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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

United defends deal ending pension plan

Associated Press

CHICAGO — Entering a critical phase in its bid to get out of bankruptcy, United Airlines on Monday defended its plan to hand off employee pension fund obligations to the government’s pension insurer as a “landmark achievement” in its restructuring.

Unions, however, continued to raise the possibility of striking the carrier if it dumps the pensions and has labor contracts rewritten to further reduce pay and benefits without their consent.

The latest sparring came on the eve of a Tuesday hearing in U.S. bankruptcy court on the controversial pension deal. If approved by a judge, the result will be the largest pension default in U.S. history, with United workers losing about a quarter of their total pensions once they are shifted to the Pension Benefit Guaranty Corp.

In a 300-page court filing Monday, United emphatically stated its case for terminating the defined-benefit pensions. It reiterated that eliminating the pensions is a necessary step that would save it billions — more than $4.4 billion of funding contributions over six years and $1.7 billion in potential claims against it.

The pensions are underfunded by an estimated $9.8 billion.

“The global settlement between United and PBGC is a landmark achievement in United’s restructuring,” the company, a unit of UAL Corp., said in the filing.