U.S. Sen. Jim Inhofe (R-Okla.), a co-chair of the Senate Pilot's Caucus, and Sen. Sherrod Brown (D-Ohio), chairman of the Senate Finance Subcommittee on Social Security, Pensions and Family Policy, today introduced S. 2614, legislation that would extend to American Airlines employees the option to contribute recently received bankruptcy settlements into retirement accounts without incurring a tax penalty. This provision was made available to employees of other domestic airlines following their bankruptcies but expired before American Airlines filed for bankruptcy in 2011.
"American Airlines employees should be treated no differently from the hundreds of thousands of other men and women who support our nation's air service providers," said Inhofe. "The employees of American Airlines received compensation for some of the pension losses due to the bankruptcy, and Congress should give them fair opportunity to contribute these payments into other investment retirement accounts without paying a tax penalty. I am proud to work with Sen. Brown on this bill that ensures employees of American Airlines will be treated the same as employees of other airlines in similar situations."
"Pilots at American Airlines should have the same pension options available to them as their peers at United, Delta, Northwest, and US Airways," said Brown. "This commonsense bill will ensure that American Airlines pilots have the retirement security they deserve."
"On behalf of the 10,000 pilots and the tens of thousands of American Airlines employees whose retirement will be made more secure by the legislation Senator Inhofe is introducing today, I want to express our gratitude for his leadership on this fairness issue," said Captain Keith Wilson, president of the Allied Pilots Association. "Our colleagues all suffered significant financial damages in the AMR bankruptcy process, but the Inhofe bill will partially mitigate that harm by extending to American employees the same tax treatment afforded by Congress to the employees of previous legacy airline bankruptcies."
"We appreciate the efforts of Sen. Inhofe and Sen. Brown and we encourage Congress to take action to ensure American's employees are afforded the same opportunity as their peers at other airlines," said Will Ris, senior vice president of Government Affairs for American Airlines.
The Worker, Retiree, and Employer Recovery Act of 2008 allowed employees of air service providers, who filed bankruptcy prior to 2007, to roll up to 90 percent of airline bankruptcy settlements into an individual retirement account without paying tax penalties through April 15, 2013.
American Airlines did not declare bankruptcy until Nov. 29, 2011, and had not yet emerged from bankruptcy by April 15, 2013.
By making modifications to the Federal Aviation Modernization and Reform Act of 2012, S. 2614 would afford American Airlines employees the option to roll over bankruptcy contributions into individual retirement accounts without tax penalties, which is the same treatment extended to employees of other domestic airlines that went bankrupt prior to 2008. S. 2614 is companion legislation to H.R. 2591.