ELK GROVE VILLAGE, Ill., July 27 (UPI) -- The Pension Benefit Guarantee Corp., which oversees pension funds of bankrupt companies, says United Airlines should keep funding its employee pension funds.
PBGC sent United CEO Glenn Tilton a letter after the airline announced last week it would stop making contributions to its pension funds. The letter warned United would be breaking federal pension and tax laws by suspending pension fund payments and requested an explanation.
PBGC would have to make payments to retirees if United failed to emerge from bankruptcy.
"It is definitely rare for a company in bankruptcy that stops making payments to later right the pension ship," a spokesman for the pension agency told the Chicago Tribune.
The government says United's employee pension plans are underfunded by at least $7.5 billion. United said Friday it was making pension cuts to attract outside lenders.
United filed for Chapter 11 bankruptcy protection in December 2002.
