NWA Pays $14 Million to PBGC

MINNEAPOLIS (AFX) - The Pension Benefit Guaranty Corp. said it has made a deal with Northwest Airlines Corp. to resolve delinquent insurance payments.

Northwest agreed to pay $14 million to settle overdue insurance premiums for its pilot retirement plan, PBGC spokesman Gary Pastorius said Wednesday. Northwest and other employers pay the premiums to the government agency, which guarantees pensions.

In exchange for the $14 million payment, the PBGC agreed to release Northwest from liens related to a waiver for late payments Northwest made to its pension plans, Pastorius said.

The agreement does not resolve Northwest's underfunded pension plans. The PBGC said when Northwest filed for bankruptcy protection in September 2005 that the airline's pensions were underfunded by $5.7 billion. A pension overhaul signed by President Bush in August gives airlines an extra 10 years to meet funding obligations.

Northwest spokesman Roman Blahoski declined to comment on the settlement.

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