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) --

American International Group

(AIG) - Get Free Report

is being forced to reduce $198 million in scheduled retention payments.

Kenneth Feinberg, the Obama administrations pay czar, said these payments should be reduced, but did not indicate an appropriate amount, according to several reports.

A backlash ensued earlier this year after it was reported that AIG planned to pay bonuses of $165 million, even after receiving the bailout funding.

The flailing insurer is currently in the process of trying to repay a massive $85 billion loan from the government by selling off assets.

Earlier today

AIG announced that it finally unloaded its Taiwan unit


Primus Financial

for $2.15 billion.

-- Reported by Jeanine Poggi in New York

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