Retiree group harps at Hughes over data.

It wants retirees' information in pension-surplus battle

A group of Hughes Aircraft Co. retirees, who have watched their $1 billion retirement-plan surplus dwindle since 1987, is suing Hughes to divulge names and addresses of some 55,000 employees and retirees they would like to enlist in efforts to safeguard the surplus.

The legal dispute concerns access to lists of names that are controlled by managers of a $4.2-billion-in-assets pension plan serving the majority of the Los Angeles aerospace company's 73,000 current and former workers.

That issue popped up last month in a court decision on another high-profile lawsuit brought by employees of L.A.-based Pacific Enterprises. Management won, but attorneys for Hughes workers said certain language in that ruling bolsters their own case, according to legal briefs they filed at the U.S. 9th Circuit Court of Appeals this month.

Concerns about old-age income have mounted nationwide as pension assets controlled by U.S. companies have risen to about $1 trillion. The Hughes case highlights the rights -- or lack of rights -- of retirees who try to form watchdog committees.

Certain rights are guaranteed under a 1974 federal law called ERISA, the Employee Retirement Income Security Act. It does not specifically call for plan administrators to divulge participants' names and addresses. Hughes' pension managers denied such information to retirees who became alarmed in 1990 when the plan's surplus was reported at approximately $800 million, down from $1.3 billion reported the prior year.

"That's roughly $500 million that doesn't show up in the books any more, and we don't know where that money went," complained retiree Stan Jacobson. The 22-year Hughes veteran is now chairman of the Hughes Salaried Retirees Action Committee, which claims to represent more than 2,000 retirees and wants the names to help form a watchdog group.

These people, non-union employees and management, claim their former employer is wrongfully keeping secret information on 11,000 other Hughes retirees. Likewise concerned are another 42,000 plan participants who currently work for Hughes and are not yet drawing pension income. (The remaining Hughes employees -- about 8,000 who belong to unions and 10,000 who work for Hughes subsidiaries -- are covered by other plans.)

All told, a $1 billion surplus split equally among the participants would tally about $18,000 a piece.

"Retirees should be entitled to all or a portion of that surplus," said Jacobson, a missile engineer who supervised design of Hughes' Maverick missile system before he retired in 1985. He and other committee members have said they worry that Hughes has applied the surplus to other employee benefits like early-retirement bonuses.

Their lawsuit does not allege outright mismanagement. In fact, the surplus pleased many retirees. But concerns grew after Hughes was bought by General Motors Corp. in 1985 for $5.2 billion. Rumors cropped up of merging the Hughes and GM pension plans, which has not happened.

Harry Fetters, project manager for Hughes' employee benefits, declined to comment on the suit.

But a Hughes staff attorney in charge of the case said the surplus resulted from "excellent investment performance," and groused, "Ironically, successful investment performance buys you a lawsuit."

The decline in asset value, said the Hughes lawyer, did not result from any misapplication of funds. Instead it came from typical challenges to any plan, such as increased payments to retirees and lackluster stock-market performance. "It's not unusual for the funded status of a pension plan to vary between a surplus and a deficit, depending on investment performance," he said.

Oral arguments have not been scheduled for the retirees' appeal of the case, which Hughes won a year ago in a lower court. An appellate decision is not expected for at least six to 12 months, said the Hughes attorney.

The same appellate court ruled Dec. 11 against employees in a similar case involving Pacific Enterprises. In that one, union official Gerardo Acosta sought names and addresses of PE pension plan participants, as well as the number of voting shares they owned through the plan, to help him solicit votes to put an employee on the corporation's board. Pacific Enterprises denied access and won.

Hughes retirees' attorneys, nevertheless, greeted the Acosta ruling as a victory: In this month's filings they cited the appellate court's finding that disclosure is warranted whenever it "is sufficiently related to the provision of benefits or the defrayment of expenses." That, they claimed, is almost self-evident in their case.