More Pension promises die in bankruptcy

Just as the Monsanto retirees found out – pension plans aren’t written in stone. Companies can file bankruptcy and get out of those obligations. Ask the Delta Air Lines retirees.

Yesterday upheld an order approving Delta Air Lines Inc.’s request to terminate its pilots’ pension plan. Cote ruled that Delta met its burden of proving that the pension termination was necessary as part of its effort to emerge from bankruptcy.

Meanwhile according to AP reports:

Delta and the Pension Benefit Guaranty Corp. reached a settlement over some key issues related to the carrier’s request to terminate its pilots’ pension plan. Under the agreement, the government’s pension insurer would get an unsecured claim of $2.2 billion against the carrier. That would put it in line with other unsecured creditors for compensation after Delta emerges from bankruptcy. But unsecured creditors typically recover only a fraction of what they are owed.