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Wednesday, 21 November 1973
Page: 3662


Mr Morris (SHORTLAND, NEW SOUTH WALES) asked the Minister for Civil Aviation the following question, upon notice:

(1)   What are the (a) guaranteed annual salaries and (b) average annual salaries of Australian domestic airline Captains and First Officers employed by Trans-Australia Airlines and Ansett Transport Industries on Boeing 727, DC9, F28 and F27 aircraft.

(2)   What are the respective contributions by the pilots and the airlines to the existing superanuation fund and what are the benefits to the pilots.

(3)   What are the respective contributions by the airlines and pilots to loss of licence insurance for pilots.

(4)   What are the details of the new superannuation claim by the Australian Federation of Airline Pilots and what would such a claim cost the airlines annually.

(5)   How many AFAP members are involved.

(6)   If the AFAP claim is granted would an increase in fares be necessary; if so, to what extent.


Mr Charles Jones - The answer to the honourable member's question is as follows:

 

(2)   Contribution by Pilot- 10 per cent of guaranteed annual salary until age 55.

Contribution by Airlines - 10 per cent until the completion of 22 years of service; thereafter 7½ per cent to age 55.

Benefits

Up to 10 years own contributions plus interest at 5 per cent. 10 years and up to the completion of 22 years benefits range from one times average salary over the last 5 years up to 4.95 times average salary over the last 5 years.

At the end of 22 years' service the benefit is funded and from then on this funded amount accrues compound interest at the rate of 5 per cent; in addition the Pilot's contributions and TAA's contributions after 22 years of service accrue compound interest at 5 per cent per annum and are added to the funded amount.

Examples of the lump sum benefits in the present scheme at age 55

B727 Captain: Commenced in 1946, retiring in 1976 at age 60 - $86,000 of which his own contributions amount to $13,000 plus interest.

Commenced in 1946, retiring in 1978 at age 60 - $103,000 of which his own contributions amount to $16,000 plus interest.

Commenced in 1946, retiring in 1980 at age 60 - $124,000 of which his own contributions amount to $20,000 plus interest.

Commenced in 1946, retiring in 1982 at age 60 - $148,000 of which his own contributions amount to $25,000 plus interest.

Pilots in TAA and ATI now have a retiring age of 60 and the lump sum mentioned above includes the additional interest on the lump sum between age 55 and 60.

Pilots in TAA and Ansett Airlines (excluding the ATI subsidiaries) under the present seniority system could be expected to proceed to 727 captaincy.

(3)   Airlines contribute $180 per annum towards Loss of Licence Insurance for Pilots. For this amount Pilots can purchase Loss of Licence Insurance for $36,000. Pilots need not contribute anything but under the scheme run by the AFAP they can contribute an additional amount, depending on age, to get an additional benefit.

The cost of Loss of Licence Insurance for all TAA and ATI Pilots is $218,700 per annum.

(4)   New claim by AFAP - pertinent details: Contributions by Pilot to be reduced from 10 per cent to7½ per cent after 10 years, with a further reduction from 7½ per cent to 5 per cent after 20 years.

Benefits

At 10 years of service 2.82 times salary increasing to 8.46 times salary at 30 years of service.

Death benefit - new clause

All Pilots shall be entitled to the sum of$100,000 in the event of death, whether on duty or not, and such amount to be additional to entitlement under the superannuation scheme and Workers' Compensation, where the latter is applicable. Where the interest rate is to apply for resignation or discharge other than benefits mentioned above, the interest rate is to be 7 per cent.

Cost to Airlines of claim

Estimate that for future serving Pilots the additional cost will be $1,000,000 per annum. In order to meet the cost in relation to all past service of existing Pilots the cost over a reasonable future period of, say, 10 or 15 years could well exceed $1,000,000 per annum. Therefore it is foreseeable that the claims could cost an additional $2,000,000 per annum. These figures relate only to TAA. The effect on ATI is unknown but the total annual cost would not be less than in TAA's case and probably greater as ATI employ more Pilots.

(5)   1,215 Pilots in TAA and ATI.

(6)   On present salaries it is estimated that present fare levels would need to be increased from1½ per cent to 2 per cent. However, this could increase and would depend on the future level of salaries for Pilots.







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