Aloha Airlines yesterday officially terminated the pensions of nearly 4,000 of its employees and retirees and turned the plans over to a federal agency.

The Pension Benefit Guaranty Corp., which insures basic pension benefits for millions of American workers, assumed the responsibility for the defined-benefit plans for Aloha's managers, and members and retirees of the pilots and machinists unions.

Aloha in January reached an agreement in principle with the PBGC to take over the its pension plans, paving the way for the airline to exit bankruptcy in February under new ownership led by California billionaire Ron Burkle's Yucaipa Cos. The airline said it needed to terminate its pensions to emerge from bankruptcy protection.

According to the PBGC, Aloha's three pension plans are 55 percent funded, with $190 million in assets to cover $345 million in benefit promises. The agency said it expects to be responsible for $117 million of the $155 million shortfall.

An Aloha Airlines spokesman declined comment.

The move is the latest by a large employer seeking to jettison its pension obligations. United Airlines, Huffy bicycles, Polaroid, Kaiser Aluminum, and Bethlehem Steel are among many companies that have terminated their pensions and handed them over to the PBGC.

"We're disgusted that our pensions are being turned over the PBGC," said John Riddel, an Aloha pilot for more than 20 years and member of the 300-member pilots union's master executive council.

"We're deeply saddened that the company has done this at this time when we are so close to getting help from Washington, D.C., to to save these pensions."

Riddel was referring to legislation making its way through Congress that would give companies with underfunded pensions 20 years to amortize their pension obligations and bring their defined-benefit plans into compliance.

Riddel said that many of Aloha's pilots will be hard hit by the termination because the PBGC caps benefits for retirees 65 or older at about $45,000 a year, which is about half the amount senior pilots are entitled to.

Since the airline filed for bankruptcy in December 2004, Aloha's pilots have given up more than $120 million in the form of wage concessions and the terminated pensions, Riddel said.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.