Blogging Employee Benefits

May 3, 2006

Pilot Retirees’ Suit Against PBGC Dismissed

Filed under: Litigation, PBGC, Termination (Plan) — Fuguerre @ 12:31 am

Retired U.S. Airways pilots' lawsuit against the Pension Benefit Guaranty Corporation alleging errors in the calculation of estimated benefits under their terminated pension plan has been dismissed by the D.C. appellate court, which found that the retirees had not yet exhausted administrative remedies. [Boivin v. U.S. Airways, No. 03cv02373jr]

When the pension plan terminated in 2003, the PBGC began paying estimated benefits. Without waiting for the conclusion of final benefit determinations, retirees filed suit against U.S. Airways and the PBGC on the basis of the estimated benefit amounts, alleging four primary errors in the calculations and claiming that waiting through the usual 2-3 year formal benefit would cause irreparable harm. The PBGC has since changed its estimates on two of the contested issues in favor of the retirees, but argued against litigation of the remaining issues outside of the agency's established administrative remedies for individuals dissatisfied with its benefit determinations. Finding retirees' arguments for an exception unpersuasive, the appellate court sided with the PBGC without directly addressing the merits of the two remaining alleged errors.

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