Compliance February 11, 2001

Pan Am Pensioners Prevail In PBGC Action

November 2, 2001 (PLANSPONSOR.com) -The Second US Court of Appeals has cleared the way for the Association of Former Pan Am Employees (AFPAE) to bring suit against the Pension Benefits Guaranty Corporation (PBGC) as the trustee of the late Pan American World Airways five pension plans.
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The court dismissed the PBGC’s third appeal of federal Judge Loretta Preska’s decision for lack of appellate jurisdiction, ordering that the case be remanded back to the Circuit Court for Discovery and trial.

The AFPAE has been fighting for their pensions for over 10 years now, since Pan Am went out of business in 1991 ? arguing that the PBGC cannot be both the trustee and insurer of the pension plans.

The AFPAE takes the view that the dual roles translate to a conflict of interests – a fiduciary must act in the sole interest of the plan participants while an insurance company must act in the interests of the bottom line.

– Camilla Klein            editors@plansponsor.com

see also Playing A New Role

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