PBGC backs plan for no lump-sum pension payments to American pilots

By Jerry Geisel, Business Insurance

The Pension Benefit Guaranty Corp. disclosed Friday that it supports American Airlines Inc. parent AMR Corp.’s request to a federal bankruptcy court for permission to allow the airline to amend its frozen pilots’ pension plan so that retiring pilots cannot receive their accrued benefits as a lump sum.

The PBGC said in a filing with the U.S. Bankruptcy Court for the Southern District of New York that elimination of the lump-sum option is necessary to avoid a distress plan termination before AMR emerges from bankruptcy and a huge loss to the PBGC.

The bankruptcy court has scheduled a hearing Wednesday on AMR’s proposal.

http://www.businessinsurance.com/article/20121217

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