AA Tries to Ease Pension Worries

Due to the economy, there are a number of people out there that are worried about their future, and rightfully so. After all, there are companies all over the world that are trying to find ways to save money. Over at American Airlines, employees are worried about their pensions. Now, the airline has been trying its best to ease these worries.

According to AA, more than 90 percent of its workers with vested pensions would not see reduced benefits. They would not see reduced benefits even if the airline terminated its pension plans, or so the airline says.

Jeff Brundage, who is the senior vice president of human resources, sent a letter to employees of the airline group on Monday. His goal here was to attempt to end workers’ fears about the future of their pensions. Since American’s parent company, AMR Corp., filed for bankruptcy in November, employees and their labor unions have express their concerns regarding pensions.

Mr. Brundage said, for the employees out there worried about their pension, don’t be. Even if the pension plans are terminated, more than 90 percent of participants would see no reduction in their pension benefits accrued as of the November 29, 2011 Chapter 11 filing date if payments begin at normal retirement age.

Despite all of this, the company did not disclose what it plans to do with its pension plans. After all, it has not yet discussed pensions in bankruptcy court filings. What people do know, is that the Pension Benefit Guaranty Corp estimated that AMR’s pension plan had about $8.3 billion in assets to cover about $18.5 billion in benefits. The company, which assumes responsibility for paying pension benefits if AA ends its plans, said that about $1 billion will be lost if the airline does away with its plans.

Things are not looking good for the pension plan as far as American Airlines is concerned. In fact, the airline only put back a $6.5 million pension contribution instead of the $100 million payment that was scheduled. This is one of the events that put people on edge.

Mr. Brundage finished up by saying that employees can rest assured that whatever happens with the company’s pension plans will happen as part of a comprehensive business plan aimed at making the airline more successful and profitable. Any changes are not meant to hurt the airline or its employees. They are put in place to help the airline grow and prosper for many years to come.

Overall, it is pretty easy to understand why so many people at the airline are worried about their pension benefits. With the way the economy has been recently, everyone wants to know what they can count on and what they cannot. To them, the pension at American Airlines is looking rocky at best.