Westjet Lobbies Against Ac Pension Extension


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http://www.theglobea...article6521149/

WestJet Airlines Ltd. is concerned about special treatment for its main competitor, Air Canada, which is seeking leniency over a gaping pension fund deficit, and records show that WestJet launched a concerted lobbying campaign with the federal government over pensions.

Executives from WestJet, the country’s second-largest airline, held a series of meetings on pension issues on Nov. 20-21 with four members of cabinet, including Finance Minister Jim Flaherty, who is in charge of the Air Canada pension file. WestJet executives also met with numerous senior officials as well as lawmakers from the governing Conservative Party

Edited by dagger
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You are entitled to your opinion but it is clear that you don't have a clue what you are talking about regarding AC's pension plan. Firstly, AC 's pensions are not virtual money, in fact, on a going

This is a stupid argument because it cherry picks only one side of what AC's relationship with the feds, whether it was putting planes into markets it didn't want, or having to have ticket offices in

I propose that AC employees lobby the Fed gov't to have Westjet brought under the auspices of the ACPPA, and rename the act the "National Airlines Act" and ensure that WJ has to abide by the same or s

Is there more information available regarding Westjet's "concerted lobbying campaign"? Westjet doesn't have pension plans, do they? So what is WJ's goal in seeking to pressure the government and what is WJ's definition and what is their view of "special treatment"? Is the argument as simple as, "reduced obligations to pension plans provides more money for operations (and, - breath-drawn-in-sharply - ....competition)? What am I missing?

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I presume Westjet also believes that the Air Canada Public Participation Act should be abolished. And that Westjet should start a Defined Benefit pension plan for all full time employees. Good on Gregg for that.

Edited by dagger
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I presume Westjet also believes that the Air Canada Public Participation Act should be abolished.

Naturally. Because they are so concerned about "special treatment". I hope the executives found time to include that item on the agenda as they made the rounds in Ottawa.

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Pension plan or employee share purchase. Same thing in my books, both a type of pension. WestJet pays 20% of salary up front as long as the employee signs into it with their 20% for one year in stock. Dollar cost averaging. What is the employee percentage contribution to Air Canada's DB pension? Maybe Gregg is looking out for his brother.

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AC starts another airline, buys new aircraft, pays handsome salaries to their current execs, but doesn't want to pay the actual bills for running their business? If CCAA were to come again then WestJet has to compete against AC not paying 'all' of their bills (again). Must be nice. Who is lobbying for the advantage here?

Edited by Spinnaker
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AC starts another airline, buys new aircraft, pays handsome salaries to their current execs, but doesn't want to pay the actual bills for running their business? If CCAA were to come again then WestJet has to compete against AC not paying 'all' of their bills (again). Must be nice. Who is lobbying for the advantage here?

Maybe stop drinking the koolaid and do a little research on DB pension funding.

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Maybe stop drinking the koolaid and do a little research on DB pension funding.

Glug, glug, glug. I don't think I mentioned anything about DB, DC or compared an employe share purchase plan to a pension. I will point out the critical difference in my opinion. The AC pension is 'virtual money', not really there for you at the moment. The WestJet ESP is real money. I'd be happy with the security of a pension too... but only if my employer actually paid it. So is AC lobbying for an advantage by not paying their bills, or is WestJet lobbying for fair playing field -while you get the side benefit to actually seeing your retirement protected?

I guess that question is another for personal perspective.

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This subject clearly defines the difference between WJ and AC employees. I, like a lot of my WJ brethren has taken the 20% over the years and invested it for my retirement. If WJ decided one day that they aren't going to pay their part then I think there would be some really, really angry people. One for sure. I will live and die on my own retirement advice, AC folks don't have that option.

Doesn't it bother you guys that maybe, just maybe your pension won't be there and your employer is lobbying to NOT pay their portion?

I agree with this stand, AC took their bondholders, shareholders and employees to the barber 9 years ago and it looks like they're lining up to do it again.

Fool me once...

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Wow indeed!

The Spin Doctors at WJ headquarters are working overtime these days...is the old "cost advatage" that WJ holds really shrinking that much that you guys and gals have to worried about AC DB funding issues????

The fact that every other Federal DB plan holder has been lobbying the Feds on this issue doesn't speak to the real issue, does it?

Maybe WJ and their employees should go back to sharpening their pencils and not be worried about AC's pension plans..

BTW, the false empathy and concern for AC employees over the status of their pension funds is a little much...it's clear that the talking points are being distributed by the VP of propaganda...

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I come back to the essential point: Canadian commercial aviation is not a level playing field to begin with. It is tilted already in the favor of every airline not named Air Canada, because the latter is the only airline subject to unique disabilities under an act that bears its name. Nor is it level when the largest airport in Canada, used disproportionately by Air Canada, is subject to a different rent formula than all the other large airports in Canada.

So to Westjet. Stop whining about being disadvantaged competitively. You're not. Period.

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"Whatever Don."

Jeez Thor, are we not permitted to comment without a sarcastic "whatever"...?

I don't post shots across the bow here and so I would have thought you'd consider why I would say something like that.

For the record, I'm not being unkind or even critical - it's just that there is simply no comparison in financial and legal structure alone, between a DB Pension Plan and an Employee Share Purchase Plan and to claim otherwise is incorrect. It has nothing to do with how successful each plan is but they're not the same and I would have thought the difference obvious.

