Pension Reforms Bill Provides Relief to Employees of Airlines in Bankruptcy

On August 17, 2006, President George W. Bush signed into law a pension reform bill which he called the "most sweeping reform" of U.S. pension law since the enactment of the Employee Retirement Income Security Act (ERISA) in 1974.  The new law is intended to close loopholes in the pension system and provides deadlines for employers to fully fund their pension plans as promised to their employees. 

The new law enlarges the funding compliance deadline for airline companies in bankruptcy proceedings that have frozen their pension plans (an act that prevents participants from receiving new benefits); they would obtain an extra 10 years to meet their funding obligations. “Given the Jan. 1, 2008, effective date and an additional 7-year transition, Northwest and Delta would ultimately have until 2025 to pay off their pension debts.”  Excerpt from www.knowyourpension.org