CHICAGO, IL—U.S. Representative Rahm Emanuel (D-IL) released the following statement in response to reports that the Pension Benefit Guaranty Corp. (PBGC), the federal agency that oversees pension plans, will assume the responsibility for the pensions of more than 36,000 United Airlines employees.

“Today's announcement by the Pension Benefit Guaranty Corp. is disappointing news to the more than 36,000 active and retired United Airlines employees, whose retirement benefits will be a fraction of what they expected.

“PBGC’s decision underscores the urgent need for a comprehensive solution to protect the pensions of all of the industry’s employees. That is why I have proposed that Congress establish an Airline Employees Retirement Board, based on the Railroad Retirement Board created in the 1930s when that industry faced similar challenges.

“As I described in testimony before the Senate Commerce, Science and Transportation Committee in October 2004, an Airline Employees Retirement Board would administer a federally guaranteed pension system delivering a stable and universal benefit to airline employees. Employers and employees would each contribute to the cost of the plan and the federal government would back it up with unspent airline loan guarantees authorized by Congress after the September 11th attacks.

“Airlines that awarded pension benefits to their employees, often in exchange for lower wage agreements, are now attempting to avoid their obligations. These employees worked hard in exchange for the promise of a secure retirement. It is wrong to ask employees for a lifetime of service and then dump their hard-earned pensions when times get tough.  This is unfair to employees who negotiated these benefits and is bad for our Nation’s economy.

“If we do not act, more pensions will be foisted upon the PBGC, which will eventually result in a taxpayer bailout rivaling the savings and loan debacle of the 1980s. Let us seize the opportunity now and create a framework to protect employee pensions while strengthening the industry for the long-term.”