Now, I am sure
there are more in our group that gets the annual report than just Thad and
myself, and I have to believe that many of you read it and also noticed the
incredibly plummet in monies held in Trust.
This had to raise an eyebrow or two and it is what prompted Thad to
write me.
Good day Mark,
Yesterday I received the Summary Annual Report
for our Delta Pilots Disability and
Survivorship Plan, posted bulk mail by the way, and noted a decrease of over
$179,000,000. I’m looking for someone a lot smarter than me to give
me some thoughts about this profound decrease and the implications. I think I
know the impact it will have but just need a primer on how this decrease could
occur and if Delta will be required to boost their commitment going forward.
Any help would be greatly appreciated…
Regards,
Thad Quarles
Editor: Thad, yes
I think a lot of our guys will notice that decrease which looks potentially
like a threat to our survivors. Well, with ALPA’s blessing the company
has made a decision to move forward with meeting their obligations to the
disabled and survivors BUT not pay them from a trust ‘reservoir.’ Instead
they have been authorized to make these payments ‘through the Trust’ by
transferring current revenues to cover
obligations. So the Trust becomes more like a ‘checking account’
rather than like a ‘savings account.’ Does that mean this is a good change?
Of course time will tell, but I personally am not a fan, because I can see a
day when revenues get so pinched that these promised payments would fall to a
low priority.
BUT I will also say
that the “experts” from our group (much smarter than I) have been on top of
this and have expressed that as long as monitored then this may end up being
okay. While the company states a commitment to disabled and survivors, to
me this action would appear to make it far too easy to later change course and become
delinquent, curtail benefits, or to walk away altogether. It appears to me that
far too much security of the new payout plan depends on ‘integrity’ over
regulatory oversight. As to the draw
down of the Trust; in the year 2021 there was nearly a half of billion balance,
in 2023 the ending balance of net assets was $260 million, and as of this year
it is drawn down in value
of Plan assets to $21,796,092.
That’s
a decrease of $179,936,526 of plan assets in the Trust account this year.
INVITATION to any of our PCN members who are well versed
on the trust and on this new benefit payment plan to send in to the PCN their take with their FL330 view of the financial
report. For any of you that write in, I
will publish your thoughts in the next High Life.
Mark
++++++++++++++++++++++++++++++
IMPORTANT SURVIVOR information in many former
HL issues but INSURANCE section of High Life 340 and FINANCE section of 336 a
good resource to keep.
CORRECTION to language I used in HL 350 for
the D & S Plan TRUST
All Archived High Lifes issues: https://drive.google.com/drive/folders/0BzB_SBDmSd9AMzViODQ3MDQtODhjYy00YzkwLThiMzktM2FhMDEzMDZhYjA0?resourcekey=0-sovghKhA1zNRWP5SUxjUqA&usp=sharing
I
previously used the word ‘unfunding’ or ‘defunding’ the Trust but I believe that is in error and
can cause unnecessary misunderstanding. The Company is not defunding the Trust but
rather funding it ‘monthly’ as opposed to carrying a long term balance. There IS a tax advantage for both Company and
Beneficiary from the Section 501(c)(9) nature of the Trust so, one would expect
to see the Company continue to keep the Trust even though the funding is not executed
well in advance.
+++++++++++++++++++++++++++++++++++++++++++++++
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