Judge Refuses to Dismiss Pan Am Suit
NEW YORK – The Association of Former Pan Am Employees, Inc. (”AFPAE”) announces that, in the class action entitled Pineiro v. PBGC, 96 Civ. 7392 (LAP)(S.D.N.Y.), Judge Preska (U.S.D.J.) issued on March 13, 2000 her third opinion on PBGC’s motion to dismiss the complaint in this action.
Judge Preska rejected PBGC’s attempt to dismiss this action and greatly expanded PBGC’s fiduciary responsibilities to the former Pan Am employees. Former Pan Am employees should now have their day in court with their claims that PBGC breached its fiduciary duties and committed other wrongful actions in its role as trustee of the Pan Am retirement plan.
At least 14,000 workers have yet to be informed of the benefits due them nearly nine years after the airline folded. David Cay Johnston, NY Times, “The ruling, which eventually may lead to an increase in pension payments for some of the 65,000 people who worked for Pan Am when it went out of business in 1991, affects the way the Pension Benefit Guaranty Corporation administers pension plans. The Association says the Guaranty Corp issued thousands of workers deter minations of the benefits due them that were improper, failing to abide by the terms of the agreement negotiated between Pan Am and its unions.”
This decision is unprecedented in expanding the rights and claims of former Pan Am employees against the PBGC and is a substantial victory not only for former Pan Am employees but also for all similarly situated individuals. As a result of the decision, the PBGC will finally be forced to respect the rights of former employees under terminated retirement plans in the same manner as any other plan fiduciary.
