Thursday, March 08, 2012
American Airlines might have terminated pensions, turning to the PBGC
American Airlines, in its Chapter 11 restructuring, had considered terminating existing employee pensions and dumping them on the PBGC, which would result in reduced pensions for long-retired employees. It has agreed not to do this, but merely to stop pension contributions, in the latest story by Chris Isodore on CNN.
The possibility of pension termination, instead of a freeze offer, is still in play for pilots, apparently. This could result in possible labor instability in the future.
The possibility of pension termination for long-retired employees in troubled companies can be a serious financial planning hurdle for many retirees.