US - North West Airlines (NWA) has warned that Congress must act swiftly if it is to avoid another sizeable pension plan being dumped on the Pension benefit Guaranty Corp (PBGC), and ultimately the taxpayer.
Hundreds of NWA staff arrived in Washington to pressure Congress to quickly pass legislation that would allow the airline significantly more time to fund their ailing pension plan, and NWA president Doug Steenland warned that the airline “would be forced to terminate its plans” should the legislation not go through soon.
“Enacting this important legislation now will protect taxpayers from having another large pension plan become the responsibility of the PBGC,” said Steenland.
The legislative process has been widely criticised for taking so long, which could prove significant given that Steenland yesterday told reporters in Washington he would give “serious consideration” to terminating the plan should there be no resolution achieved by the August congressional recess.
The PBGC is already burdened with over US$23bn in debt, of which airline pensions constitute a sizeable chunk.
Some of the nation’s largest airlines - including United Airlines and US Airways - have terminated their DB plans through the Chapter 11 bankruptcy process, turning responsibility for the plans over to the PBGC.
Dave Stevens, master executive council (MEC) chairman of the Northwest unit of the Air Line Pilots Association (ALPA) said the pilots of NWA viewed legislation as a “win, win, win for the taxpayer, employee and our employer, and added:
This is not a taxpayer bailout; rather it is Northwest's opportunity to live up to its obligation over a longer period of time.
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