Northwest Airlines, Eagan, Minn., agreed on Wednesday to pay the PBGC $14 million to settle overdue insurance premiums for its pilot retirement plan, confirmed PBGC spokesman Jeffrey Speicher. The agreement means the PBGC will release the airline from liens for missed premium payments. Northwest filed for bankruptcy protection Sept. 14, 2005; at the time its defined benefit pension plans were underfunded by $5.7 billion, Mr. Speicher said.
Northwest spokesman Roman Blahoski said the airline was not able to provide figures for the amount of assets in the pilots' retirement plan; he was not able to comment further at press time. Pensions & Investments estimates the airline had total defined benefit assets of $6.3 billion as of Sept. 30.
Separately, the airlines' objection to former employees' claim involving the airline's $5.7 billion in underfunded pension liabilities will be heard on March 15. A judge for the U.S. Bankruptcy Court in New York today postponed a hearing to review the objection, filed Dec. 15, confirmed Northwest attorney Nathan Haynes. The objection states that the claims "duplicate claims already filed by the pension plans' independent fiduciary, who is authorized to pursue any such claims on behalf of the pension plans" and that they ignore the Pension Protection Act of 2006, which the airline said protects it from such claims.
The seven former employees listed as plaintiffs alleged last fall that Northwest breached its fiduciary duty by failing to properly fund the pension plans.
