The PBGC opposed Delta’s intention to give the pilots $650 million in notes, conditioned on termination of the pilots’ retirement plan, and a $2.1 billion unsecured claim to fund “follow-on retirement plans and other payments or distributions to pilots.” According to the agency, the settlement violates the Employee Retirement Income Security Act (ERISA) and the money should go to the PBGC (See PBGC Says Delta’s Settlement with Pilot’s Union Defies ERISA ).
US Bankruptcy Judge Adlai Hardin ruled for the airline, rejecting the PBGC’s objections (See Judge Gives Nod to Delta’s Settlement with Pilots Union ).
According to Reuters, the appeal questions whether the court can approve a deal that compensates employees for losses resulting from the underfunding of their pension plan, “when all claims for such underfunding belong exclusively to the PBGC.”
Meanwhile, the Cincinnati Business Courier reports that Delta’s president Gerald Grinstein met with senators and representatives to push for a quick resolution to the pension reform bill lawmakers are now trying to reconcile. “If Congress passes the airline funding provision contained in the Senate pension reform legislation very soon, it will give us a fighting chance to preserve the benefits accrued under the plan covering these employees,” Grinstein said in a news release, according to the news report. The Senate provision would allow Delta and other airlines with similar pension plans to extend their funding payments over a longer period.
« Report: PBGC Liabilities Could Top $120 Billion Over 10 Years