Bipartisan Group of Senators to Push for US Airways to Restore Employee Pensions

During last weeks Senate Hearings in Washington D.C., US Airways CEO Doug Parker was criticized for terminating employee pensions and the long term impact on the PBGC. Senators asked Parker if a merger with Delta was approved, would he restore the terminated pension program. Parker paused for a moment and stated - "no." That was not the answer many of the elected officials gathered there last Wednesday were looking for. Today, a bipartisan group of Senators sent a letter to the head PBGC asking him to explore the possibility of restoring the terminated pension program at U.S. Airways. Read more below.


Letter to PBGC asks Agency to Consider Restoring U.S. Airways Employee Pension Program Tuesday, January 30, 2007

WASHINGTON, D.C. - Last night, United States Senator Frank R. Lautenberg (D-NJ), along with a bipartisan group of his colleagues, sent a letter to the head of the Pension Benefit Guarantee Corporation (PBGC), asking him to explore the possibility of restoring the terminated employee pension programs at U.S. Airways, in light of the airline’s substantially improved financial circumstances. The employee pension plans, which were under funded by $4.8 billion at the time of their termination, have since been assumed by the PBGC. By law, PBGC has the authority to take such action if a company’s financial situation is improved. Earlier this month, US Airways offered to purchase the larger Delta Airlines for some $10.2 billion, including $5 billion in cash. “If US Airways now clearly has ability to generate considerable cash and has easy access to credit markets, the company’s ability to restore its terminated pension plans must be fully explored. This is especially true in light of the fact that PBGC regulations would permit the restored plans to be funded over a period of up to 30 years, which is an even longer funding period than airlines are afforded under the Pension Protection Act of 2006,” the lawmakers wrote. “The Federal government shouldn’t allow a company that dumped its pension responsibilities buy another,” said Lautenberg. “US Airways should take care of its employees before taking over another airline.” Senators Johnny Isakson (R-GA), Maria Cantwell (D-WA), Saxby Chambliss (R-GA), and Patty Murray (D-WA) also joined