Compliance October 3, 2006

PBGC Takes Over Levitz Home Furnishing Plan

October 3, 2006 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) has announced it has assumed responsibility for the Levitz Furniture Corp. Employees' Retirement Plan.
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According to the announcement, the plan is sponsored by the bankrupt furniture retailer Levitz Home Furnishing, Inc. of Woodbury, New York. The plan, frozen since 1996, covers more than 1,600 participants. Retirees currently receiving checks will continue to receive them without interruption, the agency said.

The PBCG said in its announcement that it stepped in because the pension plan faced abandonment. Levitz had sold most all of its assets to Prentice Capital Management LP in a transaction that did not include the pension plan.

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The plan is 70% funded, with $55.5 million in assets to cover $79 million in promised benefits, according to PBGC estimates.  The agency said it expects to be liable for the entire shortfall, but this will have no material effect on its balance sheet.

Within the next several weeks, the PBGC will send trusteeship notification letters to all plan participants. Workers and retirees with questions may consult the PBGC Web site, www.pbgc.gov or call 800-400-7242.

Administration October 2, 2006

Report: Delta Offers Pilots $300M Note to Kill Pension

February 10, 2005 (PLANSPONSOR.com) - Delta Air Lines, struggling mightily like many of its aviation brethren to survive, has reportedly offered to give pilots a note worth $300 million in exchange for being able to terminate the pilots' radically underfunded pension plan.
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Citing unnamed sources, the Wall Street Journal said that turning over the interest-bearing note to the pilots is part of the air carrier’s latest contract offer and is predicated on the company’s possible eventual decision to turn over the $1.89 billion pension plan to the Pension Benefit Guaranty Corporation, which insures private-sector pensions. According to the Journal, the Delta pilots’ plan is only 47% funded.

The Atlanta-based carrier said it has made no decision on whether to terminate the plan. A Delta spokesman, Anthony Black, told the Journal that Delta “has not told the pilots that it plans to terminate the pension plans,” but added, “we’re continuing to work hard to save our employee pensions.”

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The fate of the pension plan is likely to dominate contract talks, that resumed Tuesday and face a mutually agreed upon deadline next month, on concessions Delta says it needs as part of its bankruptcy-court restructuring.

John Culp, an Air Line Pilots Association spokesman, told the Journal that any payment that Delta pilots would get in return for terminating their pension plan would be a fraction of what the airline would save by escaping its obligations. The union represents about 6,000 Delta pilots, who make an average salary of about $146,000 a year, according to the company.

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