US - Northwest Airlines, (NWA) supported by the Air Line Pilots Association, (ALPA) has filed a lawsuit to confirm that a restructured pension plan for its pilots is legal.
While both NWA and ALPA said they were confident the new plan complied with all legal requirements, and while NWA intended to implement the plan on schedule, some longer-serving pilots contended that it was unlawful, leading NWA to file an action asking the federal court to determine the plan met all legal requirements.
Doug Steenland, president and CEO at NWA, said: "NWA and ALPA worked together in 2006 to preserve our defined benefit pensions plans. We were the only airline in Chapter 11 to do so and, by freezing our plans instead of terminating them, we were able to preserve more than $2bn of pension benefits for thousands of NWA employees and retirees that would otherwise have been lost.
"As a result, because their pensions are earned over the first 25 years of their careers, longer service pilots had already earned much or all of the benefit available under their plan and can look forward to earned pension benefits when they retire. Unfortunately, shorter-service pilots have not had the chance to earn full benefits under the plan and, because of the freeze, never will have that chance."
Captain Dave Stevens, chairman of the NWA ALPA Master Executive Council, added: "ALPA strongly supports this plan. The tentative agreement reached by the negotiators has been unanimously ratified by our full Master Executive Council and the transition to the new plan is already under way and will be completed by 1 January."
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