PBGC Pension Benefit Guaranty 

us GOMRN~AMN~~ 1200 K Street, N.W., Washington, D.C. 

Corporation 

20005-4026 

October 15, 2004 

Re: Case Number 130705 

Eastern Airlines, Inc. Fixed Benefit Retirement 

Income Plan for Pilots (the "Plan") 

Dear 71 

The Appeals Board has reviewed your appeal of PBGC's 

September 30, 1998 revised determination of your benefit. As 

explained below: 

i) PBGC has decided not to reduce the $1,076.75 monthly 

benefit you currently receive. You will not be required to 

repay PBGC for past overpayments. 

ii) The Appeals Board decided PBGC is responsible for paying 

your full $1,076.75 benefit. PBGC will ensure you receive 

your $1,076.75 benefit, either directly from PBGC or combined 

with payments from Prudential. 

PBGC's 1998 Determination 

PBGC calculated your Plan benefit as $1,497 .O3 per month until 

reaching age 65, and $1,129.83 ($1,497.03 - $367.20) per month 

1 thereafter. However, Plan assets were insufficient to pay your 

full benefit. Further, PBGC determined your asset-provided PBGCpayable monthly benefit should not include $65.94 for a benefit 

Prudential would pay you directly. PBGC concluded your PBGC 

benefit is $1,185.93 per month until reaching age 65, and $872.19 

per month thereafter. 

Under a 1997 ALPA-PBGC Settlement Agreement, PBGC made you a 

larger Settlement Offer: 

PBGC would pay you $1,230.49 per month until reaching age 65, 

and $904.96 per month thereafter if you limit any appeal to 

only issues relating solely to your factual circumstances. 

Under the Settlement Offer, your PBGC overpayments totaled 

$20,201.48 through December 31, 1998 .' 

Eastern calculated $1,489.52 per month before age 65, and 

$1,122.32 ($1,489.52 - $367.20) per,month beginning at 65. 

($1,489.52 - $1,230.49) x 11 months, 11/1/1990 - 9/30/1991 

+ ($1,429.94 - $1,230.49) x 87 months, 10/1/91 - 12/31/1998 
Your Appeal 

In your October 27, 1998 and December 19, 1998 letters: 

You requested documentation on the highest 42 consecutivemonth earnings PBGC used. 

Eastern calculated your highest consecutive 42-month earnings 

total was $396,233.22 for July 1983 through December 1986. 

Please see Enclosure 1. PBGC increased your highest total to 

$398.230.75, for September 1983 through February 1987, to 

include back-pay awarded but not fully paid after Eastern's 

bankruptcy. See Enclosure 2. Thus, PBGC calculated your 

highest Average Annual Earnings as $113,780.21 ($398.230.75 + 

3.5 years). 

You asked for documentation on $8,681.50 PBGC used for your 

"Employee Contribution (Prudential) Balance" on the Plan's 

October 5, 1990 termination date. 

PBGC calculated $8,681.50 from $9,363.57 shown on a Prudential 

listing as your "employee contributions as of September 30, 

1991." Please see Enclosure 3. PBGC assumed $8,681.50 was 

the value of a benefit Prudential would pay you. Thus, PBGC 

converted the $8,681.50 value to an $65.94 per month annuity 

offset to your PBGC-payable benefit. 

As explained below, the Board determined Prudential is not 

paying the benefit PBGC assumed. Also, your contribution 

balance fell to $0 in 1995. 

Discussion 

Participants ' Contributions 

Plan benefit depend on Contributions, which are: i) 

contributions participants made before June 1, 1965, ii) "special 

employee contributions" Eastern made on participants' behalf from 

June 1, 1965 to February 28, 1986, and iii) credited interest. 

In exchange Eor a permanent benefit reduction, the Plan would 

have allowed you to withdraw your contributions before you retired. 

After retiring March 1, 1990, you could no longer withdraw your 

contributions. However, you were still guaranteed monthly benefits 

totaling your March 1, 1990 contribution balance. Plan records 

show your contributions and interest totaled $87,704.40 as of 

December 31, 1988. 

PBGC calculated your contribution balance: 

was approximately the same $87,704.40 two months later when 

you retired March 1, 1990, 3 

The Plan froze interest on special contributions effective 

January 1, 1989. Thus, PBGC's approximation understated interest 
was $75,788.24 ($87,704.4 - $1,489.52 benefit x 8 months) on 

the Plan's October 5, 1990 termination date, and 

could be divided into $8,681.50 for your Prudential benefit 

plus $67,106.74 ($75,788.24 - $8,681.50) remaining special 

contributions on October 5, 1990. 

Plan benefits depleted your contribution balance to $0 in 1995, 

approximately 534 months after the Plan's termination. 

prudential Held Some Participants' Contributions 

Some contribution balances were held in a Plan contract with 

the Prudential. Also, Prudential has paid a contribution balance 

to at least one other participant who retired after the Plan's 1990 

termination date. 

PBGC Reduced for a $65.94 Benefit Prudential Is Not Paying 

PBGC's records show: 

Prudential paid all of your $1,489.52 benefit until PBGC took 

control of Plan assets shortly after the Plan's termination 

date, 

Prudential provided a death benefit for you ending in 1995, 

and 

Prudential has neither provided you any other benefit, nor 

acknowledged any obligation to pay you any other benefit. 

The Appeals Board concluded PBGC mistakenly reduced your PBGC 

benefit $65.94 per month for a benefit Prudential is not paying. 

PBGC Will Not Reduce Your Current $1,076.75 Benefit 

Restoring the $65.94 Prudential offset PBGC used to your 

Settlement Offer benefits produces less than PBGC has been paying 

you. Also, your appeal does not reject PBGC's Settlement Offer 

because you presented factual circumstances relating specifically 

to you. Given your facts and circumstances, PBGC has decided not 

to reduce your current $1,076.75 per month PBGC benefit. 

Decision 

PBGC has decided not to reduce the $1,076.75 benefit you 

currently receive. You will not be required to repay PBGC for past 

overpayments. PBGC will ensure you receive your $1,076.75 benefit, 

2 months only on your own contributions. However, your own 

contributions, made before June 1, 1965, comprise a small part of 

your total contributions through February 1986. Thus, PBGC's 

approximation method does not significantly affect the fact that 

your contribution balance fell to $0 in 1995. 

$75,788.24 + $1,429.94 per month 
either directly from PBGC or combined with payments from 

Prudential. 

This letter concludes your administrative remedies with 

respect to PBGC's September 30, 1998 determination. We appreciate 

your patience during our careful review of your appeal. 

Sincerely, 

William D. Ellis 

Appeals Board Member 

Enclosures : 

1) Eastern worksheet showing your monthly earnings March 1979 

through December 31, 1988 freeze 

2) Appeals Board worksheet: i) adjusting your monthly earnings 

for a back-pay award, and ii) calculating your $398,230.75 

highest total consecutive 42 months earnings (2 pages) 

3) Prudential record showing $9,363.57 as your employee 

contribution balance as of September 30, 1991