Judge approves American Airlines pilot contract, pension freeze
Published: December 19, 2012 - Pensions & Investments
Bloomberg
American Airlines on Wednesday won court approval to eliminate lump-sum
retirement payouts to pilots and proceed with plans to freeze their defined
benefit plan.
U.S. Bankruptcy Court Judge Sean Lane in New York also approved the new labor
contract with the Allied Pilots Association, which calls for the company to
contribute 14% of pay into a new 401(k) plan.
The ruling denied a request from a group of senior pilots who wanted to
preserve the lump-sum option.
As part of its negotiations with parent AMR Corp., the pilots' union
supported removing the lump-sum option in order to avoid plan termination. The
Pension Benefit Guaranty Corp. and the unsecured creditors committee also
supported removing it.
gSince March, we've worked collaboratively with the Allied Pilots
Association, the PBGC and the unsecured creditors' committee to develop a
solution that would allow us to maintain the freeze of our pilot defined benefit
pension plan, and we are pleased that we can now move forward to implement that
solution,h American Airlines spokesman Bruce Hicks said in an e-mail.
Calls to attorneys representing the senior pilots group were not returned at
press time.
Original Story Link: http://www.pionline.com/article/20121219/dailyreg/121219877
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