A federal bankruptcy judge has ruled that United Airlines can terminate its
four employee pension plans covering 134,000 people, the New York Times reports.
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Get Your Report Now!The ruling means that the Pension Benefit Guaranty Corporation will assume
responsibility of the plans, relieving the airline of $3.2 billion in pension
obligations over the next five years. United's pension plans are underfunded
by $9.8 billion, according to the newspaper.
The newspaper says it would be the largest pension default since the government
began guaranteeing pensions.
"It's a hammer blow to thousands of retirees who will have to somehow
make do with lower pension checks," says Joseph Tiberi, a spokesman for
the International Association of Machinists and Aerospace Workers. "The
promises United made to them are worthless."
The company said terminating the pension plans was a necessary step so it could
emerge from bankruptcy.
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