Group Seeks To Regain Over $600 Million In Pension Benefits It
Says Was Lost During Delta Bankruptcy
The Delta Pilot's Pension Preservation Organization (DP3, Inc.),
a group representing the interests of over 6,000 retired Delta
pilots, is preparing to file an administrative appeal with the
Pension Benefit Guaranty Corporation (PBGC) aimed at recovering
approximately $600 million in lost qualified pension
benefits.
The consolidated appeal, currently scheduled to be filed on
October 28 by the Washington, D.C. based law firm Miller &
Chevalier Chartered, will challenge the rules the PGBC applied when
calculating final benefits for over 3,500 retired Delta pilots. DP3
contends that PBGC's internal procedures have artificially reduced
retired Delta pilots' benefits by an estimated $600 million; this
equates to an average loss of approximately $1,200 per month for
affected pilots.
The PBGC assumed roughly $2 billion in assets from the Delta
Pilots Pension Plan (DPPP) in 2006 following Delta Air Lines'
bankruptcy filing and the bankruptcy court approved termination of
its pilot pension plan. In addition to plan assets, the PBGC
also recovered at least $1.28 billion from Delta during the
airline's bankruptcy proceedings. However, due to procedures
designed to artificially reduce the earned and funded benefits of
retirees, the PBGC is currently shortchanging thousands of
retirees. In addition, five years after the termination of
the pension plan, the PBGC still has not calculated the benefits
for hundreds of retired Delta pilots.
"Due to PBGC delays, we've had over five years to prepare for
our consolidated appeal," said DP3 Chairman Will Buergey, who
retired from Delta in 2004 as aB-777 Captain. "Retired Delta pilots
have lost hundreds of millions of dollars in benefits due to PBGC
errors and internal decisions specifically calculated to deny
paying earned benefits to retirees. The terminated pension
plan had sufficient funds to pay these benefits, and we are
determined to see our members receive the benefits they earned over
decades of service to Delta Air Lines."
Among the issues being appealed is the PBGC's use of look-backs
on IRS pension limitations as these rules apply to Delta Pilot Plan
Participants. "The look-back provisions applied by the PBGC
severely penalize a large group of retired Delta pilots and
contradict the intent of ERISA law," said Buergey.
While other airlines' pilot groups have appealed the PBGC's
Final Benefit Determinations, the Delta case is unique.
Despite the detailed paperwork required to file an appeal, DP3
successfully collected information from thousands of geographically
dispersed retirees.
"Ten years ago, organizing a group of retired pilots living in
all corners of the country wouldn't have been possible," said
Buergey. "But the electronic age has helped us find pilots who had
given up hope of recouping their lost pensions. Through
software our volunteers developed in-house, we enabled retirees to
seamlessly provide our legal team and actuaries with the data
needed to appeal their benefits. We believe there's strength
in numbers when challenging an organization like the PBGC, and
we've left no stone unturned in our efforts."