WASHINGTON - A US government insurance program said Friday it was taking over the pensions of some 36,000 employees of United Airlines after the bankrupt carrier failed to keep up with contributions.
The Pension Benefit Guaranty Corporation said it was assuming responsibility for pensions of the active and retired ground employees of United, a unit of UAL Corp.
"United`s pension plan for its ground employees is only 30 percent funded, the company has missed 363 million dollars in legally required contributions, and management has repeatedly stated its intention to terminate the plan," said Bradley Belt, the PBGC executive director.
"This action was necessary at this time to protect the pension insurance fund against further losses."
The PBCG said the ground employees retirement plan has 1.2 billion dollars in assets to cover 4.1 billion in benefit promises.
Of the shortfall, the PBGC will guarantee payment of an estimated 2.1 billion dollars in benefits and will terminate the program.
"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 will continue to receive their monthly benefit checks without interruption, and other workers will receive their pension when eligible to retire," the agency said.
03/11/2005 23:18 GMT