A glance at the elimination of employee pension plans by United Airlines:
Funds' Fate: Defined-benefit plans of the pilots, flight attendants, mechanics and machinists' unions, which currently are underfunded by $9.8 billion, could be shifted to the oversight of the government-funded Pension Benefit Guaranty Corp., a bankruptcy court judge ruled. The PBGC, itself already operating at a $23.3 billion deficit, is required to pay out only $6.6 billion of the total.
Employee Impact: 120,000 current and retired United workers are covered by the pensions, including 62,000 active employees. Many will lose thousands of dollars annually from their pensions; the pension agency caps the maximum yearly benefit at $45,613. Pilots dropped their opposition to the termination in January in exchange for a convertible note worth $550 million in a reorganized UAL Corp., United's parent.
What United Gains: A competitive boost financially with the elimination of billions of dollars in pension obligations, which it says will save it $645 million annually.
What Pension Agency Gains: Up to $1.5 billion in notes and convertible stock in UAL once it emerges from Chapter 11 bankruptcy, plus avoiding a lengthy court battle that could have added to its pension obligations had it lost.