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.
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.