Judge OKs request to consolidate Hawker pension claims
09/15/2012 8:05 AM
08/08/2014 10:12 AM
A U.S. bankruptcy judge has approved a request by the Pension Benefit Guaranty Corp. to file consolidated proofs of claims for three pension plans covering Hawker Beechcraft employees and retirees.
The cases are being consolidated for procedural purposes and are being jointly administered, the court filing said.
The general deadline for filing claims against Hawker Beechcraft was Friday. The deadline for “governmental units” to file proofs of claims is Oct. 30.
The PBGC is a federal agency that administers the defined benefit pension plan termination insurance program.
The agency pays the benefits, but with caps, when an employer is no longer able to pay.
Hawker Beechcraft filed for Chapter 11 bankruptcy May 3.
The company warned at the time that it may have to terminate the pension plans as it goes through the bankruptcy.
Its three plans are 56 percent funded, with $769 million in assets to cover $1.4 billion in anticipated obligations.
The company is a sponsor of a retirement income plan for hourly paid employees, a base retirement income plan and a plan for salaried employees.
The PBGC and Hawker Beechcraft agreed in principle last month for the agency to take over the administration of two of the three pension plans, those for nonunion and salaried employees and retirees. That is subject to court approval.
The company is asking the court to terminate its base and salaried pension plans and for the PBGC, rather than the company, to pay the benefits to vested participants.
Hourly-paid workers and retirees covered under the Machinists union labor contract are not affected by the agreement with the PBGC.
Last month, union members voted to approve a company proposal that retains the pensions, but freezes accruals beginning Dec. 31. It also creates a new Retirement Income Savings Plan.
The PCBG’s request to the court to consolidate proofs of claims does not change the terms of the agreement between the Machinists and Hawker Beechcraft, said union spokesman Frank Larkin.
“That’s a procedural and quite routine step for both the court and the PBGC,” Larkin said. “It’s not an issue for us. It’s not an issue to be resolved for us.”
Without the ability to consolidate, the PBGC would have had to file 216 separate proofs of claims with the court, the filing said.
“These multiple claims would impose a significant administrative burden on the Debtors, the Debtors’ claims agent, PBGC and the court,” the filing said.
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