AFPAE Announces Increase in "Class" of Lawsuit Filed Against PBGC.

Business & Legal Editors

LAKE WORTH, Fla.--(BUSINESS WIRE)--April 9, 2001

Richard A. Brooks, the President of the Association of Former Pan Am Employees (AFPAE INC.) announced today that the number of employees covered under the Class Action Suit brought against the Pension Benefit Guaranty Corporation (PBGC) on November 24,1997, has almost doubled. With the advent of adding almost 40,000 former National Airline employees to the existing suit of 45,000 former Pan Am employees, brings the total group to approximately 85,000.

AFPAE's President Richard A. Brooks stated, that "it was outrageous for both PBGC headquarters and two of their Field Benefit Administrators to misinform former NAL employees who had called them, with questions about their pension benefits." That the former National Airline employees desperate experiences with the PBGC, a government agency set up to help and protect the retirees' pensions and their interest, came as no surprise to AFPAE, stated Mr. Brooks." We are used to being misinformed, lied to, and denied the rights that any other retiree is granted under ERISA law. We knew instinctively that the hundreds of former NAL employees who did not work for Pan Am, who contacted us for help, were being deceived by the PBGC. Till recently, we just could not get the agency to admit that they in fact were administering former National pension plans. Very few, if any, of these former NAL employees who did not also work for PAA, have yet received their Initial Determination Letters (IDL's). Thus, a decade or so later, IDL's setting forth the final determination of benefits they were to receive, have not been issued by this US government agency.

Additionally, due process such as their right to appeal the PBGC's decision on their pension payments has been denied. Based on the Pan Amer's experiences, many of PBGC's computations have been found to be flawed and in significant error.

Mr. Brooks stated that the 2nd US Circuit Court of Appeals is now in the process of hearing the PBGC's appeal of Judge Preskas third decision in AFPAE's favor. If the agency's appeal is denied, AFPAE's lawyers will go right to Discovery.

In other legal action, Mr. Brooks also stated today that "AFPAE has just been informed that a Washington, DC judge has ruled against Office Specialists (PBGC's outside contractor who administered the Pan Am pension plans from 1991-1998) on their motion to "dismiss" in AFPAE's "False Claims Lawsuit."

The false claims suit is based on allegations that certain Office Specialist Officers had a cozy relationship with certain PBGC Officials awarding the contract to administer the Pan Am and other terminated pension plans, as verified by the PBGC-IG's office, and the criminal investigations division of the GAO (Mr. Robert Hast) during joint Senate Committee hearings in September of 2000.

"We will continue to press forward on all fronts with our two lawsuits and support legislation which needs to bring about profound changes in the administration of the PBGC. In the meantime, we want to hear from as many former National Airlines employees who are now part of the "suit." They need to contact us to protect themselves and their families.