US Senator Charles Grassley, (R-Iowa), said he would not back a proposal by Senators John Rockefeller IV, (D-West Virginia), and Johnny Isakson, (R-Georgia), providing for the 25-year delay to fund accrued liabilities if the airlines agree to freeze their pension plans (See Airline Pension Payment Deferral Legislation Proposed in Senate ), Business Insurance reported.
“We are willing to stretch out payments, but it will not be 25 years,” said Grassley, according to the report.
Airlines testifying at Tuesday’s Senate Finance Committee hearing said they would be willing to help find a compromise. If the committee wants a shorter period to fund liabilities, “That is something we can discuss,” said Delta Air Lines Chief Executive Officer Gerald Grinstein, according to Business Insurance.
In the absence of stretching out pension payments, Delta would have to contribute $2.6 billion to its pension plans over the next three years, which Grinstein said Delta cannot afford. Doing nothing will cause more airlines to terminate their plans and turn them over to the Pension Benefit Guaranty Corporation, the Delta executive said. Delta’s plans are underfunded by about $5.3 billion.