Federal pension agency balances its budget, but at whose expense?OCEANSIDE, N.Y.--(BUSINESS WIRE)--April 3, 1997-- Note to Editors: The following is a statement by the Association of Former Pan Am Employees, Inc. The Pension Benefit Guaranty Corp. ("PBGC PBGC See: Pension Benefit Guaranty Corporation "), the federal government agency which insures traditional pension plans, recently announced that it showed a budget surplus for the first time in more than twenty years TWENTY YEARS. The lapse of twenty years raises a presumption of certain facts, and after such a time, the party against whom the presumption has been raised, will be required to prove a negative to establish his rights. 2. . President Clinton and other government officials heralded this event with great fanfare. However, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Richard A. Brooks, president of the Association of Former Pan Am Employees (AFPAE), President Clinton failed to mention that part of this surplus was achieved at the expense of the very people that the PBGC is required by law to protect. Some of those people, Brooks says, are former employees of Pan American World Airways Pan American World Airways, commonly known as Pan Am, was the principal international airline of the United States from the 1930s until its collapse in 1991. Founded as a seaplane service out of Key West, Florida, the airline became a major company credited with many who were denied full benefits when the plan was terminated in July of 1991. Pan Am closed down in December of 1991. Brooks says that when a defined benefit pension plan is terminated and the plan has insufficient funds to pay all benefits due, PBGC is mandated to make up the shortage and pay the remaining benefits to affected plan members. He says PBGC's "balanced budget Balanced budget A budget in which the income equals expenditure. See: budget. balanced budget A budget in which the expenditures incurred during a given period are matched by revenues. " was created by paying out less benefits to the participants than the amount of premiums it collects from ongoing plans. "PBGC's current surplus results in part from a policy of underpaying many plan participants Plan participants Employees or other beneficiaries who are eligible to receive benefits from a company's employee benefit plan. , while frustrating their attempts to appeal its decisions to do so," Brooks says. He says PBGC has delayed AFPAE's ability to take the case to court, by refusing to issue final determination letters. AFPAE represents more than 13,000 former Pan Am employees who were entitled to receive enhanced early retirement benefits under the Pan Am Corporate Retirement Income Plan ("CRIP"). Brooks said, that since 1991, PBGC has refused to issue a final letter of determination of those benefits while paying a lesser pension to these retirees. Brooks says AFPAE members believe PBGC's conduct regarding Pan Am employees is reflective of an agency policy to balance its budget at the expense of the individual participants it was formed to protect. "PBGC has lost sight of its original mission - to protect participants against loss of their pension benefits," he says. "PBGC's unconscionable Unusually harsh and shocking to the conscience; that which is so grossly unfair that a court will proscribe it. When a court uses the word unconscionable to describe conduct, it means that the conduct does not conform to the dictates of conscience. delays of 5 1/2 years since the CRIP Plan was terminated, have caused plan participants to suffer incredible hardships. They have been forced to put their entire lives on hold," Brooks says. According to information gathered from AFPAE members and their families, at least 11 suicides and 379 fatal heart attacks have resulted over the past 68 months. As a result plan participants have filed a class action suit in the Federal District Court, Southern District of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of to replace PBGC as trustee of the CRIP plan with an independent, impartial third party. For more information concerning AFPAE's lawsuit against PBGC please contact its president, Richard Brooks, at 516/678-6894, e-mail address See Internet address. e-mail address - electronic mail address afpaeinc@aol.com or their attorney Harvey M. Katz at Berlack, Israels, & Liberman: phone 212/704-0100, e-mail address Katzhm@Berlack.com . CONTACT: Association of Former Pan Am Employees, Inc. Richard Brooks, 516/678-6894 e-mail: afpaeinc@aol.com or Berlack, Israels, & Liberman Harvey M. Katz, 212/704-0100 e-mail: Katzhm@Berlack.com |
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