Fidelity Investments will assume the responsibility for American Airlines' 401(k) participants beginning in the middle of 2015.
The new relationship comes on the heels of the American and US Airways merger, announced in December of 2013. Fidelity has provided retirement services to US Airways since 1993.
The agreement means Fidelity will serve 120,000 combined participants with total plan assets worth approximately $14 billion for at least the next five years, according to a statement from Fidelity.
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American's workforce represents a participant investor base that can greatly benefit from technological innovations to plan administration. As an air carrier, their employee-base is dispersed around the country, and many of the plan's participants don't perform their jobs at a traditional workplace desktop.
Fidelity said that ability to provide a digital platform that can be accessed across all wireless devices was central to the airline's decision.
American Airlines filed for bankruptcy in November of 2011. It initially sought to terminate four defined benefit pension plans covering 130,000 American workers and retirees.
Then-director of the Pension Benefit Guarantee Corp., Josh Gotbaum, led a highly publicized effort to insist American maintain their pension obligations through the company's restructuring. The airline ultimately agreed to continue to fund their pension plans.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
