According to PBGC estimates, the pilots’ pension plan is underfunded by $2.5 billion, as the plan only has $1.2 billion in assets to cover $3.7 billion in benefit liabilities. Of the $2.5 billion in underfunding, the PBGC estimates its liability to be approximately $600 million, making the US Airways’ pilots plan the sixth-largest claim in the agency’s 28-year history, according to a news release.
Further, with the termination of the US Airways’ pension plan for pilots, four of the 10 largest claims in PBGC’s history are now from airline companies (See Steel, Airlines Weigh on PBGC ). Overall, the airline industry accounts for 17% of total PBGC claims but fewer than 2% of insured participants.
The PBGC will begin distributing trusteeship notification letters to all active and retired US Airways pilots within the next several weeks. Following the transfer of plan documents, the agency will review individual re cords and calculate each person’s benefit according to planprovisions, asset allocation rules, and federal guarantee limits.
Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2003 is $43,977.24 a year. At age 60, the maximum is $28,585.20. If the plan has sufficient assets, however, participants who are already retired or near retirement can receive more than the guaranteed amounts under the asset-allocation rules of the ERISA (See PBGC 2003 Maximum Benefit Up by 2.3% ).
More information about the US Airways’ pension plan for pilots is available at the PBGC Web site, www.pbgc.gov/usairways . Workers and retirees with additional questions may contact PBGC’s Customer Service Center toll-free at 1-800-400-7242.
The PBGC is a federal corporation created under ERISA. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in about 32,500 private-sector defined benefit pension plans.