USA - Delta Airlines announced yesterday it had been granted bankruptcy court approval to terminate its pilots' defined pension plan, taking it one step closer to its goal of a successful exit from bankruptcy.
Judge Adlai Hardin made his decision after Delta told the court that DP2, the last remaining union opposition to the plan consisting of 100 retired pilots, had withdrawn its objection over the weekend.
It now only remains for the airline to get the approval of the Pension Benefit Guaranty Corp (PBGC) before it can actually go ahead and drop the plan. As yet no date has been set for this to happen.
Defined benefit pension plans for the airline's approximately 91,000 active and retired flights attendants and ground employees were saved when the Pension Protection Act of 2006 came into law on August 17.
However, the pilots' scheme was deemed unsalvageable due to its "key features and unsupportable costs" which included retirement at 50 and the opportunity to draw down half of their total retirement benefit in one lump sum and get the rest as an annuity.
Edward H. Bastian, Delta's executive vice president, chief financial officer and head of its in-court restructuring efforts, said that the lump sum feature would "exceed US$1bn in the near term alone".
Delta said that it was "on track" to emerge from bankruptcy by mid-2007.
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.