please explain. that is a serious question. While pensions invest in both stocks and bonds, normally payout issues are tied to bond rates and not the stock market. I know lump sum payouts are normally based on interest rates, that bottomed out a long time ago, the best time to retire. If the stock market goes to 5000, without dumping the pension plan and assuming the pension plan is losing money because of the falling stock market, the company would be required to put more cash into pension fund to cover the liabilities. If the market goes to 50k, most likely assets within the plan would go up requiring less cash to be put into the plan by the company to cover future liabilities.
If i got it wrong i would love to know where just so i don't keep spouting of incorrect info.
The AA "A-fund" is a simple Final Average Earnings computation based on the best year of the last five years times some multiple and a conversion to a lump sum, if that's what you choose.
The B fund is, as far as I can tell from the charts, 100% in equities.
AMR "purchases" units in the B-fund for us each month based on pay. The unit value in 2007 was $114.XX. The current unit value is $87.XX.
The problem lies in that, when most people were hired at AA, they were told they would retire with $3 million lump. (Or, they were led to believe that by those senior to them.) That "$3 million" has turned into $1.5 even for those with what most would consider a "golden career".
If the B fund unit value gets back up to $100, at least they are looking to be in the $2 million range and that's do able.
AA is not what most people would consider "a fun place to work". So, even guys at the top of their profession (777/767 Capt.'s) aren't having a rockin' good time on trips. That removes an intangible enticement to continue working. What's left? Mo' money.
I'm sure more than a few are hanging around waiting for either the market to come back or the new contract to start paying big bucks again. But, people smarter than me have proven on the union message board that, even by not drawing on their retirement and continuing to bring in $200k/year flying the 777 they are ultimately losing money.
Sorry if I sounded snippy in my original post. This gets kind of Byzantine even when you work at AA, let alone if you don't.
TC