American Airlines defers pension contributions under CARES Act

With air travel praticially halted across the world as a result of the coronavirus pandemic, American Airlines said it plans to defer its minimum required pension contributions for 2020 totaling $196 million under the CARES Act.

American Airlines Inc., Fort Worth, Texas, plans to defer its minimum required pension plan contributions for 2020 totaling $196 million under the provisions of the CARES Act.

The airline announced it expects to defer the payment of the contributions to Jan. 1 in its 10-Q filing with the SEC on Thursday.

The amount includes a $193 million minimum required contribution for its corporate pension plan and a $3 million minimum required contribution for the pension plan of its wholly owned regional subsidiaries.

The Coronavirus Aid, Relief and Economic Security Act, signed by President Donald Trump on March 27, provides companies the option of a one-year holiday from making 2020 pension contributions, with interest accrued, until Jan. 1, 2021.

American Airlines contributed $1.2 billion to its pension plans in 2019, which included a $780 million minimum required contribution.

As of Dec. 31, the airline’s global pension plan assets totaled $12.9 billion, while projected benefit obligations totaled $18.2 billion, for a funding ratio of 70.5%, up from 61.6% at the end of 2018, according to its most recent 10-K filing. The company did not provide a breakout of U.S. vs. international pension plans. www.pionline.com