Delta Air Lines says the pension package is what it needs to keep its fund alive. “Delta will be in a position to preserve its pension plan covering 91,000 active and retired ground and flight-attendant employees, thereby preserving their hard-earned benefits and preventing the U.S. pension system from being burdened with additional plan liabilities,” Gerald Grinstein, Delta’s chief executive, said in a statement. Both Delta and Northwest froze their plans as part of their bankruptcy rescue operation but neither American nor Continental is in that position. To freeze their plans and qualify for the benefits under the bill, the Texas-based airlines would have to have the agreement of their unions. So far, Continental has the approval of its pilots to freeze the plan but none of the other unions has agreed. At American, employees accepted steep pay cuts in 2003 in exchange for the airline maintaining the pension plan.
Delta Lauds Plan
Key Takeaways:
- Delta Air Lines intends to preserve its pension plan, covering 91,000 employees, through a specific pension package, having already frozen the plan during its bankruptcy.
- Unlike Delta and Northwest, American and Continental airlines need union agreement to freeze their pension plans and qualify for related benefits.
- Continental has secured approval from its pilots to freeze the plan, but other unions have not yet agreed, while American's employees accepted pay cuts in 2003 for the airline to maintain the pension plan.
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