Airline crisis might force pilots to delay retirement

Move could help relieve pressure on pension funds

February 07, 2005|By NEW YORK TIMES NEWS SERVICE

WASHINGTON - The airline industry's financial crisis and the collapse of some pension plans are leading the nation's biggest pilots union and some aviation experts to question a federal rule requiring that airline pilots retire at the age of 60.

Letting pilots work a few years longer would give those who are suddenly facing reduced pensions more time to save money, and could reduce the funds' expenses by cutting the number of pensioners, advocates say. For some airlines, it could also trim operating costs by reducing the need to train new pilots, although not all airlines would see benefits and some might see additional costs, experts say.

Some pilots see the idea of another few years of work as appealing and are arguing that it would be good for the industry, too. Graham W. Jones III, a 59-year-old captain who flies Boeing 747s for United Airlines, said the influx of retiring pilots will strain the finances of the government's Pension Guarantee Benefit Corp., which is poised to take over United's pension plan. The corporation has taken over US Airways' pension plan.

When his company's plan was healthy, Jones was expecting a pension of nearly $9,000 a month and a lump-sum payment of $250,000; now he is expecting no lump sum and a monthly benefit of about $2,500, he said.

The effect of extending pilots' retirement age on the pension funds would depend on how the extra years were treated. If their pension benefits continued to increase by 2 percent or 3 percent for every year worked, the funds would not be helped, according to experts.

But at a time when pilots are accepting pay cuts, advocates say that the airlines and the pilots might strike a deal to freeze benefits and let pilots earn money for a few more years.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.