American Airlines 2008 Annual Report Download - page 83

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80
10. Retirement Benefits (Continued)
A one percentage point change in the assumed health care cost trend rates would have the following effects (in
millions):
One Percent
Increase
One Percent
Decrease
Impact on 2008 service and interest cost
20
(20)
Impact on postretirement benefit obligation
as of December 31, 2008
224
(219)
The Company has no required 2009 contributions to its defined benefit pension plans under the provisions of the
Pension Funding Equity Act of 2004 and the Pension Protection Act of 2006. The Company’s estimates of its
defined benefit pension plan contributions reflect the current provisions of the Pension Funding Equity Act of 2004
and the Pension Protection Act of 2006. The Company expects to contribute approximately $13 million to its
retiree medical and other benefit plan in 2009.
The following benefit payments, which reflect expected future service as appropriate, are expected to be paid:
Pension
Retiree
Medical and
Other
2009
$ 514
$ 163
2010
565
168
2011
587
176
2012
617
175
2013
728
181
2014 – 2018
4,372
1,007
During 2008, AMR recorded a settlement charge totaling $103 million related to lump sum distributions from the
Company’s defined benefit pension plans to pilots who retired. Statement of Financial Accounting Standards No.
88, "Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for
Termination Benefits" ("SFAS 88"), requires the use of settlement accounting if, for a given year, the cost of all
settlements exceeds, or is expected to exceed, the sum of the service cost and interest cost components of net
periodic pension expense for a plan. Under settlement accounting, unrecognized plan gains or losses must be
recognized immediately in proportion to the percentage reduction of the plan's projected benefit obligation.