In a letter to American Airlines pilots Friday, senior vice president of people Denise Lynn said the company plans to contribute an amount equal to 11 percent of a pilot’s pay to his or her 401(k) plan while management and the Allied Pilots Association negotiate a new contract.

At present, American funds a defined-benefit pension (the A Plan) and a defined-contribution plan (the B Plan) for pilots. The B Plan currently gets an 11 percent contribution.

American plans to freeze and stop funding both the A Plan and B Plan as of Nov. 1. In negotiations with the APA, it has proposed putting an amount equal to 14 percent of a pilot’s pay in a 401(k) plan.

Lynn said in her letter that management understands that pilots are concerned about uncertainty over their retirement benefits. The 11 percent interim contribution, pending a tentative agreement and membership approval, is “to attempt to assuage those concerns, and to ensure there is no gap in retirement benefits for pilots when the current retirement plans freeze,” she wrote.

She also expressed hope “that by Nov. 1 the APA Board will approve a tentative agreement.” The APA board is scheduled to hold a special meeting from Wednesday, Oct. 31, through Friday, Nov. 2. 

Keep reading for the entire letter.

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