Northwest Airlines Corp., Eagan, Minn., received an informal request from the SEC for information on accounting practices for the airline's $4.81 billion in pension plans, Bernie Han, executive vice president and CFO, said in a conference call today. The SEC "absolutely" has not charged Northwest with any wrongdoing, Mr. Han said. "We believe our accounting practices are sound and we're fully cooperating with this request," he said, noting that the carrier's rate-of-return assumptions for its pension plans "reflect sound practice."
Northwest Airlines assumes a 9.5% rate of return on its pension investments, "lower than the 11.7% average return that our plans have experienced since 1995," Mr. Han said.
Doug Steenland, president and CEO, said in the call that the SEC requested the information "in the last couple days."
Separately, Mr. Steenland said the idea of closing the airline's existing defined benefit plans to new employees and offering a defined contribution plan to new workers is "one that has merit," but extensive talks with labor groups would be necessary first.