[QUOTE=Wasatch Phantom;1101499]As PG said, "How do you figure"?
The concept of Present Value is the amount of money, with an assumed rate of return, that will yield an income stream for a set period of time. So let's say the benefit was $5,000.00 per month, the assumed rate of return was 5%, and the life of the income stream was 25 years. That amount of money would be roughly $850K.
My understanding is AA pilots had the option of a lump sum or a monthly check. If as Slowplay says, all of that retirement is qualified then you are owed the benefit by the PBGC (assuming AMR terminates that pension plan) instead of AMR. The PBGC does not make lump sum payouts so you would receive a monthly check. The benefit hasn't changed.
Granted most of us would prefer a check for the lump sum, but I'm virtually certain many a pilot who has received a lump sum has managed to lose a fair amount, as they weren't the investment geniuses they thought they were.
I suppose you could (successfully) argue that if one died three months after retiring one's heirs would inherit the lump sum, but would get nothing (or perhaps a reduced benefit) from the PBGC.
But the converse is also true. Suppose the lump sum was based on a 25 year annuity but you lived for 35 years. You'd receive more via the monthly check than the lump sum.
What am I missing?[/e
max monthly PBGC pay, based on current mortality tables and age 65 retirement is somewhere around 4900 per month. This decreases if you are younger than 65. PBGC does NOT usually make you whole. There may be exceptions.