AMR offers to freeze, not terminate, pensions
Source: Reuters
AMR offers to freeze, not terminate, pensions
By Kyle Peterson
Wed Mar 7, 2012 4:41pm EST
(Reuters) - AMR Corp, the bankrupt parent of American Airlines, on Wednesday proposed a plan to freeze pensions covering many of its workers, retreating from an earlier proposal to terminate them and leave them to government insurers, which could result in lower payouts.
The proposal, which would avert the largest pension default in U.S. history, could move the third-largest U.S. airline a step closer to consensual deals with its major unionized work groups as its struggles to slash uncompetitive labor costs.
AMR, which filed for Chapter 11 on November 29, had been the only major airline to avoid bankruptcy in the last decade and is the only one that still has traditional, or defined benefit, pensions, the company said.
"Freezing the defined benefit pension plans would mean that employees would retain the full value of benefits accrued for service prior to the date the plan is frozen," said Jeff Brundage, AMR's senior vice president of human Resources, in a letter to employees.
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Read more: http://www.reuters.com/article/2012/03/07/us-amr-idUSTRE8261OE20120307
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