NU Online News Service, March 28, 2003, 12:33 p.m. EST – The Pension Benefit Guaranty Corp. says it is approving efforts by U.S. Airways Group Inc., Arlington, Va., to replace its pilots’ defined-benefit pension plan with a defined-contribution pension plan.
U.S. Airways has filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. The company has asked a bankruptcy court to give it permission to terminate its existing pension plan.
The Air Line Pilots Association International, Alexandria, Va., argued in February that the matter should be resolved using the Railway Labor Act, which governs airline labor contracts, rather than through the bankruptcy court.
But the PBGC says the pilots association now acknowledges that U.S. Airways will not be in a position to set up a new defined-benefit plan before 2009.
The PBGC will be taking over obligations for the old, terminated U.S. Airways defined-benefit pension plan.