UAL Corp., Chicago, deferred a decision to pay $72.4 million in quarterly minimum funding contributions to its United Airlines pension plans, the company disclosed today in an SEC filing. The payments, due tomorrow, are required under ERISA and the Internal Revenue Code, the filing states.
The payment is part of a total $725 million payment due this year, according to Jean Medina, UAL spokeswoman. So far, UAL has contributed $127 million; aside from the $72.4 million, the remaining $515.6 million is due by Oct. 15, she said. Ms. Medina said company officials haven't decided when they will make a decision on the latest $72.4 million deferred payment.
Deferring the decision to make its contributions "enables United to best manage its resources and preserve its options going forward as it works to secure the exit financing necessary for it to emerge from Chapter 11 bankruptcy protection," the filing states. "This action has no impact on pension benefits currently being paid to United retirees."
Jeffrey Speicher, PBGC spokesman, said he is checking with an agency attorney to get clarification on UAL's authority to defer a payment. But in general, "for companies in bankruptcy protection, it's not unusual for them to defer payments," he said.
Officials of the International Association of Machinists and Air Line Pilots Association didn't return calls by press time for comment.
The company had $6.96 billion in pension assets and $12.65 billion in accumulated pension liabilities as of last Dec. 31, according to its 10-K filing.