Delta’s Pensions Not Fully Funded

Delta Air Lines Inc., which filed for bankruptcy protection Wednesday, has pension plans that are $10.6 billion underfunded, said a spokesman for the U.S. agency that insures pensions.

Should Delta decide to terminate its pension plans, the Pension Benefit Guaranty Corp. would be liable for $8.4 billion of the underfunding, a spokesman for the agency said.

The $2.2-billion difference is the amount of benefits that employees would lose if Delta decided to terminate the plans, spokesman Randy Clerihue said.

He said the agency hoped Delta and Northwest Airlines Corp., which also filed for bankruptcy protection Wednesday, would continue to meet pension obligations, even in bankruptcy.

“However, if they don’t and the pension plans terminate, the deficit of the pension insurance program would grow by several billion dollars,” Clerihue said.

The pension agency takes over failed pension plans and pays benefits, up to certain limits. Its deficit is currently $23.3 billion.

Clerihue said he did not have a number for pension underfunding at Northwest Airlines that he could release. Northwest said Wednesday that it would be required to contribute $3.3 billion to its defined-benefit plans from 2006 through 2008.

Congress has been considering bills to repair underfunding and shore up the federal agency. Some lawmakers say it is important to offer the airlines an alternative to dumping their pensions, by giving them the chance to stretch out payment of their liabilities instead.