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.)
Also Check Out: