US Airways Seeks to Spread Out Pension Payments
August 16 2004 - 5:00PM
PR Newswire (US)
US Airways Seeks to Spread Out Pension Payments ARLINGTON, Va.,
Aug. 16 /PRNewswire-FirstCall/ -- US Airways today said it will ask
the Internal Revenue Service (IRS) for authority, as permitted
under IRS rules, to reschedule contributions to the defined benefit
pension plans for the Association of Flight Attendants (AFA) and
the International Association of Machinists (IAM), representing
mechanical and related employees. "Rescheduling these payments will
help US Airways to conserve its cash so that we have sufficient
liquidity to operate the airline," said Jerry Glass, US Airways
senior vice president of Employee Relations. "This is an important
step as we work to ensure our survival and future prosperity." A
letter has been sent to employees in both work groups explaining
the company's action. The two plans would be treated the same under
the proposed payment rescheduling. Under IRS rules, US Airways is
required to make contributions of approximately $67.5 million total
to the AFA and IAM plans for the 2004 plan year. If the application
for a waiver is approved, the company will be able to spread out
these contributions for the 2004 plan year for up to five years,
rather than the 18 months during which the contributions otherwise
would have been made. Because US Airways already has contributed
$28.6 million to the AFA and IAM plans during 2004, the company
intends to apply that amount toward the last 2003 plan year
payment, which is due on Sept. 15. The proposed payment
rescheduling would have no impact on retirees. For current
employees, pension benefits will still begin when an employee
retires and continue throughout the employee's lifetime.
DATASOURCE: US Airways CONTACT: US Airways Corporate Affairs,
+1-703-872-5100 Web site: http://www.usairways.com/
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