United reaches agreement to cancel pension plans
In a move designed to help its exit from bankruptcy, UAL Corp., the parent company of United Airlines, said Friday it has reached an agreement with the Pension Benefit Guaranty Corp. (PBGC) to terminate all of United’s defined benefit pension plans.
The agreement is subject to approval by the U.S. Bankruptcy Court.
“This agreement with the PBGC resolves one of the major issues standing between United and its successful exit from bankruptcy. It will allow the company to move forward as a sustainable, competitive enterprise for the long term,” said UAL in a statement.
“While the company’s first choice was to resolve pension issues consensually with all of its unions, unfortunately no viable solutions were offered or found over the past many months,” said UAL. “In the event that United and its unions are able to find a viable alternative to termination and replacement of their defined benefit pension plans prior to this agreement taking effect, the agreement would allow United to pursue that alternative,” UAL added.
UAL’s trial with the Bankruptcy Court is scheduled to begin May 11.