In a letter to Senator Johnny Isakson (R-Georgia) that was also sent to other members of Congress, Delta CEO Gerald Grinstein said the company will seek termination of the pilots’ plan effective September 2, according to the AP.
Delta’s intent to terminate the plan has been known, and a bankruptcy court has already approved a settlement between Delta and its pilots union that would give the pilots $650 million in notes, conditioned on termination of the pilots’ retirement plan and a $2.1 billion unsecured claim to fund “follow-on retirement plans and other payments or distributions to pilots” (See Judge Gives Nod to Delta’s Settlement with Pilots Union ).
The Pension Benefit Guaranty Corporation (PBGC) has appealed the bankruptcy court decision, contending that, according to the Employee Retirement Income Security Act (ERISA), the compensation should go to the agency if the plan is terminated (SeePBGC Appeals Court Decision on Delta Pilots Contract).
Once the notice of the termination request is sent to the PBGC, a judge will have to approve that decision as well. The AP notes there will likely be objections, though the pilots have agreed not to object.
Grinstein said in his letter to the legislators that the company hopes pension reform will soon be passed by Congress, so that other pension plans might be salvaged.
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