A judge handling the ongoing bankruptcy of American Airlines Inc. and its parent company has approved a plan to modify the way retiring pilots can receive their pension benefits – as well as approving the airline's new contract with existing pilots.

The Dallas Morning News reports that U.S. Bankruptcy Judge Sean Lane approved a deal Wednesday which will eliminate an option that allowed some retiring pilots to receive the bulk of their pension benefits in one costly lump-sum payment.

Under the deal, those retirees will have to take their funds as a lifetime annuity payment.

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