Aloha Airlines, Bank of Hawaii and First Hawaiian Bank have agreed to pay a total of $10.5 million for losses the airline's three pension plans suffered, the U.S. Department of Labor announced today.

About $9.55 million will be paid to the trustee of the pension plans, Pension Benefit Guaranty Corp., under the settlement agreement with the government.
Another $955,000 was assessed as civil fines and will be paid to the federal government.
The Labor Department alleged that Aloha Airlines and Bank of Hawaii contributed to investment losses suffered by the pension plans. The department said Aloha and Bank of Hawaii caused or permitted the pension plans to buy newly issued stock of the airline's holding company in September 2000 for more than its fair market value and without investigating the merits of the stock purchase.
The government also said Aloha and Bank of Hawaii failed to take steps to protect the pension plans as the stock lost all of its value.
The department said the transaction also was prohibited because there was no purchaser independent of the stock issuer.
The department also said First Hawaiian Bank, which managed a portion of the plans' investments not involved in this transaction, facilitated the stock transaction and therefore knowingly participated in fiduciary breaches or violated its duties as a co-fiduciary.
Aloha Airlines has agreed to pay $5 million to the plans and $500,000 in civil penalties to the federal government, the Labor Department said.
Bank of Hawaii and First Hawaiian bank each agreed to pay $2.5 million. Of the $5 million total, $4.55 million is for restitution and $455,000 is for civil penalties.
In an earlier settlement agreement reached in September, PriceWaterhouseCoopers agreed to pay $250,000 to the pension plans and a $50,000 civil penalty. The Labor Department said the firm was the auditor for the plans and knowingly participated in fiduciary breaches.