- Pension Plans Q&A
- Retirees With Questions Regarding
Pension Termination and PBGC
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AFA
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MEC is publishing the information below for informational purposes
only. Publishing this information on this Eline does not indicate that
the MEC is agreeing or disagreeing with the information contained
herein. (This information is taken directly from theHub)
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Pension Plans Q&A
Attention retirees and employees considering retirement: US Airways Human Resources department has created a question-answer document (below), to review details of the transition of the three defined benefit pension plans to the Pension Benefit Guaranty Corp. (PBGC).
The plans involved are those covering employees represented by the IAM and AFA and the retirement plan for certain employees that was frozen in the early 1990s.
On Jan. 6, the U.S. Bankruptcy Court approved a request by US Airways to terminate the three plans as part of its efforts to reduce costs and successfully emerge from bankruptcy. Within the next several weeks the PBGC will assume responsibility for these plans.
When the transition is completed, the PBGC’s pension insurance program will pay the defined benefit pensions to plan participants up to legal limits. The Q&A provides answers to the most commonly asked questions about this change.
The Q&A is also available on theHub. On the home page, click on "Pension Plan Q&A" under the "Benefits" icon. If you know of someone who is retired from US Airways, please pass this information on to them. Retirees have access to theHub, and instructions on how to log in for the first time are also on the home page under the "Check This Out" icon.
Pension Plan Q&A
Pension Plan Termination Q&A for Participants in the Following Defined Benefit
Plans:
- Pension Plan for Employees of US Airways, Inc. Who Are Represented by the IAMAW
- Retirement Plan for Flight Attendants in the Service of US Airways, Inc.
- Retirement Plan for Certain Employees of US Airways, Inc. (frozen in early 1990’s)
On January 6th, 2005, the bankruptcy judge approved a request by US Airways Group Inc. to terminate the above mentioned defined benefit plans. Within the next several weeks, the Pension Benefit Guaranty Corporation (PBGC) will assume responsibility for these plans.
To address the natural concern of our participants, the following information has been provided to answer some of the questions you may have regarding this decision:
1. Has the Pension Benefit Guaranty Corporation (PBGC) assumed responsibility for the above mentioned Plans?
We expect the PBGC to assume responsibility by the end of January 2005. When this transition is completed, the PBGC's pension insurance program will pay the defined benefit pensions to plan participants, up to the legal limits.
2. Can I call or write to the PBGC now?
Prior to the time that the PBGC takes control of the plans, they will not have assigned any personnel to answer your individual questions. However, after the PBGC assumes control of the plans, they will advise you of the procedures to follow. Therefore, you should not be contacting the PBGC with questions until you receive notification from either US Airways or the PBGC that it is appropriate to do so.
3. What does it mean that the PBGC will take control of the plans?
The PBGC will take control of the assets of each plan and will be responsible for their future investment. The PBGC will also be responsible for all aspects of the administration of the plans. Therefore, you will be required to send all claims for benefits to them. They will be responsible for responding to all of your issues regarding the payment of benefits and/or the amount of benefits. The PBGC will be responsible for issuing all benefit payments on a timely basis.
4. Who can I call at US Airways if I have any questions regarding these issues?
Please contact the US Airways Benefits Center at 800-872-4780 option 2.
5. How can I get more information about the PBGC?
You may access the PBGC website for further information. The address is www.pbgc.gov or call 1-800-400-7242. Please note that this is only for general information about the PBGC – you will not be able to obtain any information specific to US Airways.
6. If I am retired, will my pension benefits stop?
No. When a distressed company can no longer continue a single-employer plan, the Pension Benefit Guaranty Corporation ("PBGC") steps in and pays benefits based on the provisions of the plan, up to the limits set by law.
7. Will my pension benefits be reduced?
Based upon the limits set by law as to the amount that PBGC may pay, it is anticipated that most people will get all they would have received if the plans had not failed. But this is a difficult question to answer, as each person's benefits are somewhat different. Some benefits will be reduced, but most will not.
8. What will happen over the next few months?
The benefits of those actively drawing a pension may continue as before. However, final benefits payable from the PBGC could be reduced to reflect the PBGC Guaranteed Benefit as well as the phase in of recent plan improvements, if applicable.
- No additional benefits will be earned by participants in the first two plans above and no employees will become new participants.
- US Airways will assist the PBGC in the transfer of responsibilities to their personnel. It may take several months for the PBGC to take all of the records and assets and be responsible for all of the Plans’ operations.
- In anticipation of the PBGC taking over the plans and as required in this situation, US Airways will begin administering your pension consistent with the PBGC rules. For a small number of pension recipients, this will result in a reduction in your monthly pension benefit.
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Information for Future Retirees Who Have Questions Regarding Pension Termination and PBGC
Dear Members,
Since the Court terminated our Defined Pension Plans on January 6, 2005, there have been many inquires from future retirees of January 2, along with flight attendants who plan on retiring in the near future or further out beyond 2005. There are also many question asked regarding the "early retirement incentive"
(ERI) and all the formalities as it relates to deciding on a retirement date and possible rescinding of the retirement as it applies to the ERI and PBGC. Even though the company no longer has a liability to our pensions, and the assets have been turned over to the PBGC, the company still has to be notified of a flight attendant's intent to retire if you want to be part of the
ERI, and also for the purposes of vacation pay out, sick accrual, retirement medical, and term pass privileges.
The MEC is planning to attend a session with the PBGC in the near future which is being set up by AFA International Benefits Department.
In the meantime, Julie Tierney will be taking your calls on a temporary basis regarding retirement and retirement medical questions that is in our new ratified agreement up to the end of January. Her AFA number is 724-457-7770. She will research your questions and pass them through AFA International Benefits Department to make sure she is furnishing you the most up-to-date information to help you through the retirement process.
Your MEC Benefits Chair, Paul Frishkorn is in the process of developing a Q&A information sheet, so that you may have most of the common retirement questions answered that you seek. This project is targeted for completion by the end of February.
Teddy
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AFA Local Numbers
Council 40 PIT 724-695-3329
Council 41 DCA 703-690-6859
Council 69 BOS 781-289-8454
Council
70 PHL 215-492-0840
Council 82 LGA 315-736-3483
Council 89 CLT 704-527-0325
New Hotline Number Toll Free: 866-USA-AFA2
US AIRWAYS Benefits Information 800-872-4780
Reply to Inflight: askinflight@usairways.com
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