Companies drop pensions, pay execs $350 mln--GAO

* GAO studied companies with unfunded pension liabilities

* U.S. Rep. Miller mulls executive compensation freeze

* Perks from private helicopters to health club dues

By Kim Dixon and Ross Kerber

WASHINGTON/BOSTON, Nov 19 (Reuters) - Ten large U.S.
companies paid senior executives a total of $350 million in the
few years prior to dropping traditional pension plans for
employees, a Congressional watchdog said on Thursday.

Forty executives in a range of industries received the
compensation in base salaries, bonuses, severance and perks in
the five years before the pension plans failed, the non-
partisan Government Accountability Office said in a new
report.

U.S. Rep. George Miller, who chairs the House Education and
Labor Committee, said in a statement he is considering
legislation to freeze executive compensation if a company's
rank-and-file pension plan becomes significantly underfunded.

"It is fundamentally wrong that executives were able to
line their pockets with millions of dollars ... while watching
their workers' retirement security slip into peril," said
Miller, who requested the GAO's investigation.

Four cases in particular were singled out where the dropped
pensions covered a total of more than 202,000 participants and
were left underfunded by some $11 billion.

A source familiar with the report said the four most
egregious cases cited by the GAO involved UAL Corp's UAUA.O
United Airlines, U.S. Airways Group Inc (LCC.N), electronics
company Polaroid and insurer Reliance Motors and Drivers.

The other cases involved auto parts maker Harvard
Industries Inc HAVA.PK , steel-makers Republic Technologies,
National Steel and LTV Steel and textile companies Westpoint
Stevens Inc WSPTQ.PK and Pillowtex, the source said.

In the case linked to United -- by far the largest of those
analyzed by the GAO -- the airline missed nearly $1 billion in
required pension contributions.

At the same time, it awarded its top three executives more
than $50 million in salary, bonuses, stock and supplemental
retirement benefits, the report said.

At Reliance, a family-owned insurance company, the CEO, COO
and their families logged over $200,000 in company plane and
helicopter costs for personal trips to China, Greece, Hawaii
and elsewhere.

The report looked at publicly-traded companies with more
than $100 million in unfunded liabilities.

Failing pensions deplete the resources of the Pension
Benefit Guaranty Corporation, a government agency that insures
traditional corporate pension plans designed to pay fixed
amounts to some 44 million American workers and retirees.

Many U.S. companies have dropped traditional, defined-
benefit plans in favor of less-costly 401(k) programs that put
more risks onto workers.

The pension guaranty agency said last week its annual
deficit nearly doubled to $22 billion in fiscal 2009 from $11.2
billion in fiscal 2008.

The PBGC this year has assumed responsibility for pension
plans at auto parts supplier Delphi Corp DLPIV.PK, retailer
Circuit City Stores Inc CCTYQ.PK, IndyMac Bank IBFSL.PK,
Lehman Brothers Holdings Inc (LEHMQ.PK) and textile maker Dan
River Inc, among others.

The GAO report was posted at:
here
(Reporting by Kim Dixon in Washington and Ross Kerber in
Boston; editing by Ros Krasny and Andre Grenon )