Miller asks pension agency to protect American Airline retirees, employees and U.S. taxpayers
WASHINGTON – Rep. George Miller (D-CA), the senior Democrat on the House Committee on Education and the Workforce, asked the Pension Benefit Guaranty Corporation today to avoid a potential termination of American Airlines’ pension plan that may leave taxpayers on the hook and threaten the retirement security of thousands of current and future American Airline retirees.
“Termination should only be a last resort and not part of any business strategy to exploit the bankruptcy process and dump pension liabilities onto the taxpayer,” Miller wrote to Josh Gotbaum, PBGC’s director. “To protect the taxpayer and plan participants, I urge you to avoid allowing a repeat of United Airlines. American Airlines employees and retirees, like those at United, have mortgages, tuition payments, and other financial obligations to meet. Participants in the American Airlines retirement plans made countless life choices in relying on the promise that a career with American would provide benefits adequate for them to comfortably live out their retirement years.”
In 2005, the PBGC and United Airlines ultimately agreed to terminate United Airlines’ pension plans. The PBGC also ceded its right to ever restore the plans to United Airlines, as well as its right to seek additional assets from United, should the company ever become profitable again. Not only did United reap profits in subsequent years, a GAO investigation found that leading up to and through the termination of United Airlines’ four pension plans, the airlines’ CEO at that time and two other executives received a total of about $55 million in salary, benefits and other compensation.