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Dear Members,
COMPANY PROFIT SHARING FAQ
The Company has issued the following Profit
Sharing FAQ. Profit sharing checks will be issued on March 14, 2007 under
the normal check delivery system (US Mail or direct deposit). The example in
the Company FAQ uses passenger service employees. I have included an example for
the Flight Attendant group using the Flight Attendant percentage of the profit
sharing pool at the end of the FAQ.
Profit Sharing Distribution
FAQs
Eligibility
Q. Which groups participate
in the US Airways
profit sharing plan?
A. The US Airways profit share
plan includes most mainline represented employees, former represented MDA
employees, East administrative employees, and West non-contract employees at
grades 22 and below.
Canadian employees,
International employees and wholly owned Express employees who had concessions
participate in separate profit sharing programs. Details for Express employees
will be sent separately. Non-union employees in positions at grade 23 and above
(pre-merger AWA) and in positions covered by the pre-merger US Airways
Management Salary Plan are eligible to participate in the management Annual Cash
Incentive Program.
Q. What are the eligibility
rules?
A. To be eligible (except
pilots) you must have been “active” on Dec. 31, 2006, and have operating company
W-2 compensation during 2006. Any employee who terminated prior to that date is
not eligible, but an employee on an unpaid leave on that date is considered
“actively employed” and is eligible to participate based on any operating
company W-2 compensation they received during the plan year. Any employee who
was “active” on Dec. 31, 2006, but who has subsequently terminated from the
company is eligible.
Q. Are employees who were on
Worker’s Compensation during 2006 eligible?
A. Yes, providing they meet the
definition of “active” employee and had operating company W-2 compensation
during the year. Worker’s Comp benefits do not count as operating company W-2
compensation.
Q. Are employees on a leave
of absence when profit sharing plan distributions are made eligible?
A. Yes, providing they had
operating company W-2 compensation during 2006.
Q. Are employees who retired or furloughed eligible?
A. Unions had the opportunity
to decide whether to include employees who were furloughed or who retired and
had W-2 operating company income during the plan year. For unions that included
retirees and/or furloughees, keep in mind there are some cases where the
employee furloughed or retired during 2005, but had some operating company
compensation in 2006. In those cases, the compensation was included because the
employee retired or furloughed and had operating company compensation in the
plan year of 2006.Q. Is an employee who retired directly from Early Out or Voluntary
Separation eligible?
A. Employees who retired (and
whose union included retirees) directly from Early Out or Voluntary Separation
and had operating company W-2 compensation during 2006 are eligible. Employees
whose Early Out or Voluntary Separation was a termination from the company are
not eligible because they were not active on Dec. 31, 2006.
Q. Are West represented
employees included in the US Airways profit share?
A. Each union decided on the
inclusion of West employees. Unions representing pilots, flight attendants and
customer service elected to include West employees for the full year. The IAM
elected to include West employees on a pro-rated basis back to the first day of
the first pay period following date of certification. TWU did not include TWU
West represented employees in the current plan year.
Q. What are the union
pro-ration dates for IAM represented groups?
A. IAM represented West
employees will be prorated on eligible W-2 compensation from the first day of
the first pay period following date of union certification. The pro-rate dates
are as follows.
Fleet
Service May 20, 2006
Maintenance &
Related Aug. 19, 2006
Stock
Clerks Sept. 23, 2006
Maintenance Training
Instructors April 22, 2006
Group Allocations & Individual Shares
Q.
How is the profit sharing pool allocated between
groups?
A. Under the collective
bargaining agreements, each union’s share of the profit sharing pool is based on
that union’s share of total labor cost savings achieved under the
“Transformation Plan.” These shares are calculated for each employee group
separately as follows:
|
Workgroup |
Allocation |
Pool
Amount |
Total EligibleW-2 Earnings for Group |
Includes Furloughed |
Includes Retired |
Include West |
|
ALPA – Pilots |
36.00% |
$21,130,436 |
N/A |
Eligible months only |
Eligible months only |
Yes |
|
IAM – Maintenance &
Related |
23.43% |
$13,751,139 |
$142,717,215 |
Yes |
Yes |
Pro-rate based on IAM
certification date |
|
AFA – Flight
Attendants |
14.50% |
$8,510,870 |
$247,121,285 |
Yes |
Yes |
Yes |
|
CWA – Passenger
Service/Reservation |
13.14% |
$7,713,657 |
$171,752,275 |
Yes |
Yes |
Yes |
|
IAM – Fleet Service |
9.18% |
$5,386,541 |
$162,762,028 |
Yes |
Yes |
Pro-rate based on IAM
certification date |
|
Non-contract
Administrative |
2.70% |
$1,584,783 |
$29,358,977 |
Yes |
Yes |
Yes |
|
TWU – Dispatch |
0.65% |
$381,522 |
$9,793,411 |
Yes |
Yes |
No |
|
TWU – Flight Crew
Training Instructors |
0.26% |
$152,609 |
$3,639,499 |
No |
No |
No |
|
TWU – Flight
Simulator Engineers |
0.08% |
$46,957 |
$1,506,586 |
Yes |
Yes |
No |
|
IAM – Maintenance
Training Specialists |
0.07% |
$41,487 |
$2,043,966 |
Yes |
Yes |
Pro-rate based on IAM
certification date |
|
Total Payout |
100% |
$58,699,999 |
|
|
|
|
Q. What is excluded from any employees operating company W-2
"compensation"?
