Phil Bolton for GlobalAtlanta
Last week’s ruling in a U.S. bankruptcy court allowing Delta Air Lines Inc. to terminate its pilot-defined benefit pension plan is more good news for the airline that has been operating under bankruptcy protection.

The ruling still awaits approval by the Pension Benefit Guaranty Corp., the agency that ensures pensions.

Delta also received good news last month when Congress passed the Pension Protection Act of 2006 because it and Northwest Airlines Inc. received special treatment.

“Delta should be pretty happy with these changes,” G. Edgar Adkins Jr., a partner in the Washington office of the accounting and business advisory firm Grant Thornton LLP, said of the provisions in the act, which was signed into law on Aug. 17.

GlobalAtlanta conducted a filmed interview with Mr. Adkins, a pension expert, while visiting Washington Aug. 28, and was in touch with him following the Sept. 5 ruling of Judge Adlai Hardin.

In a media release, Delta executives called the termination of the pilot-defined benefit pension plan an unfortunate, but necessary step in the airline’s restructuring.

Delta also said that the Pension Protection Act would give the company the opportunity to preserve the defined benefit pension plan for its approximately 91,000 active and retired flight attendant and ground employees.

The legislation’s airline provisions, according to the release, “did not provide the same opportunity for its pilot plan because of the plan’s key features and unsupportable costs.”

Under the terms of Delta’s pilot defined benefit pension plan, pilots may retire at age 50 and take out half of their total retirement benefit in a lump sum payment and receive the rest as an annuity.

The Aug. 17 law is the most extensive revision of the nation’s pension law in three decades and requires most private employers that provide traditional pensions for their workers to put more dollars into those systems over seven years while making it easier to expand 401 (k) and IRA retirement plans.

But the law cuts a break to the financially troubled airline industry. Funding provisions of the law will not take effect for two years to provide time for a transition and the airline industry and certain government contractors received a break in meeting them.

Delta and Northwest will have 17 years instead of seven to fully fund them, while other airlines get 10 years.

Mr. Adkins provides an overview of the Pension Protection Act and its effect on Delta and the airline industry in the filmed interview. He may be reached by email at, or by calling (202) 521-1565.