Democratic lawmakers today called on the U.S. Bankruptcy Court in Chicago to reject an agreement between UAL Corp. and the PBGC that would allow UAL's United Airlines to shift responsibility of four pension plans, which have a combined shortfall of $9.8 billion, to the federal pension agency. According to the agreement, the PBGC would be responsible for $6.6 billion of promised and vested unfunded liabilities, while United employees and retirees would lose the remaining $3.2 billion in benefits. The court is holding a hearing on the proposed agreement today.
Rep. George Miller, D-Calif., and Rep. Jan Schakowsky, D-Ill., filed an amicus brief with the bankruptcy court late Monday, saying the agreement sets a dangerous precedent and allows the airline to pass off its unfunded liabilities to the PBGC without making good faith efforts to first save the pension plan.
Rep. Pete Stark, D-Calif., and Sen. Ted Kennedy, D-Mass., also introduced legislation today - The Pension Fairness and Full Disclosure Act - that would require companies to give workers full details about executive compensation plans and would link the fate of those plans with those of rank-and-file workers. They noted that just three months before United filed for bankruptcy in 2002, it put $4.5 million in a bankruptcy-proof trust for CEO Glenn Tilton.