Blogging Employee Benefits

January 14, 2006

United Airlines Flight Attendants Lose Another Round in Court

Filed under: Litigation, PBGC, Pensions, Termination (Plan) — Fuguerre @ 6:58 pm

The Pension Benefit Guaranty Corporation did not violate ERISA and other applicable laws when it terminated United Airlines flight attendants’ pension plan, according to a district court ruling handed down yesterday. Although the court considered it improper for the PBGC to rely on its Settlement Agreement with United to justify the plan termination, the court recognized that the agency had other valid justifications on which it relied. [MEC President Letter, Master Executive Council, Association of Flight Attendants-CWA; Press Release (1/13/06)]

Two previous challenges mounted by the flight attendants against the plan termination – one in bankruptcy court and one on appeal to the 7th U.S. Circuit Court of Appeals – had also failed. The flight attendants continue to negotiate with United regarding terms of a replacement 401(k) plan, hoping to improve on the current 4% contribution offer. AFA-CWA has also challenged executive compensation provisions included in United’s Plan of Reorganization, as well as United’s reservation of rights to reject the Flight Attendant Collective Bargaining Agreement after the airline’s emergence from bankruptcy.


  1. See followup regarding agreement between AFA and United on terms of a replacement DC plan.

    Comment by Fuguerre — January 18, 2006 @ 1:16 pm

  2. “[ERISA] does not appear to contemplate that ‘long-run loss . . . with respect to the plan’ can encompass factors distince from the financial health of the plan itself.”

    Text of the court’s decision finding that the PBGC did not violate ERISA by involuntarily terminating the United flight attendants’ pension plan can be found here.

    Comment by Fuguerre — January 18, 2006 @ 1:44 pm

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