Archive

PBGC to Get $9.5 Million in Aloha Air Settlement

By Staff Report

Jun. 16, 2009

The Pension Benefit Guaranty Corp. will receive $9.5 million for the three terminated pension plans of Aloha Airlines in Honolulu in a settlement over the plans’ investment losses on company stock, according to a Department of Labor news release.


The settlement resulted from an investigation conducted by the Labor Department’s Employee Benefits Security Administration, which reached an agreement with the former airline’s holding company as well as Bank of Hawaii and First Hawaiian Bank. The PBGC is the plan’s trustee, having taken over the plans in April 2006.


Aloha and Bank of Hawaii, as the plans’ fiduciaries, were accused of breaching their fiduciary duties under ERISA by allowing the plans to buy newly issued stock of the airline’s holding company in September 2000 for more than its fair market value.

As the plans’ investment manager, First Hawaiian Bank knowingly participated in the fiduciary breaches by facilitating the stock transaction and therefore violated its duties as a co-fiduciary, according to the Labor Department.


Aloha Airlines originally filed for Chapter 11 bankruptcy protection in December 2004 and notified employees in October 2005 that it would seek bankruptcy court approval to terminate its pension plans. The airline filed for Chapter 11 bankruptcy protection a second time in March 2008.


Filed by Pia Sarkar of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


Workforce Management’s online news feed is now available via Twitter.
 

About Workforce.com

blog workforce

We build robust scheduling & attendance software for businesses with 500+ frontline workers. With custom BI reporting and demand-driven scheduling, we help our customers reduce labor spend and increase profitability across their business. It's as simple as that.

Book a call
See the software

Related Articles

workforce blog

Employee Engagement

12 practical employee appreciation ideas for better engagement and retention

Summary Showing appreciation to your employees improves engagement and retention. There are 12 practica...

employee appreciation, engagement, HR, raccoons

workforce blog

Compliance

California fast food workers bill: why it’s more than meets the eye and how to prepare

Summary: California signs bill establishing a “fast food council” that has the power to raise the indus...

workforce blog

Employee Engagement

7 statistics on employee turnover in 2022 every HR manager should be aware of

Summary July 2022 saw 5.9 million total separations – More Replacing a full-time employee can cost up t...

employee retention, employee turnover