Senate Continues To Move Ahead With Reform Legislation

As the US Senate moves forward with comprehensive pension reform, the three unions at American Airlines urged Congress to ensure companies that continue to fulfill their pension funding obligations are not disadvantaged by the final legislation. Congress has been considering a special airline-specific provision that would permit carriers that have frozen their defined-benefit plans to extend the amortization period for full funding to 14 years, and it also includes the ability to use a "reasonable interest rate" while doing so.

"As contemplated, this provision would withhold amortization and interest-rate relief from companies such as American Airlines that have continued to fund their defined-benefit plans and remained solvent both as a result of employees' sacrifices and the collaborative implementation of an effective business strategy," said Captain Ralph Hunter, Allied Pilots Association (APA) President. "We believe our efforts at pension preservation should be recognized, not punished. American Airlines should be accorded at least the same consideration as companies that have determined they cannot meet their funding obligations."

"American's defined-benefit plans are the best funded in the airline industry," said Tommie L. Hutto-Blake, Association of Professional Flight Attendants President. "They have been managed prudently over the years and have earned an average of well over 10 percent. We need legislation that does not force us to freeze our plans."

"There should be a responsible alternative to a freeze for companies and their employees that focused on maintaining their plans' viability," said James C. Little, International Executive Vice President & Director Air Transport Division, Transport Workers Union. "It makes no sense to penalize us for taking a path dedicated to maintaining our historically sound plans."

FMI: www.alliedpilots.org, www.apfa.org, www.twuatd.org, www.aa.com