Contents: 

• VOLUNTARY SEPARATION PROGRAM 2002: Q & A's

VOLUNTARY SEPARATION PROGRAM 2002: Q & A's

Q1. What is the difference between this Voluntary Separation Package (VSIP) and those offered in 1997 and 2000? 

A1. This VSIP is an improvement over those offered in the past. The medical benefits have been improved by offering 120 days, rather than the 90 days previously offered. Additionally, the pass privileges have been improved. In both 1997 and 2000, flight attendants that completed 10 years, but less than 20 years of Company service, were offered 10 non-revenue; space available passes per year, for ten years. This enhanced Program offers the same flight attendant lifetime unlimited non-revenue space available passes. 

Q2. Are there any additional improvements over the previous Voluntary Separation Packages? 

A2. Yes. A flight attendants that has completed at least 20 years of Company service will receive unlimited passes for the employee and each eligible family member, for the life of the employee. Boarding priority will be an S4, which means that the employee and eligible family member will have the same boarding priority as an active employee and retiree. This is an enhancement over previous programs, in that we never before had unlimited, lifetime, S4 travel benefits offered to employees with under 25 completed years of service. 

Q3. Why is a minimum of five years of service with the company required to participate in the Voluntary Separation Program (Program)? 

A3. The Company and the Association determined that five years was a reasonable service period for eligibility under this program. In order to qualify, a flight attendant must have completed at least five years of company service by October 26, 2002. 

Q4.  Are employees currently on leave of absence, or Voluntary Furlough eligible for this program? 

A4. Yes. All active and inactive employees who are flight Attendants as of September 12, 2002, and who have Completed five (5) or more years of Company service as of October 26, 2002, (that is, original company hire dates of October 27, 1997 and after) are eligible. 

Q5. How many Flight Attendants will be eligible to take advantage of this program? 

A5. This program is limited to 723 eligible flight attendants. If more than 723 Flight Attendants apply, Flight Attendants will be selected based upon seniority using their competitive seniority bidding date. 

Q6. What is the earliest date I will be released under this program? 

A6.  No later than November 7, 2002, the Company will notify each applicant whether he/she has been accepted as a Participant in the Program.  Participants will be assigned a Voluntary Separation Date, which will be the date the employee's resignation becomes effective.  The Voluntary Separation Date will be determined by the Company based on the needs of the service, but in no case will it be later than December 31, 2002. 

Q7. I am a flight attendant that has recently completed 23 years with the Company. Would it be more beneficial for me to take the VSIP, or should I wait for the next Voluntary Furlough (VF2) to be offered? 

A7. There are several factors to consider. If you take the VSIP now, your pension credit will cease immediately upon your release.  If 723 flight attendants don't take the offer of VSIP, and VF2 becomes available to you at your seniority, you could sign on to the VF2 and continue to accrue seniority and pension credits. In your case, a 2-year VF2 would bring you to the completion of your 25 years. At the completion of 25 years, you would be qualified to receive the same passes as those being offered to 20-year flight attendants through this VSIP Program. If you were 55 years old at the completion of this VF2, with 25 years of completed Company seniority, you would also qualify for lifetime medical benefits. This is a personal choice that each of us must consider thoroughly. 

Q8. When is the deadline for applying for the Program? If I decide after submitting my Application and Release Form that I no longer want to participate in the Program, can I rescind my resignation? 

A8. Flight Attendants interested in participating in this Program should complete and return the Voluntary Separation Program 2002 Application and Release Form postmarked no later than October 26, 2002.  Faxes will not be accepted.  A flight attendant will have seven (7) days after executing the Application and Release Form to rescind. That means seven days after submitting the application. NOT seven days after the program deadline. 

Q9. Has the company considered offering longer continuation of medical and dental benefits? 

A9. No. The cost to provide continuous full medical and dental benefits as part of the Program is not an expense that the Company is willing to incur at this time. Past VSIP Programs offered only 90 days of benefits. This Program offers 120 days of benefits, as an improvement over past offers. For the first 120 days, you will be expected to make the same contribution that you make as an active employee. 

At the end of 120 days, you are eligible for continuation of coverage of your medical and dental plans (COBRA) by paying full insurance premium rates (employee and employer contributions). The Company is in the process of collecting information about the COBRA benefits, and we expect them to release that information shortly. 

Q10. If my eligible family members or I currently travel on a service-charge basis, will I be eligible to participate in the Program and receive the standard allotment of travel passes? 

A10. Yes. 

Q11. If my eligible family members do not use all of the standard allotment of travel passes for the year, can any unused passes be carried over for use in the following year? 

A11. No. 

Q12. What are the tax implications for using travel passes provided to me each year? What about my family members who travel on passes? 

A12. As determined by Internal Revenue Service regulations, you will be deemed to have received taxable income on the fair market value for each travel pass used. The current market value is currently considered to be 10% of the lowest US Airways “Y Fare” on the date of issuance. Also, each travel pass used by family members will be characterized as taxable income to you. There are no tax implications to your eligible family members for their use of travel passes. In January of each year you will receive a 1099 Form from the Company that will reflect the taxable income to you for passes used by you and your eligible family members in the prior year. You must report this taxable income to the I.R.S. on your individual tax return. 

Q13. If I leave now, before the early retirement age (age 55), how will this affect my retirement benefit? 

A13. If you have vested rights under one of the Company's pension plans, (5 years), including The Retirement Plan for Flight Attendants in the Service of US Airways, Inc., you may obtain a benefit when you reach the earliest retirement age under that particular plan. If you are a participant in the frozen pension plan, you are 100% vested in that benefit plan. 

If you are a flight attendant that participates in the US Airways, Inc. 401(k) Savings Plan, you will be notified of your distribution rights within 30 days of your effective separation date. Your participation in the 401(k) Savings Plan will end on your effective separation date. Therefore you will not be able to make employee contributions to your 401(k) account. Call the Fidelity Service Center for US Airways at 1-800-354-3412 for questions you may have concerning your 401(k) account. 

Q14. I still have questions about the Program. Who can I contact to get my questions answered? 

A14. If you have any additional questions about the Program, please call Inflight Administration at 1-800-327-0117, prompts 1,4,1,2.
 
 

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