PBGC Will Assume Ground Employee Pension Plan at UAL
FOR IMMEDIATE RELEASE
March 11, 2005
WASHINGTON-The Pension Benefit Guaranty Corporation today announced it is moving to assume responsibility for the pensions of more than 36,000 active and retired ground employees of United Airlines.
"United's pension plan for its ground employees is only 30 percent funded, the company has missed $363 million in legally required contributions, and management has repeatedly stated its intention to terminate the plan," said Executive Director Bradley Belt. "This action was necessary at this time to protect the pension insurance fund against further losses."
The Ground Employees' Retirement Plan has $1.2 billion in assets to cover $4.1 billion in benefit promises. Of the $2.9 billion shortfall, the PBGC will guarantee payment of an estimated $2.1 billion in benefits. The pension plan ends as of March 11, 2005.
"The decision to end a pension plan is never an easy one," said Belt. "But we must do everything we can to preserve our ability to pay benefits to the more than 1 million Americans who depend on us for their pension benefits. This is especially true in light of the program's current deficit."
Retirees in the United Airlines Ground Employees' Retirement Plan will continue to receive their monthly benefit checks without interruption, and other workers will receive their pension when eligible to retire. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2005 is $45,613 per year. The maximum guaranteed amount is lower for those who retire earlier or elect survivor benefits. In addition, certain early retirement subsidies and benefit increases made within the past five years may not be fully guaranteed.
Until the PBGC becomes trustee, the pension plan remains ongoing under the sponsorship of United Airlines. Workers and retirees with questions may consult the PBGC Web site, www.pbgc.gov or call toll-free at 1-800-400-7242. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask for 800-400-7242.
United Airlines retirees who draw a benefit from the PBGC may be eligible for the federal Health Coverage Tax Credit.
The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 31,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns.
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PBGC No. 05-30