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Posted on 05/25/2009 8:21:07 PM PDT by Paleo Conservative
Continental Airlines has revealed that it is taking legal action against nine of its pilots that allegedly got divorces so their ex-spouses could collect retirement benefits – while the pilots continued to fly.
According to the airline, the pilots involved in the scam concealed the divorces from their children and their friends, and then re-married after the ex-spouses received payouts from the carrier.
Continental said that the amount it paid out amounted to $10-11 million, all in pension distributions.
Eight of the nine pilots involved have either quit or been fired, but one was hired back by the airline after making a commitment to pay the money back, according to an airline spokesman - although he had been named as a defendant in the lawsuit after failing to repay the pension distribution. The “ex-spouses” were also named as defendants in the action.
The suit was filed in Houston’s federal district court last week by the airline and the pilots’ retirement plan committee. In the action, Continental is asking the court to order that the pilots return the money and also to declare that the airline was not in violation of any anti-discrimination laws when it fired the pilots.
Continental charged that the pilots were taking advantage of a loophole in a federal pension law that allows payment of benefits in divorce actions, before the worker actually retires. Seven male and two female pilots were named in the lawsuit.
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I knew there was another reason why I like Continental Airlines.
My favorite domestic carrier.
Sounds like a hard thing to prove...
I don’t know, when you don’t even tell your kids you got a divorce and then remarry once the money is in the bank.... seems like a pretty good case that there’s fraud going on.
All they have to do is say they were homosexual, and that they were afraid to tell their children and families due to the humiliation.
“the pilots were taking advantage of a loophole”
Isn’t that the purpose of “loopholes”?
They should have stayed divorced and just kept quiet and everyone would have thought they were married.
There are quite a few seniors that get divorced to increase their SS.
Have even considered it since as it is my wife gets half of what my SS is no matter what she would be entitled to.
“seems like a pretty good case that there’s fraud going on.”
B.S., An awful lot of folks get divorced for reasons less valid than financial ones. And B.T.W., the kids are often the last to know...
The way the marriage tax has been implemented a lot of folks get divorced for financial reasons.
The kids never know, even after the divorce?
Why is it fraud. Getting a divorce is perfectly legal.
Getting the divorce to get the pension settlement and then remarrying after getting the money...
Hmmmm...
So what. People marry and divorce for financial reasons all the time.
“Sounds like a hard thing to prove...”
P.I.’s earn their living proving stuff like this.
I used to review QDRO’s (the order that divides the pension) to insure that the math was right and that the spouse got no more than the employee would have gotten anyway, actuarily adjusted for an early disbursement (the spouse can’t get what the employee hasn’t earned). So unless someone with more financial knowledge that me can explain it, I don’t see where the pension fund is losing any money.
“I don’t see where the pension fund is losing any money.”
Unless, of course, the pension fund trustees are looking at a potential reduction in their obligations at some future date due to possible bankruptcy of Continental. This possible scenario seems to have been one of the primary reasons this little “dance” was done by the pilots.
One should never confuse “marriage under the law”, with marriage. They can be, and have been, separate arrangements. In this case, obviously, we are dealing with strictly a financial/legal issue. Yes, the couples were divorced, but it seems they never separated and remarried once the lump sum payment was dispersed. I’m not terrible sure where the fraud occurred.
I can understand how they were fired (doubt it will stick), but what numbskull would resign? Well, they were apparently all very “senior”. Think about that the next time you get on a “big airplane” thinking it is safer. ;-)
This kind of reminds me of the elderly widows in Florida who meet, decide to marry but only have a religious ceremony to assure that they both continue to collect SS. If they had a civil ceremony, one of them would lose their benefits.
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