ALPA urges Congress to protect individual retirement savings

ALPA sent a letter today to the House and Senate today supporting a resolution to protect individual retirement savings in the midst of the fiscal cliff debate.  The “Fiscal Cliff” refers to the combination of tax hikes and budget cuts that will take place on January 1, 2013, if Congress does not act.

In a search for revenue to avoid going over the cliff, lawmakers are considering lowering the amount workers can contribute to defined benefit retirement plans such as 401(k)’s and IRA’s.  ALPA strongly opposes these proposals.  In the past decade, many airlines having received bankruptcy protection, terminated defined benefit plans, costing pilots more than $5.5 billion in earned benefits and countless amounts in future expected benefit accruals. Pilots at these same airlines took major pay cuts, were stripped of retiree medical provisions in their working agreements and had their careers significantly thrown off course. For nearly all ALPA pilots today, a 401(k) type defined contribution plan is their primary employer-sponsored retirement plan and pilots are required by law to retire at age 65, regardless of their financial situation.

In addition, applying more restrictive limitations to one’s ability to provide a meaningful income replacement at retirement does not produce long-term savings for the federal government; it is just a short-term budget gimmick that will have long-term negative consequences for retirees.  That is because while retirement plan contributions are tax deferred at the outset, everyone must pay taxes on their retirement savings when they are paid out in retirement.

Click to read the letter to the House and Senate

This entry was posted in Sequestration and tagged , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s