Benefits March 7, 2012
American Airlines Decides to Freeze Pensions
March 7, 2012 (PLANSPONSOR.com) - American Airlines will freeze pensions for most workers instead of terminating them as the company reorganizes under bankruptcy protection.
Reported by Rebecca Moore
American told employees of the decision Wednesday, according to the Associated Press.
In February, the company said it saw no other way to secure the company’s future without terminating the plans (see “American Airlines Proposes Termination of Pensions“). The Pension Benefit Guaranty Corporation (PBGC) responded by saying the company must prove that there is no better alternative than killing the pensions of 130,000 employees.
In a statement following the latest decision, PBGC Director Josh Gotbaum said, “It is great progress and good news that American recognizes it can reorganize successfully and preserve its employees’ pension plans. We’re also glad the company is willing to work with us to preserve their pilot plan too.
“Bankruptcy forces tough choices, but that doesn’t mean pensions must be sacrificed for companies to succeed. We will continue to work with American and the other participants in the bankruptcy to ensure that success.”