Judge Calls Handling of Pensions in Company Sale 'Appalling'

July 27, 2006 (PLANSPONSOR.com) - An administrative law judge gave initial approval for the sale of PG Energy to UGI Corp., but called the companies' treatment of employee pensions in the sales agreement 'appalling.'

Judge Susan Colwell said she would have denied approval of the sale if she had legal authority to consider the pension funding issue, the Wilkes Barre (PA) Times Leader reports.

In their contract, the companies agreed Southern Union Co. of Houston would retain the pension plan and post-retirement health and life insurance benefits for some employees and retirees of its subsidiary PG Energy, according to the news report. UGI does not provide post-retirement health benefits.

UGI will be responsible for post-retirement benefits for PG Energy employees who are neither 55 years old nor have 20 years of service with the company.

“It is appalling that two companies who should have vast experience with employee relations would conceive and agree to a contract that shows so little regard for the comfort level of the very employees who perform the skilled and sometimes dangerous work on which both companies have been built,” Colwell wrote in her opinion, according to the Times Leader. “Southern Union did not offer to transfer the pension fund so that it would stay with the employees, and UGI did not bother to ask about it,” she added.