AA buying out some pensions?

[eolesen]

My wife worked for AA for a number of years, and just got a letter from AA offering her to take a lump sum on her pension or start drawing it now.

The lump sum is ridiculously small in comparison, as is the monthly annuity they're offering, so we will probably pass.

Did anyone else get this? I didn't get it for mine, so I'm assuming there's a cash value cutoff somewhere on who qualifies and who doesn't.

 

[mike33]

My wife worked for AA for a number of years, and just got a letter from AA offering her to take a lump sum on her pension or start drawing it now.

The lump sum is ridiculously small in comparison, as is the monthly annuity they're offering, so we will probably pass.

Did anyone else get this? I didn't get it for mine, so I'm assuming there's a cash value cutoff somewhere on who qualifies and who doesn't.

Maybe now that AA is making all this $$, they don't want the Govmnt telling them they have to distribute over funding or start funding it again. Usually overfunding goes back to the company as was with PSA. Not sure of the current laws though

 

[eolesen]

Not sure where you got the notion that overfunding can go back to the company... They can certainly pull back on their contributions as long as forecasted obligations will be met, but that's the practical limit of any benefit from an overfunded pension.

Let's say a plan was overfunded by 10-15%... Under laws in place since the late 80's, anything the company tries to extract would be penalized/taxed to the point where the company would lose money in the transaction. A pension would have to be at 140-150% funding for there to be any possible financial benefit to the company to try and take money out. None of the airline plans will ever be at that point.

 

[1AA]

https://www.yahoo.com/finance/news/really-over-corporate-pensions-head-050108115.html

 

[jimntx]

Wonder what the "threshold" is to be considered for a buyout. I have not gotten a buyout offer and my pension is fairly small since it was frozen in the bankruptcy. Of course the fact that it is small may be the reason why there's been no offer to terminate it.

 

[swamt]

https://www.yahoo.com/finance/news/really-over-corporate-pensions-head-050108115.html

Just goes to show that the pensions will be dead some time in the future. I have said this many times about these pensions. I will say over the next decade we will see more than 50% of current pensions gone, frozen, terminated, or co's trying to do the buy-outs and such. With the lower and lower participation within these pensions they are getting harder and harder to keep funded and soon no pension will be able to pay what was promised. Also why so many employers are going with different retirement options.

 

[Buck]

Wonder what the "threshold" is to be considered for a buyout. I have not gotten a buyout offer and my pension is fairly small since it was frozen in the bankruptcy. Of course the fact that it is small may be the reason why there's been no offer to terminate it.

American's Airlines pension is frozen and unless the company wants to beef it up, to get those of qualified to leave.

 

[jimntx]

American's Airlines pension is frozen and unless the company wants to beef it up, to get those of qualified to leave.

I'm aware of that. But, E's wife got a buyout offer for the same pension plan I'm in. So, the fact that it is frozen seems not to make a difference, nor does current status. I've been drawing a pension for over 2 years now. I gather from what E posted that his wife is not drawing hers as of yet.
I'm just curious as to criteria they are using to determine who gets a buyout offer and who does not.

 

[Buck]

I'm aware of that. But, E's wife got a buyout offer for the same pension plan I'm in. So, the fact that it is frozen seems not to make a difference, nor does current status. I've been drawing a pension for over 2 years now. I gather from what E posted that his wife is not drawing hers as of yet.
I'm just curious as to criteria they are using to determine who gets a buyout offer and who does not.

Wasn't E's post in 2015?

 

[eolesen]

Yep. That offer has long since expired....

 

[jimntx]

As Emily Latella might say, "Never Mind."

I never think to look at posting date. I just assume that if it appears on Active Topics page, it must be new, or at least not so old..

 

[eolesen]

Yeah, that's because moderators don't typically lock topics down for inactivity....

 

[1AA]

Yeah, that's because moderators don't typically lock topics down for inactivity....

I found this article and tried to find a topic that was appropriate. I can't see why anyone would time stamp the original post to this article. I thought it was relevant.