Northwest Airlines Corp., Eagan, Minn., will freeze its pension plan for salaried employees on Aug. 31 and establish a new 401(k) plan for those employees, said Jennifer Bagdade, Northwest spokeswoman. The Northwest Airlines Pension Plan for Salaried Employees covers 3,300 active salaried employees, including senior management, Ms. Bagdade said. Employees covered by the pension plan were notified of the changes in an internal memo on Thursday that called the freezing of the plan "a critical step in (Northwest's) strategy to restore profitability and avoid bankruptcy."
An amendment to the airline's annual report said the plan "covers eligible management employees of Northwest and certain affiliated companies," including Douglas M. Steenland, president and CEO, and Bernard L. Han, executive vice president and CFO.
Northwest had about $5.4 billion in total pension assets and about $9.2 billion in pension liabilities as of Dec. 31, according to the airline's annual report. Assets and liabilities for the salaried-worker plan were not available.
Gary Martin, Northwest's assistant treasurer and director-cash and pension investments, declined comment on the matter and referred questions to the corporate communications department.