Today, American Airlines and
the presidents of the three labor unions representing AA pilots, flight
attendants, aircraft maintenance technicians, plant maintenance employees,
fleet service employees, ground service employees, technical specialists,
flight dispatchers, stock clerks, flight simulator technicians, ground
school, flight simulator and pilot simulator instructors at American
jointly issued a statement regarding defined benefit pension plan
legislation: “We support pension reform that does not discriminate based on the credit
rating of the plan sponsor, and that better protects employees’ retirement
benefits by making it more flexible and affordable for companies to fund
1. Maintaining the flexibility to continue defined benefit plans as an effective means to provide retirement security.
2. Reasonably extending the number of years companies would have to make up the unfunded portions of their plans.
3. Setting reasonable interest rates to determine plan liabilities.
4. Providing simpler, better, and more timely disclosure of important pension plan data.
5. Providing an increase in permitted contributions.
6. Supporting the concept that benefit plans be charged risk adjusted premiums by the Pension Benefit Guaranty Corporation (PBGC).
“We support a ban on preferential funding of Supplemental Executive
Retirement Programs while the minimum contributions are not being made to
the corporate defined benefit plans.
“We also support legislation that would provide pension relief to
companies that freeze their plans through the collective bargaining
process, in accordance with the principles above, rather than terminating
them in bankruptcy.”
When the men and women of American Airlines consensually restructured
their wages, work rules and benefits in 2003 to deliver the savings needed
to avoid bankruptcy at the time, they chose to do so in a way that allowed
them to preserve their defined benefit pension plans. And, despite
difficult economic challenges, the company continues to meet its pension
funding obligations. These actions demonstrate that companies must try to
protect the retirement benefits that have been promised to their people.
To do this, American must continue to work collaboratively with all
stakeholders under its Turnaround Plan to return to profitability. This
also underscores the need for reasonable pension reform legislation that
better and more fairly protects employee retirement benefits by making it
more affordable and flexible for companies to fund defined benefit plans.