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PBGC, CREDITORS AND UNIONS REACH ACCORD ON TWA PENSIONS

 PBGC, CREDITORS AND UNIONS REACH ACCORD ON TWA PENSIONS
 WASHINGTON, Oct. 29 /PRNewswire/ -- The Pension Benefit Guaranty Corporation and Trans World Airlines' creditors and unions today reached an agreement that resolves pension issues, keeps jobs secure and strengthens the airline.
 "This is a major step that will protect the pensions of TWA's 40,000 workers and retirees and clears the way for additional financing that will keep the airline flying and people working," said Secretary of Labor Lynn Martin, chairman of PBGC's board of directors.
 The agreement, which finalizes the terms reached earlier this month with the creditors, now has the consent of TWA's unions. It requires TWA to issue two 15-year notes, totaling $300 million, for a portion of the $1.2 billion pension underfunding in the two plans insured by PBGC -- the Retirement a?n for Pilots of TWA and the Retirement Plan for Employees of TWA. The notes would be secured by all of TWA's international routes and its Kansas City maintenance base.
 The agreement also calls for the termination of the plans just prior to TWA's emergence from bankruptcy. The timing allows PBGC to pursue TWA's current owner, Carl Icahn, and the other companies under his control for the full $1.2 billion pension underfunding.
 "Although PBGC, the creditors and the unions found a way to resolve TWA's pension issues, Mr. Icahn has still failed to submit a settlement offer commensurate with the magnitude of his pension liability. However, the door remains open for Mr. Icahn to offer a settlement that would keep both the pension plans and the airline ongoing," said PBGC Executive Director James B. Lockhart.
 The U.S. Bankruptcy Court today approved debtor-in-possession financing


that is consistent with the agreement signed by PBGC. "The financing provided by the creditors is very helpful. It allows time to obtain long-term financing or for Mr. Icahn to make a viable settlement proposal," said Lockhart.
 The term sheet outlining the agreement is to be submitted promptly to the bankruptcy court for its approval.
 PBGC is a federal agency created by ERISA to guarantee payment of basic pension benefits earned by American workers and retirees participating in private defined benefit pension plans. PBGC administers two insurance programs, which cover more than 40 million American workers and retirees in about 85,000 pension plans.
 -0- 10/29/92
 /CONTACT: Judith E. Bekelman, director of communications and public affairs, or Andy Gasparich, public affairs officer, Pension Benefit Guaranty Corporation, 202-778-8840/ CO: Pension Benefit Guaranty Corporation; Trans World Airlines ST: District of Columbia IN: INS AIR SU:


DC -- DC017 -- 6671 10/29/92 14:31 EST
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Publication:PR Newswire
Date:Oct 29, 1992
Words:435
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