Federal Pension Agency Says It May Sue TWA Chief

The government may resort to suing Trans World Airlines owner Carl Icahn to cover more than $1 billion in pension payments to retired employees of the troubled company, the head of a federal agency said Sunday.

The Pension Benefit Guaranty Corp. has told Icahn that he must fully finance a $1.2-billion gap in pension plans for retired TWA pilots and machinists or face lawsuits that could wipe out his fortune, said the agency’s executive director, James B. Lockhart III. The agency insures workers’ retirement funds.

Icahn, one of the wealthiest men in America, owns more than 80% of TWA. The airline earlier this year sought protection from creditors in bankruptcy court but still must pay employee pension benefits.

Icahn’s personal financial statement showed a net worth of $989 million in August.

Icahn, according to a story in Sunday’s Washington Post, has argued that he is responsible for only $200 million in payments, but the PBGC has insisted that he eliminate the entire $1.2-billion pension shortfall.

TWA’s pension plans are short of funds because it raised the benefits faster than it increased its contributions to the plans, which cover 32,000 employees.