Originally Posted by
acl65pilot
Yep, their pilots that are eligible to take the lump sum are doing so and running knowing full well that CH11 would take it all away. Their PB will be massively underfunded when they enter and as a result it too will be sent to the PBGC.
Is there plan underfunded? It was not a year or so ago. If the plan is not underfunded to an extent that it would make it difficult for the company to emerge from Chapter 11 is can't be terminated.
In addition if the plan does reach a critical underfunding level then lump sums must be suspended regardless of if the company is in chapter 11. This happened at Delta prior to the termination of the plan. There has been no mention that the AA plan is near this level.
The run on retirements was caused by a provision in the AA plan that allows a lookback to retire at higher market rates. Anytime there have been a big slump in the market you get a surge in AA retirements using the lookback.