American Airlines officials expect to assume all or most of TWA’s $1.6 billion defined contribution plan assets once the TWA acquisition is completed. Mark Johnson, managing director-benefits compliance and pensions at Fort Worth, Texas-based American, said TWA employees will be given the opportunity to roll over their assets into the $6.3 billion American 401(k) plan. He said American probably will not take over the TWA plan and merge it with American’s but will accept the assets through asset transfers and rollovers.
The question of St. Louis-based TWA’s two troubled defined benefit plans is less certain. The PBGC took over responsibility for the TWA plans as of Jan. 1, when The Pichin Corp., a Carl Icahn company, notified the agency it would exercise its option to unilaterally terminate the two plans. The $300 million TWA pilots’ plan is underfunded by about $200 million, according to the PBGC, while the $821 million employees’ plan is underfunded by about $500 million.
