PMA, POD, and the Welfare Benefit Trust: The Facts

Disinformation on social media regarding the Pilot Mutual Aid (PMA) plan, Pilot Occupational Disability (POD) plan, and the Welfare Benefit Trust has generated questions from APA members. As APA President CA Ed Sicher has emphasized in recent updates, information integrity is critical. You need to have the facts to make informed decisions.

Q: Are PMA and POD solvent?

A: Yes, both plans are solvent. A team of experienced, credentialed investment advisors works closely with APA to constantly monitor the plans to ensure proper funding to meet our pilots’ long-term needs. These same outside advisors serve a blue-chip roster of clients across a broad range of industries — these are not “mom and pop” firms. The plans themselves are dynamic, with each one influenced by its individual plan design, claim utilization, funding, and investment performance.

As we all know, 2022 was a challenging year for investors, with the Federal Reserve raising interest rates seven times to drive down inflation. Stocks and bonds alike reacted negatively to the rate hikes, leaving investors nowhere to hide. The Welfare Benefit Trust, which serves as the funding backstop for the APA-sponsored health and welfare benefits plans, posted a 16.2% loss for the year. By way of comparison, the Russell 3000 Index lost 19.2%, the MSCI EAFE lost 14.4%, and the Bloomberg U.S. Aggregate Bond index lost 13%.

It’s important to evaluate an investment portfolio in comparison with its applicable benchmarks and with overall market performance during a period of multiple years. Setting aside 2022, the long-term performance of the Welfare Benefit Trust has been strong, averaging an annual return of 7.8% versus its benchmark target of 7.5%. The investment policy of the Welfare Benefit Trust is designed to weather investment storms and has done precisely that.

Q: Is the Welfare Benefit Trust properly diversified?

A: Yes, the Welfare Benefit Trust is invested in a well-diversified portfolio structured to achieve long-term goals through risk-adjusted returns. However, reputable investment advisors understand that even a properly diversified portfolio like the Welfare Benefit Trust cannot generate a positive return when both stocks and bonds are posting negative returns.

Q: Where can I go for additional information about PMA and POD?

A: If you have a question about the APA plans, we encourage you to email APA Benefits or call 817-302-2140.