US Airways Pilots Still Fight for Pension Payouts, 11 Years After Bankruptcy Case
Eleven years later, the court battles are still being fought after two groups of pilots sued the government-backed Pension Benefit Guaranty Corp., which took over the plan.
In one case, the US Airline Pilots Association, which represents US Airways pilots, contends that the agency -- as the plan's trustee -- should have investigated and pursued wrongdoing that occurred before the takeover occurred. A decision could come any day.
In the other case, the Soaring Eagles -- a group of mostly retired 1,700 pilots -- have challenged the agency's interpretation and calculations of how benefits should be paid out. The interpretations deprive retirees of thousands of dollars per month, the Soaring Eagles said. Two courts have rejected their arguments. In a last-ditch effort, the Soaring Eagles now hope to convince the Supreme Court to hear the case.
During the round of airline bankruptcies and consolidations that has occurred in the first 15 years of the 21 st century, no major airline pilot group has paid a higher price than pilots from the former Crystal City, Va.-based US Airways. The pilots lost their pensions, worked for industry-low wages for a decade and suffered from a controversial seniority ruling following a 2005 merger with America West Airlines.
The wage disparity was generally addressed in the 2013 merger with American Airlines
Still, for many, the loss of pension benefits has been the worst blow, although it has been mitigated to an extent because in 2007 the Federal Aviation Administration raised the mandatory retirement age for U.S. pilots to 65 from 60.
The US Airways pilot pension plan had about 7,000 participants when it was terminated in 2003, according to the PBGC, while plan assets were valued at $1.2 billion. "PBGC expects to pay $1.7 billion in benefits," said agency spokesman Marc Hopkins. "That means PBGC will pay about a half billion dollars to participants from its insurance funds to make up the shortfall."
USAPA's case was filed in U.S. District Court in Washington 2009. The case alleges gross misconduct by officials who oversaw the plan before the PBGC took it over. Dave Westberg, a 28-year US Airways pilot who is chairman of the pension investigation committee, said a 20-year pilot who expected to retire at 60 with a pension of about $96,000 annually will instead collect $28,000 annually as a result of the plan's termination.