Well if historically 99% of the pilots took the lump sum, then in order to be fully funded the plan would have been funded with that in consideration. The only thing that could have changed would have been the number of people retiring at once but that should not be a problem because a lot of pilots are retiring later due to the 65 rule. They got to hold on to those funds an extra 5 years.
Actually, AA pilots did not, as a group, choose to work the extra five years. AA's pilots (like several other workgroups) can retire at 60 with full benefits, so no need to work to age 65. From December, 2007 thru October, 2011, not one AA pilot celebrated their 65th birthday (as no AA pilot was older than 60 in December, 2007 when the mandatory retirement age was extended to 65). Even though no AA pilots faced mandatory retirement in those four years, a total of 956 AA pilots retired anyway, many of them to take advantage of the 3-month lookback (of their B plan) so that when the market took big hits, large numbers of pilots retired within 90 days so that they could use the older, historic values for their B plan balance. That provision insulated them from abrupt stock market declines, since they had 90 days' hindsight available to them.
As you know, the AA pension plans were fully funded immediately before the 2008 stock market meltdown and ensuing Great Recession. But actuaries don't anticipate that participants will retire in numbers that are five to ten times the normal rate - they assume that employees will retire based on historical trends.
What doesnt make sense is the comapny at one time was threatening to lay off hundreds of pilots, well with the SIS policy they would be seeing pretty much the same thing they are saying they cant afford to let happen now. If hundreds of pilots had taken the SIS and 99% have historically taken the lump sum then why is there a problem now? Is it the lump sum thats the problem or is losing the pilots the problem? Are they hoping by eliminating the lump sum more pilots will stick around hoping to get it back?
The lump sum, says AA, will cause massive retirements the day AA emerges from Ch11 unless the lump sum is eliminated. More than 2/3 of AA's pilots are eligible for retirement (age 50 with 10 years of service). In AA's motion to eliminate the lump sum, AA estimated that more than 40% of them would be able to withdraw at least $500k from the A plan.
The real problem, however, isn't that thousands of pilot retirements would drain the pension plan (although that would be a financial nightmare); the real problem is that AA would be unable to fly most of its 777 and 763 and a lot of 757 flights if the lump sum option remained and it could take months, maybe a year or more, to recover from the training bottleneck before it could fly the current schedule. Not only would most 777, 763 and 757 pilots immediately retire, but so would an estimated 95% of the Check Airmen - so who would remain to help train and evaluate the narrowbody pilots as they filled the vacated widebody spots?
I realize that for you and perhaps some others, you'd cheer a shutdown of AA. But management is paid to run an airline in Ch 11, not to liquidate an airline, so management is going to attempt to prevent the pilots from shutting down the airline by eliminating the lump sum option. Gotbaum at the PBGC agreed that the rules had to be changed to prohibit the lump sum or else AA would have no choice but to terminate the A plan. AA's pilots will retire more comfortably with a frozen A plan than they would with a terminated (handed over to the PBGC) A plan, so pilots will support management's motion. Far from being a "shafting" as AMFADave/Informer alleged, this motion was expected and won't be opposed by the APA.
AA's memo of law goes into a lot of detail about AA's fears of massive retirements if the lump sum were not eliminated:
http://www.amrcaseinfo.com/pdflib/5414_15463.pdf