United Airlines' Master Executive Council of the Air Line Pilots Association today said it will "vigorously oppose any effort by the PBGC to take over" the pilots pension plan before May 1, according to a statement on the union's website. The council called the PBGC's motion to take over the plan, filed in federal court Dec. 30, an "ill-timed attempt to retaliate against the United pilot group." The union claimed the pilots' tentative agreement with the airline doesn't allow for the termination of the plan "without a final judicial determination that pension termination is necessary" for the carrier to exit bankruptcy protection before May 1, the statement said.
Jean Medina, United spokeswoman, was not immediately available for comment today.
In a separate statement, ALPA President Duane Woerth condemned the PBGC's motion, calling it "bad business and a deplorable move by an entity that purports to care for those who have earned pension benefits over decades of faithful service."
The PBGC asked the U.S. District Court for the Northern District of Illinois to terminate United's pilots pension plan and allow the agency to become its statutory trustee, according to court papers. PBGC officials concluded that terminating the plan now would be more cost-effective than waiting to terminate the plan later. The agency estimated the United pilots' defined benefit plan is 49% funded, with $2.8 billion in assets and $5.7 billion in benefit liabilities. The PBGC expects to be liable for about $1.4 billion in guaranteed benefits of the estimated $2.9 billion in underfunding — which would be the third-largest claim in the history of the pension insurance program.
Dave Kelly, ALPA spokesman, was not immediately available for comment. Jeffrey Speicher, PBGC spokesman, said the agency currently has no response to the pilots' statements.