U.S. Sen. Jim Inhofe (R-Okla.), co-chair of the Senate Pilot’s Caucus, and U.S. Sen. Sherrod Brown (D-Ohio), chairman of the Senate Finance Subcommittee on Social Security, Pensions and Family Policy, today released the following statements regarding H.R. 2591 being signed into law on Thursday.
H.R. 2591 is the companion bill to S. 2614, legislation authored by Inhofe and Brown that extends to American Airline employees the option to contribute recently received bankruptcy settlements into retirement accounts without incurring a tax penalty.
“I applaud Congress for ending the year by providing American Airline employees with the opportunity to rebuild their future retirement without penalty from the federal government,” Inhofe said. “American Airlines employs more than 5,800 Oklahomans, many of which will be able to benefit from this new law. I appreciate Sen. Brown for his work and support of this legislation.”
“This is great news for the nearly 100,000 American Airlines employees who could have lost a significant portion of their retirement savings had action not been taken,” Brown said. “American Airlines employees should have the same deal as everyone else. This law ensures that. I thank Sen. Inhofe for his work on this important bill.”
Inhofe and Brown introduced S.2614 on July 16. The legislation first passed by unanimous consent in the U.S. Senate on Dec. 10, signaling strong bipartisan support for passage in Congress. All revenue bills must originate in the U.S. House of Representatives, so on Dec. 11 the House passed its companion legislation, H.R. 2591, and the U.S. Senate passed it on Dec. 13.
The Worker, Retiree, and Employer Recovery Act of 2008 allowed employees of air service providers, who filed bankruptcy prior to 2007, to roll up to 90 percent of airline bankruptcy settlements into an individual retirement account without paying tax penalties through April 15, 2013. American Airlines did not declare bankruptcy until Nov. 29, 2011, and had not yet emerged from bankruptcy by April 15, 2013.
By making modifications to the Federal Aviation Modernization and Reform Act of 2012, H.R. 2591 affords American Airlines employees the option to roll over bankruptcy contributions into individual retirement accounts without tax penalties through April 15, 2015, which is the same treatment extended to employees of other domestic airlines that went bankrupt prior to 2007.