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Bankruptcy judge delays ruling on Hawker Beechcraft pensions until Jan. 31

  • The Wichita Eagle
  • Published Thursday, Jan. 24, 2013, at 4:13 p.m.

In a hearing Thursday, a U.S. bankruptcy judge postponed ruling on Hawker Beechcraft’s three pension programs until Jan. 31.

That’s also when the judge will look at whether to confirm Hawker Beechcraft’s plan to emerge from Chapter 11 bankruptcy protection.

If approved, the company plans to emerge from bankruptcy in the last half of February. Hawker Beechcraft filed for Chapter 11 bankruptcy on May 3.

The company has asked the court to terminate two of its retirement plans — a salaried plan and a base retirement plan — and for the Pension Benefit Guaranty Corp. to take them over and pay benefits to vested participants.

Hawker Beechcraft has asked the court to allow it to continue a benefit plan for hourly workers in an agreement reached with the Machinists union last year.

Under the agreement, accruals for the hourly workers were to be frozen at the end of 2012 and a new Retirement Income Savings plan created. That plan would continue to operate after Hawker Beechcraft emerges from bankruptcy.

The judge also postponed ruling on a proposed settlement with an ad hoc group of retired salaried employees.

“We continue working out the details on the settlement with the Ad Hoc Retiree committee, so it was determined that the pension topic will be considered on the 31st instead,” Hawker Beechcraft spokeswoman Nicole Alexander said in an e-mailed statement.

Under the settlement, Hawker Beechcraft would set aside $250,000 a year for 10 years to cover shortfalls recipients represented by the ad hoc group would lose as a result of the company’s bankruptcy reorganization, according to a court filing.

The settlement covers about 70 former salaried employees whose benefits would exceed caps the PBGC sets on how much a retiree can collect in a year.

The PBGC will pay retirement benefits up to a legal limit of about $56,000 a year for a 65-year-old, according to the agency.

Hawker Beechcraft also agreed to pay $80,000 for fees and expenses for legal counsel incurred by the ad hoc retiree group, according to a court filing.

The deal is subject to approval by the judge.

Contact Molly McMillin at 316-269-6708 or mmcmillin@wichitaeagle.com

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