Pension Agency Disputes AMR Comments To Workers

By PETER SVENSSON AP Technology Writer

FORT WORTH (AP) — The federal pension-insurance agency accuses American Airlines of misleading employees about the safety of their retirement benefits.

The agency said Thursday that 13,000 current or retired American Airlines employees could see pensions reduced if the company terminates its retirement plans as part of a bankruptcy reorganization.

“American Airlines is telling their workers and retirees not to worry, but they should,” said J. Jioni Palmer, spokesman for the Pension Benefit Guaranty Corp.

Airline spokesmen did not immediately respond to a request for comment.

In a letter to employees Monday, Thomas W. Horton, the CEO of Fort Worth-based American and parent AMR Corp., said that 90 percent of employees would get the same pension benefits regardless of whether the company terminated its pension plans.

The PBGC said that means 13,000 people could have their pensions cut, although Horton did not use that figure. The airline’s four plans cover about 130,000 workers and retirees.

Highly paid employees — pilots and upper management — would be most vulnerable to benefit reductions if the company ends its pensions and hands the obligation for future payments to the PBGC. The agency limits how much it will pay, with the current top benefit now $54,000 a year for people who retire at 65; less for those who retire earlier.

Thursday’s comment was the latest salvo in a PBGC campaign to discourage American from dumping its pension obligations on the agency.

American hasn’t said it will terminate the plans, but its lead bankruptcy lawyer and company statements have raised the possibility.

AMR and American Airlines filed for bankruptcy protection Nov. 29. The next hearing in the case is Friday in New York.

(Copyright 2012 by The Associated Press. All Rights Reserved.)

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One Comment

  1. susan says:

    as a former aa’er who is on a very small pension at the low end of the spectrum,any news like this is disconcerting..aa/amr has never been very truthful when they come out with press releases or employee memos..they have always “danced the little sidestep” around questions or issues at hand to appease,but not necessarily fix a problem..they have given little or no information to retirees or current employees about the state of things..i can see why the pension guaranty dept of the government is unhappy with amr…

  2. Michael M says:

    54,000 a year?! I don’t know anyone who gets a pension that big! Susan, you have no reason to be concerned about your “very small pension”, as you put it. Uncle Sam has guaranteed up to $54,000 per year. I wish I would be getting a pension that big… I don’t even make that much right now!

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