Number of Claimants in PBGC Suit Doubles

April 9, 2001 (PLANSPONSOR.com) - Almost 40,000 former National Airline (NAL) employees have added their names, and doubled the size of the class, in a suit brought against the Pension Benefit Guaranty Corporation (PBGC) by former Pan Am employees.

The additions bring the total number of employees covered by the class action to approximately 85,000.

Richard A. Brooks, the president of the Association of Former Pan Am Employees (AFPAE INC.), the group who filed the suit in November 1997, stated that former NAL employees were misinformed when they questioned the PBGC about their pension benefits.

He charges that until recently the agency would not admit to administering former National pension plans and that very few former NAL employees, aside from those that also worked for Pan Am, have received their Initial Determination Letters. The letters detail the final determination of benefits they are to receive.

Brooks adds that due process such as the right to appeal the PBGC’s decision on pension payments has effectively been denied. Furthermore, that based on the Pan Am experiences, many of PBGC’s computations have been found to be in error.

The 2nd US Circuit Court of Appeals is in the process of hearing the PBGC’s appeal of a third decision in AFPAE’s favor. If the appeal is denied, AFPAE’s lawyers will proceed to the discovery phase.
    

Commenting on other legal action, Mr. Brooks stated the group had just been informed of a Washington, DC judge?s ruling against a motion to dismiss brought on by Office Specialists, PBGC’s outside contractor who administered the Pan Am pension plans from 1991-1998.

This suit alleges that the “cozy” relationship between a number of Office Specialist officers and certain PBGC officials led to the PBGC awarding them the contract to administer the Pan Am and other terminated pension plans.

 

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