Pension issue still looms for US Airways ARLINGTON, Va. (AP) =97 With a critical court hearing scheduled next week,= US=20 Airways has yet to resolve its greatest obstacle to emerging from=20 bankruptcy: a pension plan for pilots that is underfunded by about $800=20 million. The company began negotiations last week with the Air Line Pilots= =20 Association to see if a compromise could be reached, but nothing has been=20 settled. An arbitration process is proceeding slowly. The union presented=20 its pension grievance to management on Wednesday. Only after management=20 rejects the grievance can it be submitted to binding arbitration. The=20 hearing concluded Wednesday afternoon with no ruling from management, said= =20 pilots union spokesman Roy Freundlich. US Airways spokesman David=20 Castelveter confirmed that negotiations began last week but otherwise=20 declined comment. The airline needs a speedy resolution to meet its goal of= =20 emerging from bankruptcy by March 31. The deadline is an important one=20 because the airline cannot obtain $1 billion in financing until it emerges= =20 from bankruptcy. And the company has warned that it may not have enough=20 cash to continue operations much beyond the end of the month. Many companies, particularly airlines, face pension problems because of the= =20 weak economy and the poor performance of the stock market in recent years.= =20 But the issue is urgent for US Airways because U.S. Bankruptcy Judge=20 Stephen Mitchell is unlikely to let the company emerge from bankruptcy=20 without a resolution. A three-day hearing to finalize the airline's=20 reorganization plan is scheduled to begin Tuesday. Under the current=20 pension plan, US Airways estimates that it will need to contribute $1.6=20 billion over the next seven years to the plan for its 8,000 pilots,=20 retirees and other beneficiaries. The company says it has money to cover=20 only about half that amount, so it wants to terminate the existing plan and= =20 use the available money to start a new, smaller pension plan. Most pilots=20 receive annual benefits of $50,000 to $70,000 a year under the old plan.=20 Some are eligible for lump-sum payments ranging from $1 million to $2=20 million. Most pilots estimate that their pensions would be cut in half=20 under US Airways' plan. Freundlich said the company will have to contribute more than the $850=20 million over seven years it has already promised to gain the union's=20 support. He also said the union wants efforts made at reclaiming the $35=20 million paid to executives Rakesh Gangwal, Stephen Wolf and Lawrence Nagin= =20 when they resigned, several months before the company filed for bankruptcy. "When you're asking pilots to take tremendous pay cuts, when you're doing=20 harm to their pension plan, when you have 30 percent of pilots on furlough,= =20 and then you have these three people get a huge windfall ... When you=20 spread that $35 million around to 6,000 pilots, it could do a lot of good." Freundlich said management has not responded to the union's request to=20 recoup the $35 million through the bankruptcy process. David Bronner,=20 president of the Retirement Systems of Alabama, which plans to invest $240= =20 million in US Airways and take a controlling interest when US Airways=20 emerges from bankruptcy, said he doesn't see an alternative to terminating= =20 the pension plan. "There's not a whole lot to talk about," he said. "We're= =20 already on the outer edge of getting approval" for the financial plan. A=20 March 1 ruling by Mitchell endorsed the company's bleak financial outlook=20 and the financial need to terminate the plan, but also made it very=20 difficult for the airline to do so without agreement from the pilots.=20 Bronner agreed with airline management that the company faces liquidation=20 without a successful resolution of the pension issue. "It has to be=20 resolved or the consequences are just vile," he said. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.tha.gov.tt/ TnT Webdirectory: http://search.co.tt *********************************************************