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MEMORANDUM ON RETIREMENT SYSTEMS FOR AIRLINE PILOTS
December 16, 1947

The problem

1
In April 1947, there were 6014 active pilots on the scheduled air lines. Only one of these was older than 60; 12 others were between 55 and 60; and 53 were between 50 and 55. In other words, on the basis of the present situation, nine out of every ten pilots will be out of service at 50, and 98 out of every 100 will have ceased to fly by the time he is 55. Some will have been disqualified by the time they reach 35. The physical and mental alertness standards fixed for American air line pilots are the highest for any occupational group in the world.

2
Experience shows that the short working life of pilots constitutes a problem both for the air lines and for the pilots themselves. A pilot who waits until he is disqualified will have an unusually hard time in getting another job. Therefore, he will leave piloting, as the opportunity presents, years ahead of when he should in the hope that, by taking a new job in another line, even at a substantial sacrifice, he will be able to work until his normal retirement age. After investing many thousands of dollars in the training of pilots, the airlines get less service than they should out of the pilots because they quit before the end of normal flying life. Air lines used to be able to keep men in service by arranging to have them take other jobs when they could no longer fly. This is no longer possible. Thus, the length of flying life, which is short enough to begin with, is abnormally foreshortened.

Present pension plans

3
Five air line companies now maintain pension plans: United, Pan American, American, Braniff, and Eastern. The normal retirement age under these plans is 60 and no annuities are available before 50. Between 50 and 60, annuities are reduced to the actuarial equivalent of the annuities payable at 60. At 50, for example, a pilot will get, at the present time, a little less than half of the annuity credit earned up to that date. The annuities actually payable at 50 are not more than 20 percent