The pension plans for United Airlines employees and retirees received a $135 million boost after the federal agency that controls them sold half its stake in the airline.
The Pension Benefit Guaranty Corp. will transfer to the plans about 30 percent of the $450 million it received from the sale, PBGC spokesman Gary Pastorius said Wednesday.
UAL Corp.’s United shifted its pension plans, which should have been worth $16.8 billion and were underfunded by $9.8 billion as of April 2005, to the agency while in bankruptcy.
The PBGC, a quasi-federal agency that insures defined-benefit pensions, received its stake in UAL in exchange for taking over the pensions. It will contribute $6.6 billion to the plans to make up for part of the underfunding. That leaves United’s employees, before the transfer from the stake sale, with pensions worth $3.2 billion less than they were promised.
The agency disclosed Tuesday in a filing with the Securities and Exchange Commission that it now owns 11.1 million UAL shares and expects to receive additional stock after United, the world’s second-largest airline, settles with all its creditors. The agency also has 5 million convertible UAL preferred shares, the filing said.
