Agreement Will Cover Shortfalls Following Emergence From Bankruptcy
Hawker Beechcraft has reached a deal with an ad hoc group of former employees who retired from salaried positions with the company to cover a shortfall in their pensions when the plan is taken over by the government's Pension Benefit Guaranty Corporation.
The company will set aside $250,000 over 10 years to cover the reduction in pension that will come from the government takeover. The deal affects about 70 of the planemaker's employees who would see their benefits reduced. The PBGC is limited to paying $56,000 per year for a 65-year-old retiree. The agreement reached this week specifies that employees who have not yet reached 65 will not be eligible to draw from the fund until they they reach that age.
The Wichita Eagle reports that the company will also cover the legal fees incurred by the retirees group, amounting to about $80,000.
While all the details are still being finalized, Hawker Beechcraft spokeswoman Nicole Alexander said the two parties have reached an "agreement in principle" which is subject to approval by the bankruptcy judge overseeing the case.
Hawker Beechcraft will reportedly send individual notices to the affected retirees, who had opposed the PBGC's takeover of the pension plan saying their benefits would be greatly reduced.