To: All US Airways Pilots
From: Dave Siegel
Date: January 16, 2003
I want to update you on the pension issue as I know how important this is to you and your families.
The U.S. Bankruptcy Court in Alexandria, VA is conducting a hearing today on the Company’s disclosure statement and plan of reorganization. (The hearing may extend into Friday, depending on the handling of a lengthy agenda.) During these proceedings, the Company’s amended disclosure statement will address the subject of the pilot pension plan. As required to complete our successful reorganization, we will lay out a dual path: we are actively pursuing legislative relief that would implement a restoration funding plan, or if unsuccessful in that effort, we will be forced to file a distress termination of the existing plan.
Should a termination occur, I urge you to carefully remember the following key points, which are part of our revised restructuring agreement reached with ALPA in December:
· Terminating the existing pilot pension plan will not mean that you will be left without a pension benefit. By working with ALPA, the existing plan will be replaced with a new plan so that upon retirement, pilots would receive benefits from two plans that when combined will represent your retirement income.
· Any follow-on pension plan will have the same funding levels by the Company that would have been made if a restoration funding program was allowed. There will be no financial windfall for the Company under this plan.
The replacement plan will be crafted to recognize the sacrifices already made by our pilots as well as the demographics of our pilot workforce, which we know is senior and made up of many pilots that are age 45 and above and clearly focused on retirement.
The Company is continuing to devote the very best financial, legal and political resources to this matter. One way or another we must resolve this issue prior to the plan of reorganization being mailed out for a vote by our creditors in late January. In order to draw the final $200 million of our debtor-in-possession financing, we must also secure ATSB approval of our revised business plan, which must include a solution to the pension issue. The ATSB will not act until this matter is resolved.
I know this is a deeply personal issue for you. Our preferred path is to achieve a legislative solution. However, no matter what the outcome, we will have viable options that provide for your retirement income. You will have a pension and no one should believe otherwise. Likewise, do not assume your final pension benefit will be reduced to the PBGC maximum of approximately $28,000 per year because with a replacement pension plan, that will not occur. The only way your pension benefit would be reduced to the PBGC level is if the Company was to liquidate -- and I have no intention of letting that happen.
From: Dave Siegel
Date: January 16, 2003
I want to update you on the pension issue as I know how important this is to you and your families.
The U.S. Bankruptcy Court in Alexandria, VA is conducting a hearing today on the Company’s disclosure statement and plan of reorganization. (The hearing may extend into Friday, depending on the handling of a lengthy agenda.) During these proceedings, the Company’s amended disclosure statement will address the subject of the pilot pension plan. As required to complete our successful reorganization, we will lay out a dual path: we are actively pursuing legislative relief that would implement a restoration funding plan, or if unsuccessful in that effort, we will be forced to file a distress termination of the existing plan.
Should a termination occur, I urge you to carefully remember the following key points, which are part of our revised restructuring agreement reached with ALPA in December:
· Terminating the existing pilot pension plan will not mean that you will be left without a pension benefit. By working with ALPA, the existing plan will be replaced with a new plan so that upon retirement, pilots would receive benefits from two plans that when combined will represent your retirement income.
· Any follow-on pension plan will have the same funding levels by the Company that would have been made if a restoration funding program was allowed. There will be no financial windfall for the Company under this plan.
The replacement plan will be crafted to recognize the sacrifices already made by our pilots as well as the demographics of our pilot workforce, which we know is senior and made up of many pilots that are age 45 and above and clearly focused on retirement.
The Company is continuing to devote the very best financial, legal and political resources to this matter. One way or another we must resolve this issue prior to the plan of reorganization being mailed out for a vote by our creditors in late January. In order to draw the final $200 million of our debtor-in-possession financing, we must also secure ATSB approval of our revised business plan, which must include a solution to the pension issue. The ATSB will not act until this matter is resolved.
I know this is a deeply personal issue for you. Our preferred path is to achieve a legislative solution. However, no matter what the outcome, we will have viable options that provide for your retirement income. You will have a pension and no one should believe otherwise. Likewise, do not assume your final pension benefit will be reduced to the PBGC maximum of approximately $28,000 per year because with a replacement pension plan, that will not occur. The only way your pension benefit would be reduced to the PBGC level is if the Company was to liquidate -- and I have no intention of letting that happen.