Hard Freeze Follow Up Hotline
This morning the company notified the APFA of an update to their term sheet. The company changed their proposal from terminating the pensions to a “hard freeze” of the pensions. Although we are encouraged that AMR management has made a small first step towards compromise, APFA’s professionals will evaluate the impact of a hard freeze on our membership’s unique demographics and interests. American Airlines Flight Attendants have sacrificed a great deal for this company and they each deserve fair treatment throughout reorganization. To that end, the APFA will perform our due diligence and continue to negotiate an early-out package to mitigate the proposed layoffs with a dignified solution. APFA is taking these negotiations very seriously and we look forward to resolving this dispute outside of bankruptcy court.
What is a “Hard-Freeze” for the pension?
Typically, a Hard-Freeze stops any future growth in a pension. All benefits accrued up to the negotiated Freeze-Date are protected. However, we have yet to receive a full explanation of how the Company defines a “hard freeze”. Also it remains to be seen if the current pension plan can be maintained without being more costly than a hard freeze along with the company’s proposed defined contribution plan.
We will continue to provide updates via this Hotline as additional information becomes available.