What are Pension and OPEB Obligations?
Pension plans generally provide for cash payments of retirement income to former employees of the plan sponsor or its affiliates.2 In contrast, OPEB typically include retiree medical and retiree life insurance benefits. Although both pension and OPEB liabilities are initially created through plan documents or contracts with employees (including collective bargaining agreements which receive special treatment in bankruptcy), pension plans are also subject to a substantial body of federal statutory law that does not apply with respect to OPEB.
