United Air Lines signs deal with U.S. Labor Dept. to appoint a pension plan fiduciary

By Jeff Pines

Washington, Aug. 17 - United Air Lines agreed to appoint an independent fiduciary to oversee its four pension plans, the U.S. Labor Department said Tuesday. The plans cover nearly 120,000 people.

"United Airlines' decision to stop funding its pension plans made clear the need to appoint an independent fiduciary to represent the interests of workers and retirees," said U.S. Secretary of Labor Elaine L. Chao in a news release. "This agreement ensures that workers' interests are protected."

United, whose parent is UAL Corp., will be able to select the fiduciary, but the choice is subject to Labor Department approval.

The fiduciary will be able to review the funding policy of the plans, assert claims and file a lawsuit if necessary on behalf of the plans over funding and contribution issues.

In June, the UAL's board changed the structure for managing its retirement plans by eliminating the plans' administrative committee and appointing UAL as the sole fiduciary for the plans.

On July 15, UAL passed on paying a required $72 million contribution to three of the plans. On July 23, the company announced that it would not make any of its legally and contractually required contributions to the plans while still in bankruptcy.

Another payment of $400 million is due on Sept. 15. Under the department's agreement, UAL must have an independent fiduciary in place before Sept. 15.

The company filed for Chapter 11 bankruptcy on Dec. 9, 2002. Its Chapter 11 case number is 02-48191.

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