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- Aug 20, 2002
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US Airways Needs U.S. Help on Pilots'' Pension Plan, Siegel Says
By John Hughes
Washington, Jan. 14 (Bloomberg) -- US Airways Group Inc. needs federal legislation before the end of the month to be able to continue the pension plan for its pilots, Chief Executive Officer David Siegel said.
The airline, which is trying to emerge from bankruptcy and has a $3.1 billion shortfall for all its pension plans, wants legislation that would compel the Pension Benefit Guaranty Corp. to let the company make $300 million a year in contributions for seven years and set up a separate payment plan for the other $1 billion, Siegel told a Senate Appropriations subcommittee.
The pension agency, set up to pay retirement benefits when a plan fails, lacks the legal authority to accept US Airways'' proposal, said the agency''s director, Steven Kandarian.
The Arlington, Virginia-based company said that the majority of the $3.1 billion shortfall is for the pilots'' plan and that it can work out funding for pensions for its mechanics and flight attendants. US Airways, which wants to emerge from bankruptcy at the end of this quarter, also is seeking $1.6 billion in annual labor savings from its workers.
Pennsylvania''s two senators, Arlen Specter and Rick Santorum, are pursuing legislation that would allow the spread-out payments. Specter said he will continue to push for the legislation after being denied quick Senate passage last week. US Airways has a major hub operation at Pittsburgh''s airport.
``We don''t have a lot of time, probably a couple of weeks,'''' Siegel told reporters after the hearing. ``Either way, there will be a solution to the problem that allows us to successfully emerge'''' from bankruptcy.
``The company has the habit of accelerating timelines to the point that labor-friendly solutions cannot be reached,'''' said US Airways Air Line Pilots Association spokesman Roy Freundlich. ``We have enough time to pursue a legislative solution and we''re going to continue on that track. We''re not interested in a company solution that guts our pension plan''''
The federal agency guarantees annual benefits of as much as $43,000 per person, a significant decrease for some pilots who may have received more than $70,000 a year under their original pension benefit plans.
The pilots are the highest-paid employee group and the one with the most pension benefits due.
By John Hughes
Washington, Jan. 14 (Bloomberg) -- US Airways Group Inc. needs federal legislation before the end of the month to be able to continue the pension plan for its pilots, Chief Executive Officer David Siegel said.
The airline, which is trying to emerge from bankruptcy and has a $3.1 billion shortfall for all its pension plans, wants legislation that would compel the Pension Benefit Guaranty Corp. to let the company make $300 million a year in contributions for seven years and set up a separate payment plan for the other $1 billion, Siegel told a Senate Appropriations subcommittee.
The pension agency, set up to pay retirement benefits when a plan fails, lacks the legal authority to accept US Airways'' proposal, said the agency''s director, Steven Kandarian.
The Arlington, Virginia-based company said that the majority of the $3.1 billion shortfall is for the pilots'' plan and that it can work out funding for pensions for its mechanics and flight attendants. US Airways, which wants to emerge from bankruptcy at the end of this quarter, also is seeking $1.6 billion in annual labor savings from its workers.
Pennsylvania''s two senators, Arlen Specter and Rick Santorum, are pursuing legislation that would allow the spread-out payments. Specter said he will continue to push for the legislation after being denied quick Senate passage last week. US Airways has a major hub operation at Pittsburgh''s airport.
``We don''t have a lot of time, probably a couple of weeks,'''' Siegel told reporters after the hearing. ``Either way, there will be a solution to the problem that allows us to successfully emerge'''' from bankruptcy.
``The company has the habit of accelerating timelines to the point that labor-friendly solutions cannot be reached,'''' said US Airways Air Line Pilots Association spokesman Roy Freundlich. ``We have enough time to pursue a legislative solution and we''re going to continue on that track. We''re not interested in a company solution that guts our pension plan''''
The federal agency guarantees annual benefits of as much as $43,000 per person, a significant decrease for some pilots who may have received more than $70,000 a year under their original pension benefit plans.
The pilots are the highest-paid employee group and the one with the most pension benefits due.
