A bankruptcy judge approved Northwest Airlines Corp.'s proposal to freeze pilot pensions and switch to a retirement plan that will reduce the company's costs.
Under the proposal, which the pilots approved Jan. 12, contributions to current pensions halted Tuesday with the switch to the new retirement plan today, said Gregory Petrick, an attorney for the bankrupt carrier.
Hearings on the concessions resume today before U.S. Bankruptcy Judge Allan Gropper.
Northwest has said it must win a change in U.S. law that would let it spread contributions to existing pensions over a longer period, or risk being forced to terminate the retirement plans in the company's Chapter 11 bankruptcy reorganization. The legislation is under consideration in Congress.
Under the new retirement plan, Northwest will contribute an amount equal to 5 percent of the employees' pay. Death benefits for pilots' families will also be replaced with life insurance and long-term disability programs will be funded jointly by Northwest and the pilots' association.
Salt Lake Tribune
Under the proposal, which the pilots approved Jan. 12, contributions to current pensions halted Tuesday with the switch to the new retirement plan today, said Gregory Petrick, an attorney for the bankrupt carrier.
Hearings on the concessions resume today before U.S. Bankruptcy Judge Allan Gropper.
Northwest has said it must win a change in U.S. law that would let it spread contributions to existing pensions over a longer period, or risk being forced to terminate the retirement plans in the company's Chapter 11 bankruptcy reorganization. The legislation is under consideration in Congress.
Under the new retirement plan, Northwest will contribute an amount equal to 5 percent of the employees' pay. Death benefits for pilots' families will also be replaced with life insurance and long-term disability programs will be funded jointly by Northwest and the pilots' association.
Salt Lake Tribune
