NWA, Pilots Seek Court Approval for Restructured Pension

December 12, 2007 (PLANSPONSOR.com) - Northwest Airlines, supported by the Air Line Pilots Association, has filed in federal court a lawsuit seeking approval of a restructured pension plan for its pilots.

The new plan, proposed by ALPA and accepted by the NWA, is designed to provide an equitable distribution of retirement income for the airline’s approximately 4,500 pilots, according to a  press release .  

Different Approach

“Northwest and ALPA worked together in 2006 to preserve our defined benefit pensions plans,” said Doug Steenland, Northwest president and CEO. “We were the only airline in Chapter 11 to do so and, by freezing our plans instead of terminating them, we were able to preserve more than two billion dollars of pension benefits for thousands of Northwest employees and retirees that would otherwise have been lost. As a result, because their pensions are earned over the first 25 years of their careers, longer service pilots had already earned much or all of the benefit available under their plan and can look forward to earned pension benefits when they retire. Unfortunately, shorter-service pilots have not had the chance to earn full benefits under the plan and, because of the freeze, never will have that chance.”

“ALPA and Northwest both recognized this situation was inequitable and agreed under the terms of their current collective bargaining agreement to work together to remedy the inequity,” said Captain Dave Stevens, Northwest ALPA MEC Chairman. “Accordingly, ALPA exercised its right to propose a new retirement plan that was accepted by the airline to produce similar levels of final retirement income for both groups of pilots.”

“ALPA strongly supports this plan,” Captain Stevens continued. “The tentative agreement reached by the negotiators has been unanimously ratified by our full Master Executive Council and the transition to the new plan is already under way and will be completed by January 1st.”