The PBGC will pay $5.25 million to a group of retired US Airways pilots whose lump-sum payments were delayed, under a class-action settlement approved by the U.S. District Court for the District of Columbia.
The retired pilots' group first sued the airline in 2000 after lump-sum payments took longer, typically 45 days longer than their official benefit commencement date, than the payments made to retirees receiving monthly benefits. In the meantime, the Pension Benefit Guaranty Corp. became trustee of the plan in March 2003 when US Airways sought bankruptcy protection.
After multiple court decisions and reversals in other jurisdictions as well as the D.C. circuit, U.S. District Judge Rosemary Collyer in Washington certified a class for pilots retiring between 1997 and 2003 and choosing a lump sum. The latest decision approved, on April 30, the final issue over what length of delay would be reasonable, and how much interest should be charged. The $5.25 million settlement was calculated on a 45-day administrative payment delay at 6% interest, plus attorneys' fees and costs. Payments will be made after 60 days.
“It has been long and hard but it is gratifying to be near the end,” plaintiffs' attorney J.C. Nickens of law firm McGuireWoods said in an interview. Mr. Nickens praised the persistence of the class representatives, and said he expected as many as 90% of the nearly 600 class members remaining would participate.