WorldCom’s Pension Plan Draws Warning

WorldCom Inc.’s plan to reorganize has inadequate safeguards for its pension funds, which are underfunded by $281.3 million, a U.S. agency said in a Bankruptcy Court filing.

The Pension Benefit Guarantee Corp. objected to WorldCom’s plan because it failed to explicitly state that the reorganized company would maintain the pension funds and attempted to exclude some beneficiaries.

Ashburn, Va.-based WorldCom, the No. 2 U.S. long-distance telephone carrier, believes its intention to assume the plans is clear but wants to drop obligations to employees connected to the scandal that led to its bankruptcy.

PBGC said its lawyers were negotiating with WorldCom to resolve the issues but filed the objection with the Bankruptcy Court in case those talks fail.