As we all know, AA wanted to do away with our defined pension plan and used bankruptcy as a platform to justify this. The PBGC was on our side and exposed the flawed argument that was proposed by AA.
As with all of the questions we receive from the membership, the TWU514 looks to those with the knowledge of the topic at hand. So today I spoke with our TWU514 Retirement Councilor Mark Loeber to get the details on just what is happening with our frozen pension and what it would mean to have a new pension plan with the IAM, this is what I gathered from the conversation.
Our current Frozen pension plan is much like a mortgage on your house. AA is paying into the plan every year. A full report is sent out annually to all that are in the plan. This report shows the exact funding of our plan. If you have any questions AA is required to answer them for you. The number to call is 1-800-447-2000 follow the prompts: 1 for pension then 3 for pension related. Ask them for a copy of the report.
IAM National Pension Plan.
If and when we get this plan initiated it will be a separate plan. This means that you’r AA frozen plan stays right where it is and the IAM plan will start as a NEW plan. You might have to wait for the vesting period, and if you are only in the plan for the next 2 years, you might not get any great benefit from it. But if you have another 10,15 or 20 years before you retire you might see a sizeable monthly check, each person would be different.
If you would like to know more about this and get the details that you deserve, Give Mark Loeber a call, set an appointment up and have him go over your personal records to determine just where you are and will be on the future. Mark can be reached at (918)491-0079.
Now for some history :
From The PBGC Website:
American Airlines (AMR) Pensions
UPDATE: On April 20, 2012, responding to news of a possible American Airlines merger with US Airways, PBGC Director Josh Gotbaum said: “We’re continuing to work for a strong airline that offers dependable air service, provides jobs, and preserves its pensions. In order to get the best resolution for everybody, all options should be on the table.”
UPDATE: On March 7, 2012, AMR announced it would freeze, not terminate, the pensions of its non-pilot employees. That means going forward workers won’t earn additional benefits, but they won’t lose a dime they’ve already earned. PBGC Director Josh Gotbaum had this to say: “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.”
UPDATE: On February 1, 2012, American Airlines announced it would seek to terminate all four of its pension plans. Responding to the news, PBGC Director Josh Gotbaum said: “Before American takes such a drastic action as killing the pension plans of 130,000 employees and retirees, it needs to show there is no better alternative. Thus far, they have failed to provide even the most basic information to decide that.”
Summary
AMR, the parent company of American Airlines, filed for bankruptcy on November 29, 2011. American sponsors four defined benefit pension plans covering nearly 130,000 workers and retirees. Although the plans are insured by PBGC, American is solely responsible to pay benefits owed under its four pension plans. These plans are ongoing and PBGC is doing its utmost to ensure that American maintains responsibility for the plans and keeps the pension promises it has made. That way, people who count on those plans can receive their full plan benefits, without regard to the limits in the pension law – and PBGC will not be forced to pick up obligations that AMR really can afford.
PBGC is actively involved in the bankruptcy, both directly and as a member of the Committee of Unsecured Creditors.
Participants in American’s plans should call the company for more information about their pension plans or their benefits. PBGC cannot provide specific information on the plans or any of the benefits actually owed to AMR employees. You may, however, find general information about how our guarantees work in ourFrequently Asked Questions.
Contact Information (Provided by AMR):
For Pilots: Sue Kalosa, (817) 967-5386
For Other AMR Workers and Retirees: (800) 447-2000
AMR By the Numbers
Plans: 4
Total workers and retirees: about 130,000
Estimated pension assets: about $8.3 billion
Estimated benefits owed: about $18.5 billion
Estimated amount Insured by PBGC, if pension plans fail: About $17 billion
Premiums paid to date from AMR to PBGC: about $260 million
In The News
OPINION: American Airlines pensions reversal was right move (Business Insurance, Mar. 13, 2012
American Airlines retreats on plan to dump pensions (CNNMoney, Mar. 7, 2012)
At Airline, a Pensions Compromise (The New York Times, Mar. 7, 2012)
AMR offers to freeze, not terminate, pensions (Reuters, Mar. 7, 2012)
Gotbaum: Compromise on pension a ‘good sign’ that bankruptcy reorganization can move quickly (The Dallas Morning News, Mar. 7, 2012)
Pension insurer doubts need of American Airlines parent to terminate defined benefit plans (The Chicago Tribune, Feb. 28, 2012)
American Airlines’ plan for pension bailout draws criticism (The Washington Post, Feb. 3, 2012)
Editorial: American faces a turbulent ascent (The Dallas Morning News, Feb. 2, 2012)
Josh Gotbaum talks about PBGC’s fight to preserve American Airlines pensions (PBS Nightly Business Report, Feb. 1, 2012)
AMR Wants to terminate all four of its pension plans (Fort Worth Star-Telegram, Feb. 2, 2012)
PBGC files liens on American assets as the carrier didn’t make its full pension payment in Jan. (Fort Worth Star-Telegram, Jan. 31, 2012)
Federal Agency Sounds Alarm on American’s Pensions (Fort Worth Star-Telegram, Jan. 26, 2012)
PBGC says 13,000 current or retired American employees will have pensions cut if plans are terminated (Fort Worth Star-Telegram, Jan. 26, 2012)
PBGC Director Says Increased Bankruptcies Could Lead To Higher Pension Premiums (Bloomberg Law YouTube video, Jan. 12, 2012)
Federal Role in Corporate Pension Protection (C-SPAN video, Dec. 12, 2011)
PBGC named to unsecured creditor committee in American Airlines bankruptcy(Business Insurance, Dec. 6, 2011)
PBGC could get biggest pension loss from American Airlines (Business Insurance, Dec. 4, 2011)
Who Will Pay American Airlines’ Pensions?
Pension Benefit Guaranty Corp. Director Josh Gotbaum on how American Airlines’ pensions will be paid now that the airline is filing for bankruptcy. (Fox Business News, Dec. 2, 2011)
Government pension agency braces for American Airlines bankruptcy (The Washington Post, Dec. 2, 2011)
US faces pension bill for AMR restructure (Financial Times, Nov. 30, 2011)