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Benefits September 9, 2005
Northwest Airlines Freezes Pension Plans
September 9, 2005 (PLANSPONSOR.com) - Northwest
Airlines has frozen two pension plans that cover salaried
employees, Business Insurance reports.
Reported by Rebecca Moore
Northwest’s filing with the Securities and Exchange Commission says that participants’ benefits accruals were frozen as of August 31. The filing also said, according to Business Insurance, that participants who become disabled after August 31 will not be covered under the disability retirement provisions of each plan.
Northwest proposed the freezing of its defined benefit plans and moving employees to a defined contribution program in March in order to cut costs (See Northwest Airlines Latest to Propose DB to DC Move ).
The freezing of Northwest’s plans follows the trend of terminating pension plans for the financially struggling airline industry.
United Airlines and US Airways have already handed over pension plans to the Pension Benefit Guaranty Corporation (SeeUnited, PBGC Hammer Out Plan Takeover Pact and PBGC-US Airways Pension Deal Gets Court Signoff ), while Delta Airlines pension program faces a $5 billion shortfall.