UAL Corp., Elk Grove, Ill., projected pension obligations of about $4.9 billion between 2005 and 2010, according to the United Airlines parent company's annual report. Company officials estimate pension obligations of $1.3 billion in 2005, a combined $2.7 billion in 2006 and 2007, a combined $800 million in 2008 and 2009 and $100 million in 2010.
The company ceased contributions to its pension plans in July 2004, and airline officials have said the company must terminate its defined benefit plans and replace them with less expensive defined contribution plans to obtain sufficient exit financing and emerge from Chapter 11 bankruptcy protection. The carrier's pension plans had roughly $7.2 billion in total assets as of Dec. 31, according to the report.
If United cannot reach long-term agreements with labor groups related to contracts and pension issues by May 11, the U.S. Bankruptcy Court in Chicago will begin a trial on the matter that day.
Separately, Altria Group Inc., New York, expects to contribute about $780 million to its U.S. pension plans and about $210 million to its non-U.S. pension plans in 2005, according to the company's most recent 10-K filing. The company had about $10.6 billion in U.S. pension assets as of Dec. 31 and about $4.5 billion in non-U.S. pension assets at the Sept. 30 measurement date.
Altria also reduced its long-term assumed rate of return for pension assets to 8% from 9% as of Dec. 31 and lowered its discount rate assumption to 5.75% from 6.25% at the same date, the filing said.