WASHINGTON, Dec. 3 (UPI) -- American Airlines' bankruptcy could place a heavy burden on the Pension Benefit Guarantee Corp., which insures the pensions of U.S. workers, officials say.
The PBGC assumes responsibility for paying the pensions of retirees from companies that can no longer handle their pension plans. American Airlines, which has not yet decided whether to end its pension plan, would be the largest claim ever on the federal agency's resources if it does, The Washington Post reported Friday.
The funds used to pay pensions do not come from government revenues. Instead the agency acts like an insurance company, collecting premiums from employers.
But the continuing economic slump has added 57,000 people this year to the PBGC's rolls and created a $26 billion deficit. American Airlines could add another $9 billion to that load.
"If the PBGC becomes responsible for the pension plans of American Airlines, the need for premiums to be raised will be greater," Joshua Gotbaum, the agency's director, told the Post. "The alternative is that at some point PBGC will be faced with the awful choice between needing a taxpayer bailout or not paying people pensions. We don't want to get there."
AMR Corp., the parent of American Airlines, filed for Chapter 11 reorganization Tuesday in New York.
