[Congressional Record Volume 151, Number 33 (Thursday, March 17, 2005)]
[Senate]
[Page S3066]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. AKAKA:
  S. 685. A bill to amend title IV of the Employee Retirement Income 
Security 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, last year, the Pension Benefit Guaranty 
Corporation, PBGC, announced that it was moving to assume 
responsibility for the pensions of more than 14,000 active and retired 
pilots at United Airlines. Today, the Air Line Pilots Association, 
which represents 6,400 active United pilots, is trying to negotiate an 
alternative to such a takeover.
  Mr. President, one of the reasons I am here today talking about 
United's pilots is that they are at risk of losing a significant amount 
of their pension, not just because the PBGC may be taking over their 
pension, but because of the age that they are mandated to retire. While 
I believe that Congress needs to address the issue of underfunded 
pension plans, I believe that it is also important for us to address an 
inequity with airline pilots that are mandated to retire at age 60.
  The bill that I introduced in the 108th Congress, and am 
reintroducing today, will ensure the fair treatment of commercial 
airline pilot retirees. The Pension Benefit Guaranty Corporation Pilots 
Equitable Treatment Act will lower the age requirement to receive the 
maximum pension benefits allowed by Pension Benefit Guaranty 
Corporation to age 60 for pilots, who are mandated by the Federal 
Aviation Administration, FAA, to retire before age 65.
  Again, 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. My bill will slightly alter Title IV ofthe Employee 
Retirement Income Security Act of 1974 to require the Pension Benefit 
Guaranty Corporation to take into account the fact that 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 portion 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 the 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, 
and I have even heard from some pilots that the FAA has never granted 
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 to $28,585.20 if a participant retires at 
the age of 60. This significant reduction in benefits puts pilots in a 
difficult position. With drastically reduced pensions and a prohibition 
on reentering the piloting profession because of age, many pilots are 
subjected to undue hardship. While it is my sincere hope that existing 
airlines will be able to maintain their pension programs and that the 
change this bill makes will not be needed for any additional airline 
pension programs, I believe that my legislation is necessary to ensure 
that, at the minimum, airline pilots are not unfairly penalized for 
their employer's ability to maintain a pension plan. My legislation 
ensures that pilots can 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 that the text of my 
bill be printed in the Record.
  Mr. President, 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:

                                 S. 685

       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.

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