[Congressional Record Volume 149, Number 117 (Friday, August 1, 2003)]
[Senate]
[Pages S10918-S10919]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. AKAKA:
  S. 1569. A bill to amend title IV of the Employee Retirement Income 
Security

[[Page S10919]]

Act of 1974 to require the Pension Benefit Guaranty Corporation, in the 
case of airline pilots who are required by regulation to retire at age 
60, to compute the actuarial value of monthly benefits in the form of a 
life annuity commencing at age 60; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. AKAKA. Mr. President, I rise today to introduce the Pension 
Benefit Guaranty Corporation Pilots Equitable Treatment Act to ensure 
fair treatment of commerical airline pilot retirees. This bill will 
lower the age requirement to receive the maximum pension benefits 
allowed by Pension Benefit Guaranty Corporation (PBGC) to age 60 for 
pilots, who are mandated by the Federal Aviation Administration (FAA) 
to retire before age 65. With the airline industry experiencing severe 
financial distress, we need to enact this legislation to assist pilots 
whose companies have been or will be unable to continue their defined 
benefit pension plans. This bill will slightly alter Title IV of the 
Employee Retirement Income Security Act of 1974 to require the Pension 
Benefit Guaranty Corporation to take into account the fact that the 
pilots are required to retire at the age of 60 when calculating their 
benefits.
  The Pension Benefit Guaranty Corporation was established to ensure 
that workers with defined benefit pension plans are able to receive 
some protion of their retirement income in cases where the employer 
does not have enough money to pay for all of the benefits owed. After 
the employer proves to the PBGC that the business is financially unable 
to support the plan, the PBGC takes over the plan as a trustee and 
ensures that the current and future retirees receive their pension 
benefits within the legal limits. Four of the ten largest claims in 
PBGC's history have been for airline pension plans. Although airline 
employees account for only two percent of participants historically 
covered by PBGC, they have constituted approximately 17 percent of 
claims. For example, Eastern Airlines, Pan American, Trans World 
Airlines, and US Airways have terminated their pension plans and their 
retirees rely on the PBGC for their basic pension benefits.
  The FAA requires commercial aviation pilots to retire when they reach 
the age of 60. Pilots are therefore denied the maximum pension benefit 
administered by the PBGC because they are required to retire before the 
age of 65. Herein lies the problem. Mr. President, if pilots want to 
work beyond the age 60, they have to request a waiver from the FAA. It 
is my understanding that the FAA does not grant many of these waivers. 
Therefore, most of the pilots, if not all, do not receive the maximum 
pension guarantee because they are forced to retire at age 60.
  The maximum guaranteed pension at the age of 65 for plans that 
terminate in 2003 is $43,977.24. However, the maximum pension guarantee 
for a retiree is decreased if a participant retires at the age of 60 to 
$28,585.20. This significant reduction in benefits puts pilots in a 
difficult position. Their pensions have been reduced significantly and 
they are prohibited from reentering their profession due to the 
mandatory retirement age. They are unable to go back to their former 
jobs.
  It is my sincere hope that existing airlines are able to maintain 
their pension programs and that the change this bill makes will not be 
needed for any additional airline pension programs. However, due to the 
difficult financial conditions of many or the airlines, I feel that we 
must enact this protective measure. My legislation ensures that pilots 
are able to obtain the maximum PBGC benefit without being unfairly 
penalized for having to retire at 60, if their pension plan is 
terminated.
  I urge my colleagues to support this bill. I ask unanimous consent 
that the text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Pension Benefit Guaranty 
     Corporation Pilots Equitable Treatment Act''.

     SEC. 2. AGE REQUIREMENT FOR EMPLOYEES.

       (a) Single-Employer Plan Benefits Guaranteed.--Section 
     4022(b) of the Employee Retirement Income Security Act of 
     1974 (29 U.S.C. 1322(b)) is amended in the flush matter 
     following paragraph (3), by adding at the end the following: 
     ``If, at the time of termination of a plan under this title, 
     regulations prescribed by the Federal Aviation Administration 
     require an individual to separate from service as a 
     commercial airline pilot after attaining any age before age 
     65, paragraph (3) shall be applied to an individual who is a 
     participant in the plan by reason of such service by 
     substituting such age for age 65.''.
       (b) Multiemployer Plan Benefits Guaranteed.--Section 
     4022B(a) of the Employee Retirement Income Security Act of 
     1974 (29 U.S.C. 1322b(a)) is amended by adding at the end the 
     following: ``If, at the time of termination of a plan under 
     this title, regulations prescribed by the Federal Aviation 
     Administration require an individual to separate from service 
     as a commercial airline pilot after attaining any age before 
     age 65, this subsection shall be applied to an individual who 
     is a participant in the plan by reason of such service by 
     substituting such age for age 65.''.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by this Act shall apply to benefits 
     payable on or after the date of enactment of this Act.
                                 ______