10.22.24 – Contract Implementation Update #9: One-Time Ratification Bonus/ Retro Pay Explained

Tuesday, October 22, 2024

Contract Implementation Update #9:
One-Time Ratification Bonus (Retro Pay) Explained

In this hotline:

• Retro Pay Important Dates and Deadlines
• When will I receive my Retro Pay?
• Am I eligible for Retro Pay?
• What are 401(k) eligible earnings?
• Retro Pay and your 401(k)
• Changing Your Special Election 401(k) Contribution
• When is the last day to change my Direct Deposit for the Retro Pay Deposit?

Retro Pay Important Dates and Deadlines

When Will I Receive my Retro Pay?

The one-time payment for eligible Flight Attendants will be issued on November 8, 2024, and viewable in the Pay Portal (pay.aa.com) on November 6, 2024.

Am I Eligible for Retro Pay?

To be eligible for retroactive pay, you must meet the following criteria:

• You received earnings as a Flight Attendant during the eligible time period (January 1, 2020, to August 31, 2024).
• You are on the Flight Attendant system seniority list on the effective Date of Ratification (September 12, 2024).
• You are employed by American Airlines as a Flight Attendant on the payment date (November 8, 2024).

What are 401(k) Eligible Earnings?

Eligible earnings typically include base pay, overtime, premium pay, training pay, vacation pay, sick time, and incentive payments calculated based on hours worked, such as holiday incentives.

Ineligible earnings (not all-inclusive) include payments unrelated to hours worked, such as commissions, incentives, expense reimbursements (TAFB), employee recognition gross-up (Non-Stop Thanks, Chairman’s Award, etc.), profit-sharing payouts, other pay not eligible for employer 401(k) contribution, and imputed income.

Retro Pay and Your 401(k)

You may choose to deposit up to 100% of your retroactive pay into your 401(k) through a special election at Fidelity NetBenefits, or call 800-354-3412.

Changes 401(k) special elections must be completed by 1600 ET on November 1st, 2024.

Important Reminders for 401(k) Contributions:

• The 401k IRS contribution limits (2024) for employee contributions are $23,000. If you are 50 or older, you can make an additional $7,500 in catch-up contributions, increasing your annual employee (individual) contribution limit to $30,500.

• You are not allowed to over contribute. Once you have reached your contribution limit the remaining income will be processed in accordance with supplemental IRS wage withholding regulations.
• Retroactive pay is categorized as supplemental wage withholding by the IRS. The current rate for withholding supplemental pay is a flat 22% for amounts up to $1 million for the year. For additional tax-related queries, it’s best to seek advice from a tax professional.
• Retroactive pay is still subject to federal Social Security & Medicare withholdings; as well as applicable state taxes.
• Special elections need to be completed by 1600 ET on November 1st, 2024, to be processed in time for the Retro Pay distribution and can be made by logging into Fidelity NetBenefits or by calling the American Airlines 401(k) Center at Fidelity at (800) 354-3412.

Changing Your Special Election 401(k) Contribution

To manage your special election contributions, log into Fidelity NetBenefits. Navigate to your 401(k) contributions. Click on Contribution Amount.

When is the last day to change my Direct Deposit for the Retro Pay Deposit?

Direct deposit changes will be captured on November 3rd, 2024, at 1600ET as a one-time pull to capture account deposit elections. Please make sure you’ve made any direct deposit changes for your Retro Pay deposit before November 3rd, 2024, at 1600 ET.

In Solidarity,

Contract Implementation Committee (CIC)
Contact the CIC here