PENSIONS OF UNITED WORKERS SLASHED BY COURT DECISION

[The math on this indicates that the average United current or retired employee stands to lose $5300 a year as a result of this decision]

BBC - A US bankruptcy judge has approved plans by United Airlines to terminate its employees' pension plans. The troubled US carrier said it would save about $645m a year, in what would become America's largest corporate pension default. United plans to transfer responsibility for its four defined-benefit plans to the US government's pension agency.

Employees could lose thousands of dollars a year from their pensions when they are assumed by the US Pension Benefit Guaranty Corp. Some 120,000 current and retired United employees are covered by the pensions. "Thousands of retirees will be severely impacted by the ruling," said a spokesman for the International Association of Machinists and Aerospace Workers. They have already seen their retirement medical costs skyrocket because of United's bankruptcy. . . and now will have reduced pensions. It's a devastating blow."

Workers have vowed to strike if their pensions are terminated. But Jake Brace, United's chief financial officer, said the company was doing what was necessary for its long-term survival. "The judge ruled that we did not violate the contract, so we did not violate the law and they (the unions) have no right to strike," he said.

In January, pilots and flight attendants at United agreed to accept pay cuts worth $310m a year to help the carrier emerge from bankruptcy protection.

http://news.bbc.co.uk/go/rss/-/2/hi/business/4535403.stm


AP - United's effort to dump its pensions is being watched closely by the rest of the industry, where record fuel costs, the lowest fares since the early 1990s and stiff competition have caused large airlines to post billions of dollars in losses. A successful move by United to get out from under its pension obligations, following a step taken by US Airways Group in February, would clear the way for similar actions elsewhere.

http://www.iht.com/articles/2005/05/10/business/air.php

SAN FRANCISCO CHRONICLE - It's been a rough ride for workers at United Airlines over the last five years. Nearly 40,000 United workers -- including 9,000 in the Bay Area -- retired, quit or were laid off as the troubled airline slashed its workforce. . .

Employees who once owned big chunks of the airline's parent company, UAL Corp., through an employee stock ownership plan lost their stock when the company went into Chapter 11 bankruptcy reorganization in 2002. Moreover, they have conceded $2.5 billion a year in wages and benefits to United, which says it needs even more stringent cost-containment to emerge from bankruptcy.

SF Gate Article