In a terse rebuttal to a series of management statements made to American Airlines employees regarding their pension plans, a federal pension protection agency says its coverage is not a back-up solution.
The Pension Benefit Guaranty Corporation is informing American's employees they may be on the hook if the airline cancels its pension plans as part of its Chapter 11 proceedings, as the PBGC doesn't insure retiree health benefits.
"American Airlines is telling their workers and retirees not to worry, but they should," said J. Jioni Palmer, PBGC's director of communications.
Recommended For You
PBGC staff suggest that American is purposely downplaying the consequences of the cancellation of its pension plans, attempting to shift the responsibility to the PBGC. It's estimated that approximately 13,000 current and retired employees could be affected by the move.
[See also: American Airlines reassures workers on pensions]
Palmer says that American's recent statements, to its employees and through its lead bankruptcy counsel, suggest that it is hoping to shift its retirement responsibilities to the PBGC. "American said nothing's been decided yet, but didn't even bother to pretend that it was trying to preserve its employees' pensions," Palmer said.
American filed for Chapter 11 protection on Nov. 29, 2011; the PBGC has been working with the airline to try to preserve benefits, as it has done with other airlines facing bankruptcy proceedings.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
