AMR Corp. instead contributed just $6.5 million by the January 15 deadline, the Pension Benefit Guaranty Corporation (PBGC) said, according to the Wall Street Journal.
“The company determined this is the appropriate course of action,” an AMR spokesman told the Wall Street Journal. “This action allows the company to preserve cash.”
AMR filed for Chapter 11 bankruptcy protection in late November. Since then, it has warned that it may reduce its pension commitments to employees as part of the restructuring.
PBGC Director Josh Gotbaum previously said, based on the agency’s estimates, American Airlines employees could lose a billion dollars in pension benefits if American terminates its plans (see PBGC: American Airlines Bankruptcy Could Hurt Financial Position). A termination would also weaken the financial condition of PBGC, which has a record $26 billion deficit as a result of failed plans the agency has already assumed.
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