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aacun
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AA Proposes Freezing Non Pilot Employees Pension

Wed Mar 07, 2012 5:20 pm

AA just made a proposal to APFA, TWU and non union employees, reverting from dumping the pensions to the PBGC and instead proposing a freeze of the pensions. Pilots are not included
 
LAXdude1023
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AA Proposes Freezing Non Pilot Employees Pension

Wed Mar 07, 2012 5:23 pm

Its ironic because the pilots pensions are whats hurting the most.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
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mercure1
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AA Proposes Freezing Non Pilot Employees Pension

Wed Mar 07, 2012 5:38 pm

I see AA under pressure from creditors committee and PBGC backed off its initial plans to default completely.

Keeping the plans intact even if frozen is a good thing for the effected employees. Just like what DL/NW did.

here is news story
http://aviationblog.dallasnews.com/a...american-airlines-proposes-to.html
mercure f-wtcc
 
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Acey559
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AA Proposes Freezing Non Pilot Employees Pension

Wed Mar 07, 2012 6:15 pm

The company is trying to figure out what to do about the lump sum option the pilots have with their pension, that's what's keeping them from doing anything about it right now.
In Dixie Land I'll take my stand to live and die in Dixie.
 
questions
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AA Proposes Freezing Non Pilot Employees Pension

Thu Mar 08, 2012 4:45 am

Can anyone provide details and examples as to how the current pension system works? Was it a defined benefit or cash balance pension? Does AA also offer a 401K?

By example I mean something like, an employee making $90,000 with 20 years service, the pension benefit is ______.
 
ckfred
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Joined: Wed Apr 25, 2001 12:50 pm

RE: AA Proposes Freezing Non Pilot Employees Pension

Thu Mar 08, 2012 3:26 pm

A number of Fortune 500 companies have either frozen pension plans or closed them to new hires. What American is proposing for the non-pilot employees is becoming more common with companies that are in good financial health.

I know some companies, once an employee is vested, allow them to take a lump sum distribution upon separtation from the company (lay-off, resignation, termination for cause), but must take montly payments upon retirement. The lump sum is basically what the company contributed to the pension for the employee, without any appreciation from investments of those funds.

But, I don't know of many companies that allow retiring employees to take lump sum payments at retirement. My father was in labor and human resources for what was a Fortune 50 company, and no one was offered a lump sum, whether union or non-union. So, if AA were to get the pilots to agree to end lump-sum distributions at retirement, that would be bringing AA into line with most companies that still offer pension plans.
 
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Tugger
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RE: AA Proposes Freezing Non Pilot Employees Pension

Thu Mar 08, 2012 4:24 pm

Quoting aacun (Thread starter):
Its ironic because the pilots pensions are whats hurting the most.

However, as I read the OP, as the pilot's pensions are not being included in the "freeze don't dump" offer they are not seeking to keep/freeze them. In other words the pilot's pension is still in line to be dumped over to the PBGC to relieve the carrier of its cost burden.

Tugg
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. - W. Shatner
There are many kinds of sentences that we think state facts about the world but that are really just expressions of our attitudes. - F. Ramsey
 
ckfred
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Joined: Wed Apr 25, 2001 12:50 pm

RE: AA Proposes Freezing Non Pilot Employees Pension

Thu Mar 08, 2012 5:59 pm

Quoting tugger (Reply 6):
However, as I read the OP, as the pilot's pensions are not being included in the "freeze don't dump" offer they are not seeking to keep/freeze them. In other words the pilot's pension is still in line to be dumped over to the PBGC to relieve the carrier of its cost burden.

My assumption is that the offer is meant to put some pressure on the APA to agree to some management bargaining points, such as the issue of lump-sum payouts, in order to also have their pensions frozen. Let's face it, if the pilots' pension are terminated and taken over by the PBGC, pilots will see less pension than if the plan was frozen, because of PBGC limitations on payouts to retirees.
 
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Tugger
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RE: AA Proposes Freezing Non Pilot Employees Pension

Thu Mar 08, 2012 6:03 pm

Quoting ckfred (Reply 7):
My assumption is that the offer is meant to put some pressure on the APA to agree to some management bargaining points, such as the issue of lump-sum payouts, in order to also have their pensions frozen. Let's face it, if the pilots' pension are terminated and taken over by the PBGC, pilots will see less pension than if the plan was frozen, because of PBGC limitations on payouts to retirees.

  
Agreed.

So now we have to see if the others will agree to what is being proposed.

Tugg
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. - W. Shatner
There are many kinds of sentences that we think state facts about the world but that are really just expressions of our attitudes. - F. Ramsey
 
ckfred
Posts: 5188
Joined: Wed Apr 25, 2001 12:50 pm

RE: AA Proposes Freezing Non Pilot Employees Pension

Thu Mar 08, 2012 6:19 pm

Quoting tugger (Reply 8):
So now we have to see if the others will agree to what is being proposed.

I think I recall reading on the APA website that the union was suggesting to management that they preferred to have the plans frozen, rather than terminated. So, I think APA would be receptive. It would allow retirees to keep current benefits, and currently-employed pilots (especially those close to retiring) would get higher retirement pay than if the plan was terminated.

As for APFA and TWU, who knows? I know several AA pilots who were saying several months before the Chapter 11 filing that a bankruptcy was probably the only way to get AA back into financial health and able to compete with UA and DL. They even said that, hindsight being 20/20, that management should have skipped the restructuring in 2003 and gone into Chapter 11.

From the rhetoric I've read, the APFA and TWU aren't of that mindset. They still think that the problem lies with bad management, and that new people in the corporate suite would solve the problem. If you remember, a number of TWU leaders voted against submitting the tentative contract to the membership. I think that agreement called for either freezing the pension plan or closing it to new hires.

So, it will be interesting to see what happens.

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