Top Brass Perks Gall Workers

Delta Execs Get Multi-Million Dollar Trusts, Workers' Pensions Are Cut

(CBS)  This is the eighth in a month-long series of reports called "Making Ends Meet" about how families are coping with the tough economy, unemployment and smaller retirement accounts.

---

For Chuck Starcher, a mechanic at Delta airlines, the bad news came in a letter, estimating just how much the airline plans to cut his pension every month: right off the top, the company is slashing $1,100.

As CBS News Correspondent Wyatt Andrews reports, he's not happy, because Delta is cutting the pensions of workers while guaranteeing full pensions for top executives. A year and a half ago, Delta quietly committed $65 million for executive pensions, including one for CEO Leo Mullin. The benefit is called an executive trust; Starcher calls it a raid.

"Where's he getting the cash to put into that pension plan he's going to have guaranteed?" asks Starcher. "It's definitely coming from us."

"They knew they were doing something sneaky," says Starcher's wife, Julie.

She's a flight attendant at American Airlines, where executive trusts led to the business embarrassment of the year.

CEO Donald Carty apologized and resigned when the trusts he helped create for the brass were announced the very day American Airlines employees gave up hundreds of millions in wage concessions.

"We are all pulling together for the good of the company and then you find out no, you're not," says Julie Starcher. "We're pulling and they are not."

Many companies now maintain pension trusts as an extra perk for executives, but Delta calls them a necessity.

The airline argues that the trusts, set up in the wake of the Sept. 11 terrorist attacks, gave incentive to the management team not to bolt a company that, at the time, was flying empty planes.

Delta's senior vice president Tom Slocum believes the trusts helped save the airline.

"The object of stability, of keeping the management team focused, of keeping the leadership in place has been met as we've accomplished a great deal," says Slocum.

Still, Mullin also offered his "sincere apology" for the trusts, admitting they now "no longer appear appropriate."

Does Slocum recognize that this looks like a bunch of executives sitting around thinking, "How do we get ours before the ship goes down?"

"I take just the opposite view," says Slocum. "I think this is a group of executives sitting around saying, 'How do we prevent the ship from going down.'"

Starcher agrees management did keep Delta afloat.

"I give him minor credit for that," says Starcher.

And why not major credit?

"Because this guy shredding our pension - the employees of this company - shredded our pension to guarantee his," he says.

Guaranteed pensions for the very executives ordering cuts for everyone else, strikes many as the greatest double standard in the economy.