Union employees of US Airways have approved new labor agreements that secure increased annual contributions to the IAM National Pension Fund, the multiemployer pension fund for the International Association of Machinists and Aerospace Workers.
Three classifications of workers negotiated wage increases. One classification — the fleet service workers — will see an increased contribution rate of $0.10/hour for full and part time union members, effective immediately.
The IAM National Pension Fund is the fifth largest multi-employer pension fund in the country, with about $10.7 billion in assets covering over 90,000 retirees and beneficiaries. The fund has more than 100,000 active participants.
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US Airways merged with American Airlines at the end of last year to form American Airlines Group Inc. The recent contract approvals affect pre-merger US Airways employees.
James Carlson, a representative with the IAMAW, told Benefitspro.com the new contracts will give US Airway's pre-merger employees a stronger bargaining position when labor agreements are negotiated in conjunction with members of the Transport Workers Union, which represents American's employees.
"The defined benefit pension plan is going to be a subject of bargaining in the second step of these negotiations," Carlson said. "We're better situated for the next round of negotiations with the 'New American' airlines. The foundation is stronger."
Carlson said no hard date is set for what will be the TWU-IAM labor alliance's first round of joint negotiations. The alliance was formed after last year's merger and will bring members of both unions under joint contracts. The defined benefits of more than 30,000 workers will be affected.
In a statement, Sito Pantoja, IAM's general vice president, thanked members for their patience and said, "we are now well situated to begin joint contract talks with our TWU sisters and brothers to achieve the best contracts in the airline industry at the world's largest airline."
In it's most recent disclosure to beneficiaries, the IAM National Pension Fund trustees reported a funding level of 104.2 percent.
American's former parent company, AMR, filed for bankruptcy in November of 2011. It sponsored four defined benefit pension plans covering 130,00 workers and retirees.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
