(n) Prefunding Trust (Memorandum of Understanding Between American Airlines,
Inc. and Transport Workers Union of America AFL-CIO, April 02, 1992)
Article 41(n) expresses the understanding of the parties regarding the amendments to
the Trust Agreement and Plan effective January 01, 1993, governing the health benefits
provided to active TWU represented employees of American Airlines, Inc. at retirement
and the health and other welfare benefits provided to retired employees of American
Airlines, Inc. who were represented by the TWU at the time of retirement.
Article 41(n) will not be construed to modify or alter an employee’s eligibility for retiree welfare
benefits under the collective bargaining agreement or the Plan.
(1) The Trust Agreement and the Trust which holds Plan assets is established
for the exclusive benefit of TWU represented active employees and retired
employees who were represented by the TWU at the time of retirement.
(2) The Trust will maintain a separate account to hold reserves equal to the
Participants' prefunding contributions, Employer prefunding contributions, and
investment earnings attributable thereto reserved for retiree welfare benefits due
to Participants under the terms of the Plan and to pay administrative expenses
associated with such Program. In the event of termination of the Plan and/or
Trust, the balance of the reserves will be distributed as provided in
Article 41(n)(8). In no event will these reserves be used for payment of any expenses
associated with the active employees medical benefits program or for any other
purpose except those identified with respect to retiree welfare benefits in Article
41(n), the Trust Agreement, and the Plan.
(3) An employee participating in the Retiree Prefunded Benefits Program will
make a monthly contributions to the Trust Fund. If an employee was an active
employee of American Airlines on December 31, 1989, and elected to prefund
when first eligible, his contribution was $10.00 per month in 1992, and such
contribution amount is subject to the Escalator, described in Article 41(n)(5), in all
future years. If an employee was not an active employee of American Airlines on
December 31, 1989, or was an active employee of American Airlines on
December 31, 1989, and declined participation when first eligible, his contribution
amount is determined based on the age at which he begins participation in...
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