A Delta Air Lines flight attendant has filed a proposed class- action suit against the company, saying it changed its formula for calculating pension benefits, costing beneficiaries millions of dollars in accrued benefits that are federally protected.
A Delta spokesman said the company believes the suit is without merit and is prepared to defend itself vigorously.
The suit, filed in U.S. District Court in Atlanta by Jean Marie Cinotto, a Delta flight attendant for more than 30 years, says Delta made the change in 2007 while in Chapter 11 bankruptcy. The change altered the calculation of the Social Security offset for certain participants' pension benefits.
The offset typically reduces corporate pensions by a percentage of Social Security benefits received.
Delta's change, the suit claims, violates an "anti-cutback" rule under the Employee Retirement Income Security Act. It could affect tens of thousands of participants and beneficiaries in the airline's pension plan, the suit says.
But Delta said it made the change to qualify for the federal Pension Protection Act, a 2006 law aimed at helping companies save pension plans.
"Without it, the pension plans for all flight attendants and ground employees would have been terminated," Delta spokeswoman Gina Laughlin said.
Delta terminated its pilot pension plan while in bankruptcy proceedings but retained the plan for flight attendants and ground workers, which it had frozen in 2005.
Cinotto, an organizer in past efforts to unionize Delta flight attendants, said she appealed the change within Delta but was unsuccessful in having the decision reversed.
"We have to make sure the funding is done properly," Cinotto said. "There are 91,000 of us depending on that fund."
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