A group of former Pan Am Corp. employees filed suit against the Pension Benefit Guaranty Corp., claiming the agency breached its fiduciary duties, including miscalculating benefits for early retirees.
The agency disputes the claim.
"The PBGC has met all obligations under pension law and finds no merit to the allegations contained in the complaint," an agency spokeswoman said.
The suit, filed last month in the U.S. District Court for the Southern District of New York, asks that the PBGC be removed as trustee and administrator of the Pan Am Corporate Retirement Income Plan.
At issue is whether the employees voluntarily left Pan Am in December 1991 or had to leave because Pan Am no longer was flying.
Early retirees who had 10 years of service and were at least 55 years old were entitled to 79% of age 65 benefits.
But many of the retirees filing suit against the agency couldn't meet some of the requirements because the airline shut down before they qualified for the 79% early retiree benefit.
For those who didn't meet the requirements, the PBGC is paying 45.2% of the original promise.
"The PBGC can pay no more than what people are entitled to under their specific plans," the agency spokeswoman said.
- Patricia B. Limbacher
