In the wake of American Airlines' announcement that it plans to terminate its pension plans as part of its bankruptcy reorganization, the Pension Benefit Guaranty Corporation has reiterated the company should reconsider the move.
"Before American takes such a drastic action as killing the pension plans of 130,000 employees and retirees, it needs to show there is no better alternative," said Josh Gotbaum, PBGC director. "Thus far, they have failed to provide even the most basic information to decide that."
The federal agency says Americans' pensions are underfunded by approximately $10 billion, and the company's retirees could lose more than $1 billion in the plans end.
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Under federal law, if a company in bankruptcy wants to end its pensions, it must demonstrate that doing so is the only way it can reorganize.
Airline management began announcing its plans to employees on Wednesday, which included cutting approximately 13,000 jobs, some 15 percent of its workforce.
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