UAL is delaying its 2004 pension contribution until it emerges from bankruptcy. The company was scheduled to contribute $563 million to its United Airlines pension fund this year. The deferment is part of a restructuring of its credit facilities with lenders.
Randy Clerihue, a PBGC spokesman, said UAL's action results in an automatic lien, but that doesn't "do the PBGC much good when the company is already in bankruptcy." He said UAL's announcement does not bode well for the future of United's pension fund. "In our experience, it's rare for bankrupt companies that start skipping legally required contributions to start making up the shortfall."