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Published: Thursday, 12/1/2011

Taxpayer liability likely for airline's pensions

BLADE STAFF AND NEWS SERVICES

LONDON — U.S. firms or taxpayers could end up paying for the bankruptcy of American Airlines if the carrier abandons its pension plans as part of a restructuring, U.S. pension insurers told the online Financial Times of London on Wednesday.

Taking on the airline’s pension plans would widen the Pension Benefit Guaranty Corporation’s financial deficit and could require the insurer to charge higher premiums, director Joshua Gotbaum, head of the federal agency that insures private pensions, told the newspaper.

Tom Horton, new chief executive of American and parent company AMR, said the Chapter 11 filing did not mean its pension plans would definitely move to the agency, but he signaled it was a possibility, the article said.



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