The U.S. Airline Pilots Association is suing the Pension Benefit Guaranty Corp. to remove it as trustee of the US Airways pilots’ pension plan and appoint a temporary trustee, according to a news release from the union.
The Charlotte, North Carolina-based association claimed the PBGC breached its fiduciary duty by failing to investigate the company management of the plan, as required under Employee Retirement Income Security Act, when it took over the plan on March 31, 2003.
US Airways Group Inc. terminated the plan while in Chapter 11 bankruptcy proceedings. At that time, the plan had $1.2 billion in assets to cover $3.7 billion in liabilities. The PBGC took responsibility for $726 million of the shortfall.
The lawsuit was filed in U.S. District Court in Washington.
“The PBGC has not fulfilled its obligation as trustee of our pilots’ retirement fund,” USAPA president Mike Cleary said in the news release. “Our own investigation has uncovered a number of questionable circumstances surrounding activities and investments of our retirement fund prior to its termination. Our request to the PBGC for a thorough investigation has fallen on deaf ears, so we are asking the court to appoint a trustee who will do its due diligence in this matter and investigate the management, or perhaps the mismanagement, of our pilots’ retirement fund.”
A PBGC spokesman declined comment on the lawsuit.