempt to negotiate an agreement that would protect existing retiree’s medical benefits and allow active members a chance to retire and be” grandfathered” into the benefit.
The Company has recently reduced the retirement notification form 90 days to 45 days. This has led some to believe there is still a “retirement window”. I am not sure why the change was made but it is immaterial.
IT IS IMPORTANT TO REMEMBER HOWEVER THAT FOR NOW, NO MEMBER CAN EXPECT ANY GUARANTEE
OF KEEPING THEIR RETIREE MEDICAL BENEFITS BY RETIRING BEFORE 1/1/05. IT IS ALSO IMPORTANT TO REALIZE THAT UNTIL A T/A IS RATIFIED PROPOSALS ARE NOT BINDING.
Thank you,
Mike Flores
LEC President Council 89
AFA-CWA AFL-CIO
704-527-0325 OFFICE
704-576-3174 CELL
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