The Association of Former Pan Am Employees, Oceanside, N.Y., is asking Congress to investigate the PBGC's handling of the defunct airline's pension plan, and miscalculations of pensions after the regulatory agency took over the pension plan.
The association alleges the Pension Benefit Guaranty Corp. deliberately delayed processing some "final determination of benefits" for between five to 20 years, preventing many former workers from ever challenging the agency's miscalculation of pensions.
The agency also demanded many pensioners repay so-called "overpayments" of benefits with interest, the association contends.
A PBGC spokesman said he couldn't understand why workers allege problems go back 20 years because the agency only took over the plan on July 31, 1991. He also noted it's common practice for the PBGC to begin paying estimated benefits immediately, then to adjust payments based on a thorough review of the company's pension-related records.
"The Pan Am case has been unusually difficult because of the condition in which the airline left its pension records and the protracted bankruptcy in which PBGC claims were settled," he said.