[Congressional Record Volume 153, Number 71 (Wednesday, May 2, 2007)]
[Extensions of Remarks]
[Page E929]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             INTRODUCING THE PILOTS EQUITABLE TREATMENT ACT

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                           HON. GEORGE MILLER

                             of california

                    in the house of representatives

                         Wednesday, May 2, 2007

  Mr. GEORGE MILLER  of California. Madam Speaker, today I am proud to 
introduce the Pilots Equitable Treatment Act, legislation that would 
prevent deep, unfair cuts in pilots' retirement benefits.
  Over thirty years ago, Congress established the Pension Benefit 
Guaranty Corporation to insure the pension benefits of American 
workers. When employers terminate their workers' traditional pension 
plans, the PBGC takes the plans over and makes monthly payments to plan 
participants who are retired.
  When the PBGC takes over a company's pension plan, the plan 
participants do not always receive the same benefit they would have 
received if their plan had not terminated. For example, workers who 
retire before age 65--which the law considers ``normal'' retirement 
age--receive reduced benefits to reflect the longer period that these 
retirees likely will receive benefits.
  This is bad news for pilots. Under Federal Aviation Administration 
rules, airline pilots are required to retire at age 60. As a result, 
pilots whose pension plan has been terminated--like the pilots at 
United Airlines and US Airways--wind up taking drastic cuts to their 
pension benefits because the PBGC treats age 60 as an early retirement 
age and cuts pilots guaranteed benefits as a result.
  The federal government is responsible for trapping pilots in this 
double-bind. The PBGC and the FAA are both federal agencies, but 
because their rules don't align, pilots are forced to pay the price. 
Pilots earn every dime of their pension benefits and they don't choose 
to retire at age 60. The time to fix this problem is today.
  The Pilots Equitable Treatment Act would put airline pilots on equal 
ground with other workers by requiring the PBGC to treat age 60 as the 
normal retirement age for pilots--not as an early retirement age. In 
other words, pilots would receive the maximum PBGC benefit for which 
they would be eligible if they worked until age 65. If they worked 
until the age of 57, it would be as if they worked until age 62 and the 
pilot would receive the appropriate PGGC benefit.
  In a 2005 e-hearing Tom Gardiner, of Bainbridge Island, WA, facing 
the loss of his retirement nest egg at United Airlines, explained the 
conundrum facing pilots--
  ``My name is Tom Gardiner and I am a Captain for United Airlines with 
a total of 27 years of service. . . . If the PBGC takes over the 
pilots' defined benefit plan, I will lose at least \2/3\ of my promised 
pension. . . .
  [One factor] contributing to this huge hit is the adjustment for 
``early retirement'' mandated by PBGC rules. Of course, I have no 
choice in the matter; the FAA regulations require me to retire at age 
60. The PBGC considers that to be ``early'' and takes away 35 percent 
of what I would otherwise receive from them. It is a classic ``Catch 
22.22 . . .''
  Captain Gardiner is not alone. The Pilots Equitable Treatment Act 
would be a first step to restoring some measure of fairness to these 
hardworking Americans who have seen promised and hard-earned benefits 
disappear overnight.

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