American Airlines' Potential Pension Crisis Has Tulsa Retirees Worried

American Airlines is expected to freeze or even terminate its pensions and renegotiate plans with the union.

Tuesday, January 31st 2012, 9:59 pm

By: News On 6


American Airlines is expected to announce Wednesday that it's freezing or even terminating its pensions.  That would affect 130,000 employees and retirees around the world.

American only paid a fraction of the required contribution towards its pension plans in recent months. The company was supposed to pay $100 million quarterly, but only put in $6.5 million.

Last week the company sent a letter to employees and retirees trying to calm their fears about their pensions.

"For those whose pension benefit has vested, if the pension plans are terminated, more than 90 percent of participants would see no reduction in their pension benefit accrued as of the November 29, 2011 Chapter 11 filing date if payments begin at normal retirement age," wrote Jeff Brundage, Senior Vice President of Human Resources for AMR.

Brundage also says in the letter that the company has paid more than $236 million in premiums to the Pension Benefit Guaranty Corporation since 1994 to protect employee benefits. 

But an American retiree in Tulsa says Wednesday's announcement will be just the beginning of the employees paying the price for the airlines' bankruptcy.

American Airlines retiree David Wilhelm says nothing good comes out of an airline's bankruptcy. And the potential rumblings of frozen or terminated pensions has him watching his wallet.

"I'm watching pennies because I don't know what to expect. I expect the worse. That way if it doesn't happen I'll feel pretty good," Wilhelm said.

He says the worst case scenario for him and thousands of other retirees: completely losing out on their retirement and pensions.

"Every other airline has done it. Why not American?" Wilhelm asked.

Since the airline filed for bankruptcy, he and his wife have been on pins and needles each month, watching their bank account. They're hoping to see the full dollar amount deposited.

Wilhelm retired from American last February after 27 years. He says a perk of being retired is playing baseball with his grandkids.

The Union assured its member's pensions wouldn't be touched. But Wilhelm says that promise offers little comfort. Nothing is safe.

"Our whole retirements will be in jeopardy right now. I wish the company and the union would both admit it," he said.

Wilhelm says the chatter among retirees is, that they may have to come out of retirement.

"If they cut it the way they think I will, I'll have to go back to work. I'm 67 and I don't really want to go," he said.

Reports say other changes expected include pilots and flight attendants working more hours each month. And the outsourcing of thousands of other jobs like cabin cleaners and baggage handlers.

1/30/2012 Related Story: Union Announces Effort To Support American Airlines Jobs In Tulsa

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