UPDATE 1-JAL plans to reduce pension benefits - Nikkei

Sept 17 (Reuters) - Japan Airlines (JAL) 9205.T will propose a plan to former and current employees to reduce pension benefits and spread out its obligations over a longer period, that will result in a profit this fiscal year, the Nikkei business daily reported.

The airline hopes to generate a profit of 88 billion yen in the year ending March 2010 through the lowered pension obligations, the business daily said, without citing sources.

JAL's pension benefit rate currently stands at 4.5 percent, and in the detailed proposal to roughly 9,000 former employees, JAL will likely seek approval to lower the pension benefit rate below 4 percent, the paper said.

For its 17,000 current employees, JAL hopes to lower the benefit rate to below 2 percent. The airline is likely to present its proposal at a meeting of the corporate pension fund's financial committee that is due to be held on Friday of this week or next, the paper said.

Even if its proposal is accepted by pension members, the company will still need support from its lenders and relevant authorities. If any of them object, JAL may withdraw the plan, the paper added.

Earlier, Japan's new transport minister, Seiji Maehara, said he would review turnaround plans for Japan Airlines Corp 9205.T as bidders circle the loss-making carrier. [ID:nTKX006455] (Reporting by Jennifer Robin Raj in Bangalore; Editing by Deepak Kannan)