This excerpt taken from the UAUA 8-K filed Apr 14, 2005.
Restoration Funding Would Not Substantially Reduce Uniteds Required Contributions Over the Long-Term.
Nor is restoration funding the long-term solution to Uniteds pension situation. To begin with, the PBGC has been unreceptive to terminating a plan solely for the purpose of restoring it on a more forgiving funding schedule.(95) Even assuming the PBGC would change its position and allow United to spread its required contributions over the maximum allowed 30 years, the Company still would have to pay about $2 billion to its plans through 2010 and would continue to bear about $500 million a year in required contributions for decades to come. In fact, through 2030, Uniteds contributions would total more than $12 billion:(96)
(93) Id. ¶ 79; Nelsen Supp. Decl. ¶ 9.
(94) Marnell Supp. Decl. ¶ 79.
(95) See Memorandum at 115-16.
(96) Marnell Supp. Decl. ¶ 81. United also has considered contributing non-cash assets to its pension plans in lieu of cash. Unfortunately, the Company does not have any non-cash assets that it could contribute to its pension plans. United already has sold a number of its assets during the course of its bankruptcy to maintain liquidity, and assets that remain are critical to the Companys operations and/or will be necessary to use as collateral for its exit financing. Moreover, ERISA prohibits the contribution of non-cash assets to pension plans, 29 U.S.C. § 1106(a)(1), and so the Company would need an exemption from the Department of Labor (DOL) even if it had assets that could be contributed. 29 U.S.C. § 1108(a); see also 29 CFR § 2570.30, et seq.