American Airlines Freezes Pensions

: Chris Lee Law Firm

  Filed under: News

american airlinesThe American Airlines bankruptcy case has brought much attention and staunch debate among industry officials. After the company announced another round of steep job cuts and a plan to end employee pension programs, many protested outside of the local Dallas-Fort Worth hub. In an effort to continue debt resolution and minimize further impact to employees, American Airlines has changed their minds regarding some prior decisions.

On Hold

American Airlines officials announced Wednesday that they now plan to freeze pension funds rather than eliminate them. This news is pleasing for most employees, who feared the worst just a short time ago. After much criticism and fight from employee unions, the company has gone back to the drawing board to find another way to reorganize.

As the company continues to reorganize in bankruptcy, many workers will find their pension funds frozen for the time being. The freeze is said to apply to flight attendants and ground workers only.  The company decided against freezing the pensions of pilots fearing a surge in retirement, leaving the company without enough staff to operate. Under the pension freeze employees will not be able to earn additional retirement benefits, saving the company an estimated $1 billion per year.

 

 


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