WASHINGTON, D.C. – Today, U.S. Sens. Sherrod Brown (D-OH) and James Inhofe (R-OK) announced Senate passage of legislation that would enable nearly 100,000 American Airline employees who received lump sum settlements as part of the airline’s 2011 bankruptcy to roll those awards into individual retirement accounts (IRA). Without a legislative fix, nearly 10,000 Ohio workers would be ineligible for the same tax benefits on savings plans that workers at United, Delta, Northwest, and U.S. Airways received.
“This bill will prevent nearly 100,000 American Airlines employees from losing a substantial chunk of their hard earned retirement,” Brown said. “These pilots, flight attendants, mechanics, ramp workers, and dispatchers served the flying public with pride and kept us safe during our travel. This legislation ensures that these employees receive the same deal as other employees of airlines that also went through bankruptcy.”
The Brown and Inhofe legislation would amend the Federal Aviation Administration (FAA) Modernization and Reform Act of 2012 to afford American Airline employees the same tax treatment provided to employees of other domestic airlines. Under the Act, only airline employees whose company declared bankruptcy prior to 2007 are eligible to roll up to 90 percent of their settlement into an IRA.
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