ATLANTA, Oct. 12, 2011 /PRNewswire/ -- The Delta Pilot's Pension Preservation Organization (DP3, Inc.), a group representing the interests of over 6,000 retired Delta pilots, is preparing to file an administrative appeal with the Pension Benefit Guaranty Corporation (PBGC) aimed at recovering approximately $600 million in lost qualified pension benefits.
The consolidated appeal, currently scheduled to be filed on October 28 by the Washington, D.C. based law firm Miller &Chevalier Chartered, will challenge the rules the PGBC applied when calculating final benefits for over 3,500 retired Delta pilots. DP3 contends that PBGC's internal procedures have artificially reduced retired Delta pilots' benefits by an estimated $600 million; this equates to an average loss of approximately $1,200 per month for affected pilots.
The PBGC assumed roughly $2 billion in assets from the Delta Pilots Pension Plan (DPPP) in 2006 following Delta Air Lines' bankruptcy filing and the bankruptcy court approved termination of its pilot pension plan. In addition to plan assets, the PBGC also recovered at least $1.28 billion from Delta during the airline's bankruptcy proceedings. However, due to procedures designed to artificially reduce the earned and funded benefits of retirees, the PBGC is currently shortchanging thousands of retirees. In addition, five years after the termination of the pension plan, the PBGC still has not calculated the benefits for hundreds of retired Delta pilots.
"Due to PBGC delays, we've had over five years to prepare for our consolidated appeal," said DP3 Chairman Will Buergey, who retired from Delta in 2004 as aB-777 Captain. "Retired Delta pilots have lost hundreds of millions of dollars in benefits due to PBGC errors and internal decisions specifically calculated to deny paying earned benefits to retirees. The terminated pension plan had sufficient funds to pay these benefits, and we are determined to see our members receive the benefits they earned over decades of service to Delta Air Lines."
Among the issues being appealed is the PBGC's use of look-backs on IRS pension limitations as these rules apply to Delta Pilot Plan Participants. "The look-back provisions applied by the PBGC severely penalize a large group of retired Delta pilots and contradict the intent of ERISA law," said Buergey.
While other airlines' pilot groups have appealed the PBGC's Final Benefit Determinations, the Delta case is unique. Despite the detailed paperwork required to file an appeal, DP3 successfully collected information from thousands of geographically dispersed retirees.
"Ten years ago, organizing a group of retired pilots living in all corners of the country wouldn't have been possible," said Buergey. "But the electronic age has helped us find pilots who had given up hope of recouping their lost pensions. Through software our volunteers developed in-house, we enabled retirees to seamlessly provide our legal team and actuaries with the data needed to appeal their benefits. We believe there's strength in numbers when challenging an organization like the PBGC, and we've left no stone unturned in our efforts."
DP3's legal team is being led by Anthony Shelley of Miller & Chevalier Chartered. Shelley was recently named one of the best ERISA litigators in the U.S. in the 2012 edition of The Best Lawyers in America®.