A. Items such as reimbursement
for moving, imputed income, unemployment insurance benefits and workers
compensation are not considered as operating company compensation and are
excluded from the individual calculations. Note: These amounts may show on the
employee's W-2, but are not defined as compensation.
Q. How will the individual’s
share of the profit pool be determined?
A. An individual’s profit
sharing payment will be in the same proportion to the group’s profit sharing
pool as that individual’s earnings are to the group‘s total earnings. In other
words, if an employee’s earnings are 0.11 percent of the group’s total earnings,
his/her profit sharing payment will be 0.11 percent of the group’s profit
sharing pool. The calculation would be:
Individual earnings
X group profit sharing pool = individual payment Total Group Earnings
For the passenger service workgroup, the calculation looks
like this:
$28,400
x $7,713,657 = $1275.49 $171,752,275
Profit sharing for individual
pilots is not W-2 based but is instead based on a formula determined by ALPA MEC
resolution, which outlined criteria for determining eligible months of profit
sharing for each pilot. The total number of eligible months for all pilots was
divided by the total profit sharing dollar amount in order to assign a value to
each eligible month. That value was then multiplied by the total number of
eligible months for each pilot to determine their share of the profits for
2006. Profit sharing for Canadian
employees is calculated by determining eligible months of profit sharing for
each employee under a separate plan and pool. The total number of eligible
months for all Canadian employees was divided by the total profit sharing dollar
amount in order to assign a value to each eligible month. An individual
employee’s profit share is then calculated by multiplying their number of
eligible months times the assigned monthly value. Part-time employees receive
credit for eligible months at 50% of the full-time rate.
International agents, which
include employees in Bermuda, are covered by a separate profit sharing program and
pool and based on the average profit sharing percentage for domestic
administrative positions. This percentage was applied to each international
agent’s annual base rate at the end of 2006, prorated for the number of months
spent in an eligible position. This method was also used to determine the
profit sharing awards for international administrative employees. As with the
other groups, employees had to be active on Dec. 31, 2006, to participate
unless otherwise mandated by a specific country’s law.
Contributions/Deductions
Q. Are employee
contributions to a 401(k) or Section 125 plan contributions included as
operating company W-2 compensation?
A. Yes. These are “elective deferrals” and are considered
part of the employee’s operating company W-2 compensation.
Q. Will 401(k) deductions be made from the profit sharing payout?
A. Yes. Normal 401(k)
deductions will be made.Q. Will the company make applicable contributions to company Defined
Contribution pension plans (“DC”) or employee’s 401k match plans?
A. Yes. Normal employee
deferrals, company contributions and company match will be eligible to be
deducted/calculated against your profit sharing. The payroll deferral election
on file with payroll at the time the profit sharing check is processed will be
the percentage that is deducted from your check for your applicable savings
plan.
Q. What about credit union
deductions such as loan payments, will they apply?
A. No. Credit union deductions
for loan payments will not be applied to the profit share payment.
Q. Are distributions from
the profit sharing plan taxable?
A. Yes. Any payout from the
plan is treated as taxable income and subject to payroll and income tax.
Domestic employees will be taxed at the federal supplemental earnings rate of
25%. Normal FICA, state, local, state disability, and unemployment withholding
rates will also apply. For international employees normal deductions applicable
to each country will apply.
Payout Specifics
Q. How will employees be
treated who are in management for part of the year and represented for part of
the year, or who are in two different represented groups for part of the year?
A. Employees will be pro-rated
for proportional service in each and in certain cases may receive separate
checks.
Q. I understand that some
employees who had eligible compensation for only a small portion of the year may
receive very small checks. Is this true and does the company have any plan to
remedy this?
A. The company has decided that
it will make a minimum payment of $50 (pre tax and other deductions) to any
eligible employee who had operating company W-2 compensation during the plan
year. Any additional amount up to the $50 minimum will come from company funds
and not from the profit sharing pool.
Q. When will profit share be
paid out?
A. Profit share checks will be
dated March 14 and will be distributed through the normal pay check distribution
process, including direct deposit. Profit sharing checks may be cashed as soon
as received.
FLIGHT ATTENDANT EXAMPLE: (assumes earnings amount of $40,000.00)
Individual earnings
X group profit sharing pool = individual payment Total Group Earnings
$40,000.00 x
8,510,870.00 = $1376.00
$247,125,285.00
Thank you,
Mike Flores, President
The US Airways MEC
AFA-CWA
~~~~~~~~~~~~~~~~~
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AFA Local Numbers
Council 40 PIT 724-695-3329
Council 41 DCA 703-212-8090
Council 69 BOS 781-289-8454
Council 70 PHL 215-492-0840
Council 82 LGA 315-736-3483
Council 89 CLT 704-527-0325
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US AIRWAYS Benefits Information 800-872-4780
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