United Air Lines' machinists oppose independent fiduciary agreement, want it amended

By Jeff Pines

Washington, Sept. 13 - The International Association of Machinists and Aerospace Workers wants the proposed agreement between United Air Lines Inc. and Independent Fiduciary Services amended. If the court approves, IFS will be the fiduciary for the airline's pension plans.

The limited objection was filed Friday with the U.S. Bankruptcy Court for the Northern District of Illinois.

The union, which represents more than a third of the airline's employees, said the agreement as proposed would deprive IFS of the authority envisioned in the agreement the airline struck with the Labor Department.

According to the union, the proposed agreement would prevent IFS from pursuing likely breaches of the Employee Retirement Income Security Act not related to post-Chapter 11 contributions. The act covers employee pension plans. But the United-Labor Department agreement is supposed to empower the fiduciary to pursue "any potential breaches of fiduciary duty by any party that it may uncover," the IAM said.

Another example the union cited is that the United-IFS agreement would limit IFS' enforcement abilities to contribution issues, whereas the United-Labor Department agreement calls for the fiduciary to enforce funding or contribution provisions of the pensions, funding policy, the Employee Retirement Income Security Act and the Internal Revenue Code.

A Sept. 17 hearing is scheduled.

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

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