PBGC to assume ground employee pension plan at UAL
US - The Pension Benefit Guaranty Corporation has announced it is moving to assume responsibility for the pensions of more than 36,000 active and retired ground employees at United Airlines.
“United’s pension plan for its ground employees is only 30% funded, the company has missed US$363m in legally required contributions, and management has repeatedly stated its intention to terminate the plan,” said Bradley Belt, PBGC executive director.
“This action was necessary at this time to protect the pension insurance fund against further losses.”
The Ground Employees’ Retirement Plan has US$1.2bn in assets to cover US$4.1bn in benefit promises. The PBGC said it will guarantee payment of an estimated US$2.1bn of the US$2.9bn shortfall.
“The decision to end a pension plan is never an easy one,” Belt said. “But we must do everything we can to preserve our ability to pay benefits to the more than 1m Americans who depend on us for their pension benefits. This is especially true in light of the programme’s current deficit.”
The pension plan ended on March 11, 2005. Until the PBGC becomes trustee, the plan remains ongoing under the sponsorship of United Airlines.
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