Benefits June 19, 2006

Delta to Request Termination of Pilots' Pension Plan

June 19, 2006 (PLANSPONSOR.com) - Delta Air Lines Inc. will file a request Monday to terminate its pilots' pension plans, the Associated Press reports.
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In a letter to Senator Johnny Isakson (R-Georgia) that was also sent to other members of Congress, Delta CEO Gerald Grinstein said the company will seek termination of the pilots’ plan effective September 2, according to the AP.

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Delta’s intent to terminate the plan has been known, and a bankruptcy court has already approved a settlement between Delta and its pilots union that would give the pilots $650 million in notes, conditioned on termination of the pilots’ retirement plan and a $2.1 billion unsecured claim to fund “follow-on retirement plans and other payments or distributions to pilots” (See Judge Gives Nod to Delta’s Settlement with Pilots Union ).

The Pension Benefit Guaranty Corporation (PBGC) has appealed the bankruptcy court decision, contending that, according to the Employee Retirement Income Security Act (ERISA), the compensation should go to the agency if the plan is terminated (SeePBGC Appeals Court Decision on Delta Pilots Contract).

Once the notice of the termination request is sent to the PBGC, a judge will have to approve that decision as well. The AP notes there will likely be objections, though the pilots have agreed not to object.

Grinstein said in his letter to the legislators that the company hopes pension reform will soon be passed by Congress, so that other pension plans might be salvaged.

Compliance June 16, 2006

Worker Who Fell Returning from Lunch is Entitled to Benefits

June 16, 2006 (PLANSPONSOR.com) - In a unanimous ruling, the Maine Supreme Judicial Court ruled that a worker who hurt herself while returning to work from lunch is entitled to benefits.
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The ruling affirms a previous decision by a Workers’ Compensation Board that Aetna appealed, according to the Associated Press. The court agreed with the board’s decision that the common staircase leading to Aetna’s offices could be considered part of Aetna’s premises since it constituted a type of right of passage through which the employer had something equivalent to an easement, the AP said.

The state’s high court considered whether Robyn Fournier should be subject to the “going and coming rule,” an established workers’ compensation principle that provides that an accident occurring off an employer’s premises while the employee is merely on his way to or from work is not compensable. It also considered Aetna’s argument that Fournier was not entitled to benefits because her injury did not arise out of or in the course of her employment.

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The justices of the court again agreed with the board decision that she was entitled to benefits because the activity which led to the injury “was an insubstantial deviation from her employment,” did not violate work rules and was not reckless.

In a recent ruling by the 7th US Circuit Court of Appeals, appellate judges found that a company was justified in denying accident disability benefits to an employee who fell in the restroom because going to the restroom can be excluded from an employee’s job responsibilities (See Case Sensitive: Duty Bound? ).

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