Hughes Retirees Entitled to Pension Trial

Hughes Aircraft Co. retirees are entitled to a trial on their contention that parent General Motors Corp. improperly used surplus pension money, reversing a lower court decision, the 9th U.S. Circuit Court of Appeals ruled. The plaintiffs, representing about 10,000 pensioners, demanded that nearly $1 billion of the surplus be distributed as increased benefits to those who had contributed to it. When GM bought Hughes in 1987, it stopped paying into a contributory plan, though employees still had to, according to court papers. By 1992, half of the surplus was attributable to employee contributions. In 1989, GM used some of the surplus to pay for early retirements, including those of some employees who had not contributed. In 1991, GM froze new enrollment and created a non-contributory plan. It has since been using surplus from the original plan to fund the new one, court records say. Company representatives and plaintiffs attorneys couldn’t be reached for comment.