Retiree Benefits Security Act of 1987

Retiree Benefits Security Act of 1987 - Amends Federal bankruptcy law to apply provisions governing the rejection of collective bargaining agreements in reorganization cases to collective bargaining agreement provisions relating to benefits for retired employees.

Provides that bankruptcy claims for retiree benefits and claims arising under any collective bargaining agreement or rejection thereof shall not be limited to one year's compensation.

Designates the labor organization which is the recognized exclusive collective bargaining representative in a collective bargaining agreement as the authorized representative of persons receiving retirement benefits under such agreement in bankruptcy proceedings. Directs the court to appoint a committee of retirees to serve as such representative if the labor organization elects not to serve or if the recipients of retiree benefits are not covered by a collective bargaining agreement.

Requires the debtor in possession or trustee in a reorganization case to pay and not modify any retiree benefits under any program established or maintained by the debtor prior to filing a bankruptcy petition. Allows modification of such benefits: (1) by court order; or (2) as agreed to by the trustee and the authorized representative of benefit recipients. Treats such payments as administrative expenses. Permits the court to order a modification in retiree benefit payments only if: (1) with respect to benefits covered by a collective bargaining agreement, such agreement is rejected in bankruptcy; and (2) with respect to benefits whether covered or not, the court finds that modifications are necessary to permit the reorganization of the debtor and assure that all creditors, the debtor, and all affected parties are treated fairly and equitably and that the balance of equities clearly favors the modification sought by the trustee. Permits the court, before issuing a final order, to authorize the trustee to implement interim changes in benefits not provided by a collective bargaining agreement, if essential to the continuation of the debtor's business, or in order to avoid irreparable damage to the estate.

Provides that any retiree benefits paid between the filing of a petition and confirmation of a plan shall not be deducted from amounts calculated for claims for unpaid future retiree benefits or for any benefits not provided due to modifications, unless otherwise agreed by the debtor and the authorized representative.

Requires a reorganization plan to place all claimants for retiree benefits in a separate class consisting only of such claimants. Requires that a plan, to be fair and equitable with respect to such claimants: (1) provide that each claim holder of such class receive property of a value equal to the allowed amount of such claim; or (2) provide that each claim holder of such class receive such value as found by the court to represent the minimum reduction in retiree benefits consistent with the ability of the debtor to provide such benefits after plan confirmation.

Provides for the retroactive application of this Act.