Your Pension Benefit is Safe and Retirement Contributions Will Continue
May 7, 2021
We want to assure members that valuable American Airlines contributions toward your retirement will continue up to, through, and post transition to AMFA. We want to be very clear that you will not lose the vested pension benefit you have earned in the IAM National Pension Fund (“IAM Plan”) as a result of a change from TWU/IAM to AMFA.
A change in representation will result in a change in who administers the retirement program and the type of retirement plan American Airlines contributes to on your behalf. Regardless, American Airlines contributions will continue through this process. While we evaluate and negotiate options, we have a strategy in place to ensure a smooth and transparent transition. Here is how this will work:
1) Your Current IAM Plan Benefit
The benefit you have earned in the IAM Plan will be “frozen.” This just means American Airlines contributions made on your behalf will stop going into the current IAM Plan, and future contributions will be redirected into a different retirement saving vehicle. Freezing the IAM Plan does not change or impact the benefit you have earned up to the freeze date, provided you are vested (with five years of service under the IAM Plan). Your vested benefits remain intact and cannot be taken away; you can start your retirement benefits in the future under the terms of the IAM Plan.
2) The Transition Period
Starting from day one, AMFA is prepared to handle the money American Airlines contributes toward your retirement.
In preparation for a favorable vote, we have engaged a third party to administer the transition while the details of a permanent retirement program are worked out. During the transition, the administrator will track the retirement contributions made on your behalf, including any earned interest. Periodic statements will be provided to you so that you can see your balance, though you won’t have access to this account (similar to any defined benefit retirement program).
3) Your Future Retirement Benefits
Our preference for your future retirement program would be under a defined contribution plan (like a 401(k) plan) administered by American Airlines. Until we are permitted to bargain on your behalf, we don’t know whether American will agree to this. In the event they don’t, we are prepared to establish a new defined contribution plan sponsored by AMFA.
Once a final decision is made on the permanent retirement program, the transition account will be transferred over, and you’ll receive a final statement reconciling that activity. Going forward, you’ll be able to see and make decisions regarding your retirement benefits under the new program.