Reuters
US Asks Rejection of United Pension Plans
Friday August 13, 12:38 pm ET
WASHINGTON (Reuters) - U.S. pension insurers will urge a federal bankruptcy court on Friday to reject plans by United Airlines (OTC BB:UALAQ.OB - News) to stop funding its employee pension funds, officials said.
The Pension Benefit Guaranty Corp., which insures corporate pension accounts covering 44 million workers and retirees, also said updated claims show that retirement accounts covering the airline's four unions are underfunded by $8.3 billion.
The government would be responsible for insuring $6.4 billion in guaranteed benefits for United workers if all four plans were terminated.
United announced last month that a new debtor-in-possession financing agreement with its lenders prohibited it from making new pension payments while in bankruptcy, a move the government says violates the law.
The airline missed a $72 million contribution in July and plans not to meet a $404 million payment in September and a $91 million contribution in October.
"The bankruptcy court should reject this attempt to sidestep statutory funding rules. Agreements between private parties must not take precedence over federal pension law," said Bradley Belt, the pension agency's director.
United had no immediate comment
US Asks Rejection of United Pension Plans
Friday August 13, 12:38 pm ET
WASHINGTON (Reuters) - U.S. pension insurers will urge a federal bankruptcy court on Friday to reject plans by United Airlines (OTC BB:UALAQ.OB - News) to stop funding its employee pension funds, officials said.
The Pension Benefit Guaranty Corp., which insures corporate pension accounts covering 44 million workers and retirees, also said updated claims show that retirement accounts covering the airline's four unions are underfunded by $8.3 billion.
The government would be responsible for insuring $6.4 billion in guaranteed benefits for United workers if all four plans were terminated.
United announced last month that a new debtor-in-possession financing agreement with its lenders prohibited it from making new pension payments while in bankruptcy, a move the government says violates the law.
The airline missed a $72 million contribution in July and plans not to meet a $404 million payment in September and a $91 million contribution in October.
"The bankruptcy court should reject this attempt to sidestep statutory funding rules. Agreements between private parties must not take precedence over federal pension law," said Bradley Belt, the pension agency's director.
United had no immediate comment
