Airline Pensions Under Siege
Mid week, Delta and Northwest Airlines joined U.S. Airways & United Airlines in filing for protection under Chapter 11 bankruptcy law. The Airline index sank 7% on the news.
The real story is that the employee pension plans of Delta and Northwest are underfunded by a total of $16.3 billion, the federal Pension Benefit Guaranty Corp. said Thursday.
The federal agency, which serves as a safety net for defined pension plans, could be on the hook for $11.2 billion, while employees stand to lose a total of $5.1 billion, the agency estimated.
Delta Air Lines pensions are currently underfunded by $10.6 billion, the PBGC said. Employees could lose $2.2 billion, while the PBGC could pick up $8.4 billion, the largest single claim in the 31-year history of the pension agency.
Meanwhile, Northwest Airlines pensions are underfunded by an estimated $5.7 billion, with employees standing to lose $2.9 billion and the PBGC exposed to the tune of $2.8 billion.
The two airlines said Wednesday they would no longer contribute to their pension plans. Shedding the pension plans was a major goal of the bankruptcy filings, analysts said. Really?
Do you think that the timing of the bankruptcy filings could have something to do with a change in federal bankruptcy law coming on Oct. 17, which will take away some of the control that management currently has over the assets of a bankrupt company.
Another fine example of mismanagement and over paid executives plundering a company, then absconding with millions in compensation as the long term employees get screwed out of their hard earned pensions.
When will the public, employees and unions wise up and put an end to this shameless behavior through legislative change?
The real story is that the employee pension plans of Delta and Northwest are underfunded by a total of $16.3 billion, the federal Pension Benefit Guaranty Corp. said Thursday.
The federal agency, which serves as a safety net for defined pension plans, could be on the hook for $11.2 billion, while employees stand to lose a total of $5.1 billion, the agency estimated.
Delta Air Lines pensions are currently underfunded by $10.6 billion, the PBGC said. Employees could lose $2.2 billion, while the PBGC could pick up $8.4 billion, the largest single claim in the 31-year history of the pension agency.
Meanwhile, Northwest Airlines pensions are underfunded by an estimated $5.7 billion, with employees standing to lose $2.9 billion and the PBGC exposed to the tune of $2.8 billion.
The two airlines said Wednesday they would no longer contribute to their pension plans. Shedding the pension plans was a major goal of the bankruptcy filings, analysts said. Really?
Do you think that the timing of the bankruptcy filings could have something to do with a change in federal bankruptcy law coming on Oct. 17, which will take away some of the control that management currently has over the assets of a bankrupt company.
Another fine example of mismanagement and over paid executives plundering a company, then absconding with millions in compensation as the long term employees get screwed out of their hard earned pensions.
When will the public, employees and unions wise up and put an end to this shameless behavior through legislative change?
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