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November 08, 2012

Pilots board of directors meeting in Fort Worth

Only a few days ago, the Allied Pilots Association board of directors closed out a meeting without announcing any decisions regarding its contract negotiations with American Airlines.

And now the board is back in Fort Worth, meeting on Thursday in a "caucus" session and a strategy meeting, the APA said.

Also at the meeting, which will continue on Friday, the pilots met with Pension Benefit Guaranty Corp. director Josh Gotbaum and senior financial analyst Suzanne Kelly "on various issues pertaining to AMR's restructuring."

The hotline message sent out to pilots on Thursday night, did not reveal any details from the meeting. It did, however, detail a ruling by the U.S. Treasury that affects the freezing of American's pension plan A for the pilots.

"On Wednesday, Nov. 7, the United States Treasury Department and Internal Revenue Service released a final regulation that permits single-employer defined-benefit plan sponsors that are debtors in bankruptcy proceedings to eliminate single-sum distributions and other accelerated payment options. By permitting AMR to remove the lump-sum option, the new regulation enables an A Plan "freeze," rather than a plan termination. The freeze will preserve our pilots' accrued A Plan benefits and will require continued plan funding. The regulation, which amends anti-cutback rules under tax code Section 411(d)(6), is scheduled to take effect today.
"The APA leadership has consistently expressed support for a plan freeze versus plan termination, with APA Government Affairs Committee representatives actively lobbying in favor of amending the "anti-cutback" rules."

When American first unveiled its cost-cutting measures in February, the carrier planned to terminate its pension plans for pilots, flight attendants, mechanics and other union workers. After discussions with the PBGC and its unions, American agreed to freeze its workers' pensions. The freeze went into effect on November 1.

-Andrea Ahles

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