As a pilot for United Airlines, Bob McGowan was trained to handle emergencies, like the time he wrestled a 200,000-pound airliner safely to the ground in Chicago after its electrical system failed.
But nothing prepared him for the financial nightmare now threatening his retirement plans.
When McGowan's nearly 30-year career with United ended in 1996, he was looking forward to collecting a handsome pension -- generous enough to put his daughter through college, with plenty left over to take her on a tour of American landmarks such as Yellowstone National Park and Crater Lake.
That dream, along with those of every other retired United pilot, is now in limbo.
This month, a bankruptcy judge in Chicago approved United's request to dump its under-funded employee pension plans onto the Pension Benefit Guaranty Corp., a federal agency that picks up the retirement obligations of troubled companies. At $6.6 billion, it's the largest corporate pension default in the agency's 31-year history.
The agency's goal is to ensure that every retiree under its care gets a regular pension check. But there are tight limits on how much the agency will pay. Under a worst-case scenario, McGowan's $85,200-a-year pension could be slashed by 65%.
"As an airline pilot, you always want to be sure that you don't fly down a blind canyon," said the 69-year-old Villa Park resident. "You can't fly through it and you can't turn around. Once you're in, you're done.
"With your finances, you try to prevent that all of your life. This is a real stab in the back."
The ruling by U.S. Bankruptcy Court Judge Eugene Wedoff affected more than 121,500 active and retired United workers, including pilots, flight attendants, aircraft mechanics and baggage handlers.
The decision led to strike threats from several unions -- threats that still loom as the nation's second-largest airline faces a crucial Bankruptcy Court hearing Tuesday on its request to terminate its contract with the union representing its baggage handlers and customer service agents.
Under the pension handover, lower-paid workers with smaller pensions will retain a higher proportion of their benefits. Retired United aircraft mechanics, for example, are expected to receive at least 80% of promised benefits, and most retired flight attendants who stayed on the job until age 65 will get 100%.
But United's 7,500 retired pilots, some of whom were making as much as $300,000 to $325,000 a year by the time they retired, are caught in what one called a classic Catch-22.
As a general rule, the agency caps annual pension benefits at $45,613 a year. That amount can be reduced even more for workers who take early retirement -- which airline pilots do because of a federal law that requires them to retire at age 60. As a result, United pilots expecting a pension of more than $100,000 a year could see their annual guaranteed payout reduced to as little as $29,649.
McGowan and other pilots contend that they were fully capable of flying beyond age 60. Dealing with workdays that can start with taking off in a blizzard and end with landing during a tropical storm tends to keep you sharp, the pilots argue.
"I never flunked a physical or a check ride," said John Rains, a 64-year-old retired United pilot who lives in Vermont. "There's not another job we can do that comes close to paying this much, so we are so careful about taking care of ourselves."
The situation is especially trying for pilots like McGowan, for whom flying was more of a calling than a career.
As a teenager, while many of his friends tinkered with hot rods, McGowan was hanging around a small general aviation airport in northeast Philadelphia. He soloed for the first time at age 15 in a single-engine Aeronca Champion. He had a commercial pilots' license three years later and flew charter gigs along the Eastern Seaboard.
By the mid-1960s, he was working as an air traffic controller and trying to get hired as a pilot by a major airline. He signed on with United in 1967.
Now, McGowan is wondering whether the years he spent in the cockpit will pay off as he expected.
"We didn't want to live lavishly. We just wanted to be comfortable and healthy," McGowan said. "We would like to take a driving trip this summer. Just pack up and take off. You start to look twice at stuff like that now."
As the airline industry struggled in recent years, some United pilots prepared for the worst. Rains, the former pilot who lives in Vermont, sold a 4,000-square-foot home in Annapolis, Md., and moved into a house less than half that size in a much less expensive area.
"We are going to be OK," Rains said of he and his wife. "But the main thing we agree on is that it is just not right."
To be sure, the pension losses United pilots are facing may be far less draconian than the worst-case scenario suggests.
