URL: http://msnbc.msn.com/id/12100666/ PBGC may face $1bn bill for airline pilots' pensions By Doug Cameron in Chicago Financial Times Updated: 1:12 a.m. ET April 1, 2006 The Pension Benefit Guaranty Corporation may face an extra bill of $1bn to help US airline pilots under a little-noticed amendment to proposed pension legislation that is gaining traction in Congress. The proposed Akaka amendment, if passed, would require the federal agency to pay extra benefits to flight crew from bankrupt airlines. A succession of carriers, including United Airlines and US Airways, have used bankruptcy protection to terminate their underfunded pensions and turn them over to the PBGC, which acts as a federal safety net. However, the amendment would also cover staff from failed carriers dating back as far as the collapse of Braniff in 1982. Airlines, faced with underfunded plans, have lobbied hard over the past year to become the only industrial sector with their own stand-alone provisions in the broader US pension reform bill due to be voted on by Congress in the coming weeks. A 26-member House and Senate conference is trying to reconcile differences between the bills passed by each chamber in December. John Boehner, House majority leader and a member of the conference, said on Thursday that the legislation would have to wait until after the Easter recess. Congressional officials have also said an airline-only bill could also be passed first if the national legislation is delayed. The Senate version includes provisions giving airlines more time to make up for underfunding, and the House this month voted to instruct its conference members to back the plan. The final version was expected to contain some of the airline-specific language passed by the Senate, said Capt Duane Woerth, president of the Air Line Pilots Association. The amendment sponsored by Senator Daniel Akaka addresses the loss that pilots suffer because they must retire at 60. Pilots from airlines whose plans have been taken over by the PBGC suffer an actuarial cut because of the age difference, reducing their annual payout to $29,000. This is $16,000 less than workers who retire at the normal age of 65. Capt Woerth said the $1bn bill estimated by some Congressional aides was "wildly exaggerated", while the PBGC said it had yet to determine the final cost. The pension reform is anxiously awaited by Northwest Airlines and Delta Air Lines, which both filed for bankruptcy protection last September. Northwest has frozen its pilot pension scheme, while Delta remains locked in talks with its flight crew and is expected to terminate its plan and turn it over to the PBGC. "The airlines are driving the bill," said Andrea Fischer Newman, Northwest's senior vice-president for government affairs. "Everyone understands the urgency." Copyright The Financial Times Ltd. All rights reserved. pd_top('Story','handheld','12100666','PBGC may face $1bn bill for airline pilots\' pensions','The Pension Benefit Guaranty Corporation may face an extra bill of $1bn to help US airline pilots under a little-noticed amendment to proposed pension legislation that is gaining traction in Congress.','Business','Financial Times','','','','01:12, 01/04/06','Doug Cameron in Chicago','handheld','','','3097895','69744','', '1');pd_om('msnbcom','100'); © 2006 MSNBC.com var url=location.href;var i=url.indexOf('/did/') + 1;if(i==0){i=url.indexOf('/print/1/') + 1;}if(i==0){i=url.indexOf('&print=1');}if(i>0){url = url.substring(0,i);document.write('URL: '+url+' ');if(window.print){window.print()}else{alert('To print his page press Ctrl-P on your keyboard \nor choose print from your browser or device after clicking OK');}} URL: http://msnbc.msn.com/id/12100666/ --------------------------------- How low will we go? Check out Yahoo! Messenger?s low PC-to-Phone call rates.