NWA Says Bill Gives Time To Save Pensions

So much for the opposition. CFO.com reports that by a somewhat lopsided vote of 95-5, the Senate late Thursday night passed the Pension Protection Act -- a pension reform bill aimed at making it easier for cash-strapped airlines to repay their pension funds.

Supporters of the bill -- which now goes to President Bush for approval -- say the new legislation bolsters existing pension funding rules, by requiring companies to repay their pension obligations within seven years. Detractors of the bill maintained the legislation favors airlines that have chosen to freeze their pension funds, by giving those entities a total of 17 years to make good on the funds.

One airline seen as benefiting from the bill, Northwest Airlines, expressed its gratitude shortly after the bill was passed.

"On behalf of the 73,000 participants in Northwest Airlines' pension plans, and the families that depend on them, we thank all of the members of the House and the Senate that supported this important legislation," said Northwest President and CEO Doug Steenland to Aero-News. "While there have been many people involved in this effort, Northwest and its employees would like to especially thank the broad, bi-partisan coalition [from] legislators."

Along with Continental Airlines and similarly troubled Delta Air Lines, Northwest has negotiated pension plan freezes with its unions, which would also freeze the liability for the Pension Benefit Guaranty Corporation (PBGC) -- thus giving the airline more time to repay the funds currently obligated.

"With employees making the difficult decision and sacrifice to freeze their pension plans, all of us looked to Congress for the additional time required to save our plans," said Andrea Fischer Newman, senior vice president of government affairs. "Tonight, the legislative branch of our government has spoken and protected airline employees' retirement benefits and U.S. taxpayers."

The pension bill was the last piece of legislation passed by the Senate before lawmakers left for a month-long recess.

FMI: www.senate.gov, www.nwa.com