Pension Contribution

[UPNAWAY]

Some have been asking the company to contribute more and they have.

"
American Airlines books $467 million pension contribution for 2018
American Airlines Group Inc., Fort Worth, Texas, expects to contribute $467 million to its pension plans in 2018, the company announced in its 10-K filed Wednesday.

Of the $467 million, $425 million is a discretionary contribution and $42 million is required."


http://www.pionline.com/article/201...oks-467-million-pension-contribution-for-2018

 

[jimntx]

Is this for the frozen pension plans of the peons or the management pension plans (which are not frozen, as I understand)? From what I could tell from the linked article, it is for pension plans that are still "active." Or, at least the article is written that way.

 

[IORFA]

I got the impression that it was for the frozen plans.

 

[UPNAWAY]

I am unaware of any MGMT Pensions, non union have a 401K.

 

[jimntx]

I do not consider a 401-K to be a "pension" plan. A pretty good way to save money for retirement, yes, but not a pension plan. Pension plans as defined under Federal law require much stricter stewardship of the funds by the company because a defined benefit plan guarantees you a specific amount of money if you work X number of years (and have Y amount of contributions by you--assuming it's a contributory defined plan). If the investment manager does badly and there are not enough funds to cover your pension payments, the company has to make up the difference. (It's also one of the major reasons companies are dumping their pension plans at the first opportunity.) With a 401-K, you are in control of the investments which make up your portfolio. You are also fully responsible if your investment choices go belly-up. The company is not required in any way to cover your losses.

Also, the 401-K requires a specific payment amount based upon the percentage taken from the employee's paycheck and the matching percentage agreed upon by the company. I'm fairly certain that AA is not putting one dime more than they have to into the 401-K plans.

 

[Buck]

The Frozen Pension still must be maintained by the pension rules. I believe that our frozen pension must be maintained at 85%.

 

[WeAAsles]

The Frozen Pension still must be maintained by the pension rules. I believe that our frozen pension must be maintained at 85%.

“As of Dec. 31, American Airlines had $11.4 billion in total defined benefit assets and $18.28 billion in benefit obligations for a funded status of 62.4%, up from 58.1% at the end of 2016“

 

[Buck]

“As of Dec. 31, American Airlines had $11.4 billion in total defined benefit assets and $18.28 billion in benefit obligations for a funded status of 62.4%, up from 58.1% at the end of 2016“

If I am correct, Parker and company have work to do.

 

[WeAAsles]

If I am correct, Parker and company have work to do.

They do have to make more accelerated funding requirement payments in the next few years. Not sure exactly how much though.

 

[jimntx]

The Frozen Pension still must be maintained by the pension rules. I believe that our frozen pension must be maintained at 85%.

I hadn't thought of that. Thanks.

 

[jimntx]

They do have to make more accelerated funding requirement payments in the next few years. Not sure exactly how much though.

Maybe not. If meeting their obligations becomes too burdensome (like, having to cut executive bonuses to have the funds to make the accelerated payments) they could always go back into bankruptcy.

 

[eolesen]

Pretty certain I got a notice when the Management plan was frozen. They were combined with the agents and support staff.

Maybe officers kept their own pension, but I would have expected them to be in a 401K or a non-qualifying plan because the overall payments exceed the PBGC max by quite a large margin.

 

[WeAAsles]

Maybe not. If meeting their obligations becomes too burdensome (like, having to cut executive bonuses to have the funds to make the accelerated payments) they could always go back into bankruptcy.

They won’t go back into Bankruptcy. With a Republican Administration (Dems would do it too) they’ll just Lobby that they need even more time to make the payments and extend it out further.

 

[jimntx]

They won’t go back into Bankruptcy. With a Republican Administration (Dems would do it too) they’ll just Lobby that they need even more time to make the payments and extend it out further.

True, but that approach would not eliminate the financial burden. They would still have to carry that liability on the books which affects the stock value.

A nice clean bankruptcy with a good Republican judge could eliminate the obligation once and for all.
Cynical? Moi? How could you say such a thing?

 

[Buck]

They won’t go back into Bankruptcy. With a Republican Administration (Dems would do it too) they’ll just Lobby that they need even more time to make the payments and extend it out further.

So what you are saying Republican and Democrat politicians are the same when they get to Washington DC or TWU International.