JAL seeks 40% pension benefits cut for bailout

JAL seeks 40% pension benefits cut for bailout

Tokyo: Ailing Japan Airlines has proposed a revised pension plan that would see an average cut in benefits of more than 40%, the company said Monday.

“Under the current condition, it is difficult for the company to turn around itself without public funds," JAL president Haruka Nishimatsu said in opening remarks at a meeting with some 1,500 former employees.

“I would like to tell you humbly that the company needs to revise the pension plan," he said, stressing that the carrier needs public support to receive government funds.

Nishimatsu told reporters after the meeting: “I asked for understanding that the pension benefits would be largely slashed by over 40%."

“I would like to continue the effort of explaining," he said. “Without revising the pension plan, we cannot move forward."

The cash-strapped flagship carrier is seeking an injection of public money to boost its capital as it restructures under the supervision of the government-backed Enterprise Turnaround Initiative Corp. of Japan.

The burden of heavy pension obligations are behind much of its current financial troubles.

Specifically, the company proposed pension payouts be reduced by lowering the yield from the current 4.5% to about 1.5%, reports said.

The revision would cut more than 30% of pension benefits for retired workers and 50% for current employees, they said.