Received this morning from CLT F/A LOCAL:
Lautenberg Leads Bipartisan Group of Senators to Push for Restoring Airline Employee Pensions
Letter to PBGC asks Agency to Consider Restoring U.S. Airways Employee Pension Program
Tuesday, January 30, 2007
WASHINGTON, D.C. - Last night, United States Senator Frank R. Lautenberg (D-NJ), along with a bipartisan group of his colleagues, sent a letter to the head of the Pension Benefit Guarantee Corporation (PBGC), asking him to explore the possibility of restoring the terminated employee pension programs at U.S. Airways, in light of the airline’s substantially improved financial circumstances. The employee pension plans, which were under funded by $4.8 billion at the time of their termination, have since been assumed by the PBGC.
By law, PBGC has the authority to take such action if a company’s financial situation is improved. Earlier this month, US Airways offered to purchase the larger Delta Airlines for some $10.2 billion, including $5 billion in cash.
“If US Airways now clearly has ability to generate considerable cash and has easy access to credit markets, the company’s ability to restore its terminated pension plans must be fully explored. This is especially true in light of the fact that PBGC regulations would permit the restored plans to be funded over a period of up to 30 years, which is an even longer funding period than airlines are afforded under the Pension Protection Act of 2006,†the lawmakers wrote.
In addition, US Airways has offered to pay $10.2 billion - including $5 billion of cash - to buy the much larger Delta Air Lines, further demonstrating US Airways' ability to bear the cost of its terminated pension plans. Indeed, it is striking that the $5 billion in cash being offered as part of the hostile Delta offer exceeds the full amount of the unfunded liabilities recently transferred to the PBGC. Certainly, neither the PBGC, other employers paying premiums to the PBGC, innocent pensioners, nor taxpayers should bear billions in costs to enable companies to buy out their competitors.
If US Airways now clearly has ability to generate considerable cash and has easy access to credit markets, the company’s ability to restore its terminated pension plans must be fully explored. This is especially true in light of the fact that PBGC regulations would permit the restored plans to be funded over a period of up to 30 years, which is an even longer funding period than airlines are afforded under the Pension Protection Act of 2006.
For these reasons, we request that the PBGC explore restoration of US Airways' terminated employee pension plans.
Sincerely,
Frank R. Lautenberg (D-NJ), Johnny Isakson (R-GA), Maria Cantwell (D-WA), Saxby Chambliss (R-GA), and Patty Murray (D-WA)
LEC Officers
CLT Council 89
[email protected]
AFA-CWA AFL-CIO
Lautenberg Leads Bipartisan Group of Senators to Push for Restoring Airline Employee Pensions
Letter to PBGC asks Agency to Consider Restoring U.S. Airways Employee Pension Program
Tuesday, January 30, 2007
WASHINGTON, D.C. - Last night, United States Senator Frank R. Lautenberg (D-NJ), along with a bipartisan group of his colleagues, sent a letter to the head of the Pension Benefit Guarantee Corporation (PBGC), asking him to explore the possibility of restoring the terminated employee pension programs at U.S. Airways, in light of the airline’s substantially improved financial circumstances. The employee pension plans, which were under funded by $4.8 billion at the time of their termination, have since been assumed by the PBGC.
By law, PBGC has the authority to take such action if a company’s financial situation is improved. Earlier this month, US Airways offered to purchase the larger Delta Airlines for some $10.2 billion, including $5 billion in cash.
“If US Airways now clearly has ability to generate considerable cash and has easy access to credit markets, the company’s ability to restore its terminated pension plans must be fully explored. This is especially true in light of the fact that PBGC regulations would permit the restored plans to be funded over a period of up to 30 years, which is an even longer funding period than airlines are afforded under the Pension Protection Act of 2006,†the lawmakers wrote.
In addition, US Airways has offered to pay $10.2 billion - including $5 billion of cash - to buy the much larger Delta Air Lines, further demonstrating US Airways' ability to bear the cost of its terminated pension plans. Indeed, it is striking that the $5 billion in cash being offered as part of the hostile Delta offer exceeds the full amount of the unfunded liabilities recently transferred to the PBGC. Certainly, neither the PBGC, other employers paying premiums to the PBGC, innocent pensioners, nor taxpayers should bear billions in costs to enable companies to buy out their competitors.
If US Airways now clearly has ability to generate considerable cash and has easy access to credit markets, the company’s ability to restore its terminated pension plans must be fully explored. This is especially true in light of the fact that PBGC regulations would permit the restored plans to be funded over a period of up to 30 years, which is an even longer funding period than airlines are afforded under the Pension Protection Act of 2006.
For these reasons, we request that the PBGC explore restoration of US Airways' terminated employee pension plans.
Sincerely,
Frank R. Lautenberg (D-NJ), Johnny Isakson (R-GA), Maria Cantwell (D-WA), Saxby Chambliss (R-GA), and Patty Murray (D-WA)
LEC Officers
CLT Council 89
[email protected]
AFA-CWA AFL-CIO
