The opinion of the court was delivered by: James Robertson United States District Judge
The plaintiffs in this case are retired US Airways pilots and, with the exception of plaintiffs Michael Oakey and Thomas Davis,*fn1 are participants in US Airways' Pilots' Retirement Income Plan (the"Plan"). They seek to compel the Pension Benefit Guaranty Corporation ("PBGC") to enjoin[ PBGC] from paying less than legally required amounts to participants [in the Plan] and compel it to immediately commence monthly payments at a level which is the greater of the statutory guaranteed maximum or 90% of the pre-termination benefit except in the case of retirees who received a pre-termination benefit less than the statutory guaranteed maximum[, to whom] PBGC should immediately commence payment of the full pre-termination monthly benefit[;] compel PBGC to make initial benefit determinations within two years of the termination of the plan, March 31, 2005[;] order US Airways and PBGC to immediately provide them with the calculations, guidelines, procedures and interpretations applied in determining plaintiffs' current benefit payments[; and] order US Airways to fully cooperate with PBGC in its efforts to make initial benefit determinations.
Plaintiffs' Application for a Temporary Restraining Order, at 1-2, incorporated by reference in Plaintiffs' Motion for Preliminary Injunction, at 1. For the reasons stated below, plaintiffs' motion for preliminary injunction [#3] is denied.
On August 11, 2002, US Airways Group, Inc., and seven subsidiaries ("US Airways"), filed voluntary petitions for Chapter 11 reorganization in the Bankruptcy Court of the Eastern District of Virginia. US Airways"aggressively pursued a'fast track' reorganization, with the announced goal of being out of chapter 11 by the end of the first-quarter, 2003." In re US Airways Group, Inc., No. 02-83984 (Bankr. E.D.V.A. Mar. 7, 2003) ("Bankr. Court Decision"), at 4. It soon became apparent that US Airways' seven-year reorganization plan would create"a serious funding shortfall for [US Airways'] defined benefit pension plan." Id. at 5. On January 30, 2003, US Airways notified PBGC of its intent to"distress" terminate its underfunded"defined benefits" plan -- the Pilots' Retirement Income Plan. That same day, US Airways moved in Bankruptcy Court for judicial findings, as required by ERISA § 4041(c)(2)(B)(ii)(IV)*fn2, to permit a distress termination of the Plan.
On March 2, 2003, the Bankruptcy Court found that US Airways had satisfied the requirements for a distress termination:"Unless the Plan is terminated, the debtors will be unable to pay all of their debts pursuant to a plan of reorganization and will be unable to continue in business outside the chapter 11 reorganization process." In re US Airways Group, Inc., No. 02-83984 (Bankr. E.D.V.A. Mar. 2, 2003), at 1. Because the Plan had been established pursuant to a collective bargaining agreement between US Airways and the Airline Pilots Association ("ALPA"), however, the Bankruptcy Court's order terminating the Plan was conditioned upon the union's consent. US Airways and ALPA subsequently reached agreement, and, on March 28, 2003, US Airways entered into an agreement with PBGC establishing March 31, 2003 as the date of the Plan's termination.
When a"defined benefits" plan is to be terminated as the US Airways Plan was terminated here, by"distress termination," 29 U.S.C. § 1341(c), PBGC and the pre-termination plan administrator, in this case US Airways, have certain responsibilities to plan participants and beneficiaries. See, e.g., id.
It was US Airways' pre-termination responsibility to revise benefit payments under the Plan from then-current levels to what it estimated would be the amount of benefits that would covered by plan assets or guaranteed by PBGC following termination. See 29 U.S.C. § 1341(c)(3)(D)(ii)(IV); 29 C.F.R. § 4041.42(c). Revised benefit calculations are governed by ERISA and PBGC regulations, and depend in part on estimates of the assets of the Plan and the order in which they will be allocated to participants. See 29 U.S.C. §§ 1344(a)(1)-(6). US Airways' pre-termination calculations were -- and were intended to be estimates, see 29 C.F.R. §§ 4022.61-63. The parties agree that PBGC has the duty of making the formal determination of each Plan participant's post-termination benefits. See 29 C.F.R. §§ 4003.1 et seq.
Plan participants were informed by US Airways of the pending termination and of their estimated post-termination benefits by letters dated March 28, 2003:
Pursuant to PBGC requirements, your benefit under the Pension Plan will be reduced to the maximum amount payable by the PBGC. In general, for pilots who retired or pilots who could have retired before April 1, 2000, the pension benefit adjustment is estimated to be 85% of the April 1, 2000 benefit (based on plan provisions in effect on April 1, 1998).
However, if the adjusted pension benefit is below the prescribed PBGC maximum benefit (adjusted for age and optional form of payment), the amount payable is increased to the lesser of the PBGC maximum or the current March 1, 2003 benefit. For pilots who were not eligible to retire before April 1, 2000, the retirement benefit is the lesser of the PBGC maximum (adjusted for age and optional form of payment) or the current March 1, 2003 benefit amount. If a partial lump sum payment was taken at retirement, the calculations described above are first done as if no partial lump sum was paid at retirement. The remaining benefit is reduced by the annuity value of the lump sum previously received.
Letter from U.S. Airways, dated March 28, 2003, Compl., Ex. C. PBGC, a United States government corporation, see 29 U.S.C. § 1302, has the primary responsibility of guaranteeing benefits, up to statutory limits, of private-sector defined benefit pension plans.*fn3 See PBGC v. LTV Corp., 496 U.S. 633, 637 (1990). The Supreme Court has described the PBGC's limited role as guarantor of plan benefits in these terms:
When a plan covered under Title IV terminates with insufficient assets to satisfy its pension obligations to the employees,... [t]he PBGC... must add its own funds to ensure payment of most of the remaining"nonforfeitable" benefits, i.e., those benefits to which participants have earned entitlement under the plan terms as of the date of termination. ERISA does place limits on the benefits PBGC may guarantee upon ...