United Airlines Inc., Elk Grove Village, Ill., appointed Independent Fiduciary Services as independent fiduciary for its pension plans. Judge Eugene R. Wedoff, overseeing the bankruptcy case of United parent UAL Corp., Chicago, today concurred with the appointment in U.S. Bankruptcy Court in Chicago., saying the company has the discretion to make such an appointment without court approval. IFS will pursue claims regarding pension contributions owed to the plans with authority to initiate litigation or other action if there appears to be any breach of fiduciary duty related to funding and contribution issues. It will also recommend funding policies to United's board. IFS can use consultants without court approval and at the airline's expense. However, the fiduciary's duties will not include overseeing investment management of pension assets. United will pay IFS' fee of $175,000 for the first three months and $50,000 each month thereafter. The contract may be terminated by either party after the appointment of a successor independent fiduciary approved by the Labor Department. United appointed IFS after consultation with the DOL.
United owes $563 million in pension contributions for the rest of this year and faces $4 billion in pension obligations through 2008. United plans had $6.96 billion in assets and $12.65 billion in accumulated pension liabilities as of Dec. 31, according to UAL's 10-K filing.