Will Buergey, the former union chairman who is appealing termination, believes most retirees' incomes will be much lower than Delta's estimates.
"My income is substantially lower than $50,000 now," said Buergey, 58, who made more than $300,000 a year before he retired in 2004, just before the first of two deep pay cuts.
Delta says it had to shed the pilots' pension plan to be able to get financing for its planned emergence from bankruptcy next year. Shedding the plan and letting the PBGC take over limited payouts enables Delta to avoid about $2.5 billion in payments needed to bring that plan to full funding.
"Termination of the pension plan is among the most difficult decisions Delta has had to make in connection with our restructuring process, and we truly regret the impact this has had on you," Delta said in a letter late last month to almost 6,000 retired pilots.
The PBGC caps payouts at $31,000 or less per year for people who retired at 60, the mandatory retirement age for airline pilots. Delta is the third major airline to dump all or part of its pension obligations as part of a recent Chapter 11 reorganization, after US Airways and United.
But Northwest Airlines, which filed for Chapter 11 protection on the same day as Delta, has not moved to shed its employees' pensions.
The PBGC hasn't yet taken over Delta's pilot plan, but the airline was required to recalibrate payouts as if it had.
Delta angered some retirees by warning that it could take the PBGC "several years" to review the airline's estimates, and to send any questions to the airline in writing.
"Due to the complexity of the calculations, the Employee Service Center will not be staffed to answer questions regarding these calculations," Delta's letter stated.
Cochran hoped to have enough of a monthly benefit left to cover his family's health insurance premiums. He said he's worried about insurance in the future, because his 57-year-old wife, Susan, has diabetes. Adding to the pain of the pension cuts, Delta last week reached agreements with court-appointed retiree creditor groups that will significantly boost almost all retirees' health insurance premiums, pilot and nonpilot alike.
"I can't go [to a new insurer] because of Susan being a Type 1 diabetic. They won't take her," said Cochran.
Still, he is philosophical about Delta's pension-cutting moves. "It will certainly make my income tax a lot easier to figure," he joked. He said he long thought the pension plan termination was inevitable.
"I don't blame Delta. They're trying to survive," he said. "I just knew this was going to be a dead-end battle, which is why I retired."
Cochran said he flew extra trips before retiring, boosting his income to $240,000 a year. The couple paid off their house and cars, and his wife later went back to work.
He said their expenses are less than $10,000 a year now, and they banked nearly $1.7 million when he retired two years ago, including savings from his Delta wages and the $1.2 million pension lump sum.
"I plan to live conservatively and keep our costs down and wait for the dust to settle," he said.
Lewis also retired four years earlier than he had planned, in order to save his lump sum pension benefit, also $1.2 million.
At that time, in late 2004, Delta had just averted a bankruptcy filing, and waves of pilots were retiring. He didn't believe the carrier's pension plan could long continue to pay out lump sums.
"It was just too big a risk," said Lewis. "I felt like I had to do it for my family, even though I wanted to stay and fly."
As he suspected, several months later, the pension plan halted paying out lump sums. More than 2,300 pilots had retired since 2003, draining plan assets.
Lewis initially got a $6,500-a-month pension to support himself, his wife and daughter while he launched a boat appraisal business. But Delta moved quickly to cut pension expenses, winning court approval to stop paying the portion of retired pilots' and executives' pensions that exceeded federal income limits on traditional pensions.
That move caused Lewis' pension checks to drop to $1,700 a month, he said.
The airline will ask a bankruptcy judge today to let it drop the plan. But critics will weigh in.
Delta Air Lines Inc. is defending itself against objections filed by retired pilots to the company's bankruptcy court request to terminate its pilot pension plan.
The plan, for now, stayed in place, as the hearing was set to continue on Tuesday and Wednesday after Labor Day.
The pension plan for Delta Air Lines' pilots probably will be terminated before October to avoid more cash drains from pilot retirements, said an actuary for Delta Air Lines' pilots union.