Don

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Hi Don

I think you hit upon an interesting point.

It has been a long term policy of indoctrination that has led to people believing that investing is better than a pension system.

With it being inherantly more profitable for the banksters, they are jumping with joy at the fruits of their labour.

This is all going to bite society in the collective a$$ when in the coming years it becomes apparent that most people won't have enough to survive on after retirement.

Especially when the majority of the work force becomes, 1080's. (The new term for those hired at min wage at AC)

Iceman

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Dear Greg

All sounds a little petty on the part of WJ unless,,,,,,,,,,,,,,,,,,,,,

WJ is concerned that my DB plan from AC is truly at risk and they want to make sure it remains funded regardless of the 2014 cliff that is fast approaching.

Maybe after you ensure the AC does not get a moratorium you can then lobby for interest rates to go up on government bonds. All we need is about 2%.

Next on my wish list would be getting that damn old ACPPA fed into the big shredder in Ottawa. Then we too could offer 7 Up in English only.

We may even join you for a maintenance jamboree at the MRO of you choice. As long as it in not located in Winnipeg, Mississauga, or Montreal.

Thank for your help Greg

Keep my cheques coming

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It is interesting that the current pension "problems" are precipitating such a benign response from the plan members. Simply put, the majority of pension plans have been legal ponzi schemes with little or no checks and balances and been allowed to be plundered by the corporations that negotiated these instruments in the first place. No union forced any employer to defer wages to a later date and the formulas are changed on a quid pro quo basis. Pensions are a negotiated item. One of the benefits to the employer was they could use the deferred wages to fund on going operations and in many cases, fund the start up of ancillary operations which we have seen in many cases, later sold off and the funds directly distributed to the shareholders without concern for the on going liability of the pension plan that essentially funded the initial investment. Further plundering has occurred using complex formulas and actuarial assumptions that that allowed for contribution holidays for the employer yet failed to acknowledge the possibility of a protracted low interest regime for example

The current crisis is mainly the concern for windup evaluation of these gargantuan plans. On an on-going basis most are not in as nearly a precarious position and a simple bump in interest rates to historical levels would nearly satisfy the windup shortfalls. So whilst in this environment it is clearly advantageous to try to get someone else to cover the employer's obligation. In the future we may see higher interest rates return ( the actuarial measure for determining pension plan health) and I suspect the contribution holidays will be once again enjoyed by the employers. Interesting side note, the contributions are tax deductions within the pension plans, as are employee contributions, but if the plan is deemed in surplus as was the Air Canada plans just a few years ago, the employee contributions continue but the employer contributions are disallowed, of course the employer could have set aside the contributions but this would be after tax money in this case.

As for defined contribution vice defined benefit or for that matter ESPs, the single largest difference that seems to be missed is the defined contribution and ESP never shows surplus or deficit to a goal, it merely reflects a current value. A defined benefit and its current state of funding reflects the situation relative to a defined goal. There are many winners and losers in the investment game, are all the defined contribution plans winning or are many just looking at the large sum and not the likely result of a small change in financials (interest rates, inflation, etc)?

A defined contribution plan let's you be the master of your own fate and I am sure a few are totally in control and have the knowledge to understand the situation, I speculate that many are simply awed by the sum but are not aware of what it really means in the long term.

There will be some big winners in the equity markets ... good luck, and smart investing can produce good results, usually.

Joe

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Joe;

"...the single largest difference that seems to be missed is the defined contribution and ESP never shows surplus or deficit to a goal, it merely reflects a current value. A defined benefit and its current state of funding reflects the situation relative to a defined goal."

By structural definition, neither DCs nor ESPs are "goal-oriented" - QED. That, of course, is their chief problem. Retirement planning and capability has been downloaded onto individual employees who must either become expert individual investors or band together in some form to ensure viability of their pool of money by insuring against the wildest swings by amassing large sums in exchange for a slightly smaller stipend when it comes to retiring. The alternative, and I think it is a highly-probable widespread one, is, most people in charge of their own retirement will be unable or at least find it "challenging", to retire because the money won't be there. I say this because, while I know some very sharp savvy people who seem to be naturals, there are very few among us wage-earners who are true, disciplined experts at money-managing. And ESP Plans I believe rely upon increasing share price or stock splits. Those at Apple did well.

The future problems for those without the funds to retire and for western governments and their taxpayers, are obvious. For this reason, I think once interest rates rise accompanied by pension solubility, DB plans will once again be sought as retirement vehicles. I think the risks associate with DC and ESP plans outweigh the benefits of portability and self-management aspects on a broad basis.

"A defined contribution plan let's you be the master of your own fate and I am sure a few are totally in control and have the knowledge to understand the situation, I speculate that many are simply awed by the sum but are not aware of what it really means in the long term."

Yes - that would apply equally to ESP Plans.

"Simply put, the majority of pension plans have been legal ponzi schemes with little or no checks and balances and been allowed to be plundered by the corporations that negotiated these instruments in the first place."

In the U.S., pension plans could be (and were/are) legally plundered (as our airline brethren down south can tell us here in Canada), and as such are ponzi schemes for senior management and an attractive reason for private corporations to enter Ch.11.

In Canada, while there may be clever, quasi-legal workarounds, DB pensions are protected by law up to a certain amount.

Edited by Don Hudson
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