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Captain Robert A. Stone - 5
September 14, 1948

about 27; in the case of a United pilot, he is eligible for the plan after one year of service. Suppose the pilot's pay is $4,200 for the first year and, while a member of the United plan, runs as follows:

[[two columned table]]
| --- | --- |
| Age 28 | $450 per month |
| 29 | 550 per month |
| 30 | 650 per month |
| 31 | 700 per month |
| 32 | 750 per month |
| 33 | 850 per month |
| 34 | 950 per month |
| 35 and thereafter | 1000 per month |

Suppose this pilot is disqualified at 50 and retires. He will have contributed to the United plan a total of $18,522. At present John Hancock rates (John Hancock and Connecticut General are the underwriters, and I am assuming that the group annuity rates of the former are applicable) the total employer contribution would be $20,758.53. The pilot's annuity at 50 would be $202.91. 

Under the proposed ALPA plan the contributions to 50 would be $37,665 and the annuity would be $200 per month. If the United contributions, age and rate of salary change being the same, had been $37,665, the United annuity would be $194.57. However, the ALPA cost figures are based on the assumption that about one in five of the present pilots will be disqualified before 50, whereas the United plan makes no annuity payments whatever before 50. 

These comparisons are not completely on all fours in other respects: The insurance companies may pay dividends. (Connecticut General, I believe, has never paid any on group annuities. The Hancock group annuity dividends were 0.033 per cent of average group annuity reserves in 1945; 0.073 per cent in 1946 and 0.087 per cent in 1947, of which I hazard the guess that none went to United.) The death benefits are difficult to compare. But, in any event, the statement that "commercial plans" would pay more is contrary to fact. 

(3) Once an anuity has been granted to a pilot--and an annuity will not be granted so long as he is working for an air line in any capacity--there is no limitation on a pilot's engaging in employment. He may work whenever, wherever and for whomever he pleases. If a pilot who has been disqualified and is getting an annuity is permitted by both CAA and his employer to return to flying while still under 60, the disqualification having been completely removed, the annuity will cease unless it be changed to one on a reduced basis. But so long as the disqualification is not removed by both his employer and CAA, and so long as he does not work for an air line in some non-pilot capacity, there will be no limitation on the pilot's right to receive an annuity.