Pilots at American Airlines will vote on a company proposal that would freeze their defined benefit pension plan.
The proposal would also terminate the pilots’ money purchase defined contribution plan and direct its assets and all future contributions into an existing 401(k) plan.
The board of the Allied Pilots Association on Thursday approved putting to a membership vote the airline’s June 25 offer to freeze the DB plan and contribute 14% of pay into the 401(k) plan. “(Participants) will all be going to the 401(k) Supersaver,” said American spokesman Bruce Hicks in an interview.
Pilots would also get a 13.5% equity stake in the company, increasing its voice on the creditors committee for parent AMR Corp., which is under Chapter 11 bankruptcy protection.
The pilots will vote July 25-Aug 8. U.S. Bankruptcy Court Judge Sean Lane has agreed to postpone a decision on whether to terminate contracts for all the airlines unions until the pilot voting ends.
AMR has already agreed to freeze three other defined benefit plans for other union workers, but has to finish labor talks on other issues.
American’s four pension plans have $8.3 billion in assets and $18.5 billion in liabilities, according to the latest 10-K filing. DC assets totaled $9.4 billion, as of Sept. 30, 2011, according to Pensions & Investments data, the most recent available.