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PBGC Pension Benefit Guaranty Corporation 

Protocting Americo'u Pensions 1200 K Street, N.W., Washington. D.C. 20005-4026 

August 13, 2010 

Re: Case 203572; Retirement Plan for Flight Attendants in 

the Service of US Airways, Inc. (the "FA Plan") 

Dear 

This Appeals Board decision responds to your appeal of PBGC's SeptemberD 

2008 determination that you are not entitled to a PBGC benefit under the FA Plan. As 

we explain below, the Appeals Board found that your appeal did not provide a sufficient 

basis for changing PBGC's determination and, therefore, we must deny your appeal. 

PBGC's Benefit Detennination and Your Appeal 

PBGC's determination letter told you that you are not entitled to a PBGC benefit 

because the FA Plan required at least 5 years of Service to qualify for a vested pension 

bel')efit and you did not meet this requirement. The letter said that you had only 3.58 

years of Service as of the Plan's termination date (January 10, 2005). PBGC counted 

your years of Service from your date of hire ~ 11999) until the date of your 

departure for military leave (I 12003). 

After you requested and were granted an appeal filing extension, you filed an 

appeal on December 23, 2008. Your December 23 appeal letter said: 

This responds to your September 5, 2008 determination and much-appreciated 

extension that I am not entitled to a pension benefit payable by PBGC. The US 

Airways Plan [required] that I have 5 years of service in order to qualify for a 

vested pension benefit During the furlough/lay-off procedures in 2003, I was 

serving with the I lin Baghdad, Iraq since February 

2003, while simultaneously an active employee with US Airways based in 

I ltnternational Airport. 

Due to no fault of my own, my military orders and contract were extended (StopLoss) until I was formally and honorably discharged from the US Army Reserve 

on May D2004. At which time, I have 90 days after completion of 181 + days to 

report back to work. (Uniformed Services Employment & Reemployment Rights 

Act USERRA). 

Please find my military ,acllilatiQn and discharge orders encl~sed, w~ile I was an 

US Airways employee L______j I have computed my US A1rways t1me unt1l my 
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military release (plus days to report) to qualify me for the vested pension benefit 

with over 5 years of service. 

In support of your appeal, you provided the following documents: 

• A letter from the Department of the Army dated February D 2003, 

notifying you that you were ordered to report for "Active Duty" on February[] 2003. 

The letter also noted that the period of your active duty was scheduled for 365 days. 

• A letter from the Department of the Army stating that, as of May D2004, 

you were honorably discharged. The letter also noted under additional instructions: 

"Soldier was held beyond normal discharge date through no fault of the soldier." 

Pertinent Plan Provisions 

The provisions of the January 1, 2001 Restatement of the FA Plan, as amended 

(the "2001 Restatement"), were in effect when the FA Plan terminated. 

Section 2.1 (W) of the 2001 Restatement, as amended by the First Amendment 

effective October 16, 2001, defines "Service" for vesting purposes as follows: 

(W) Service - employment with the Employer determined in 

accordance with the following rules for the purposes of determining an 

employee's vesting status: 

(1) An employee will be credited with Service in full 

1/12th of a year commencing on his most recent Employment Date and 

ending on his subsequent Severance Date. 

(4) A Severance Date shall not occur and absence 

from employment shall be counted as Service if the following 

circumstances apply: 

(a) furlough; 

(b) medical leave of up to three years as 

authorized by the Employer's established leave policy; 

(c) personal leave of absence of up to 180 

days as authorized b the Employer pursuant to the Employer's 

established leave policy; 

(d) military leave while the employee's 

reemployment rights are protected by law; 

provided that the employee returns to active employment with 

the Employer when recalled (if furlough, except those Employees 

who elect a voluntary furlough under a voluntary program offered 

by the Employer and elect to retire upon their Normal Retirement 

date while on voluntary furlough status), within 180 days (if 

personal leave of absence), or within 90 days after he becomes 
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eligible for release from active duty (if military leave). If the 

Employee does not return to active employment with the 

employer, except for medical leave of absence, his Severance 

Date shall be deemed to have occurred and his Service shall be 

deemed to have ceased on the date his absence commenced. 

Section 2.1 (Z) of the 2001 Restatement explains that a Participant needs at least 

five years of Service to qualify for a vested benefit, as follows: 

(Z) Vesting Percentage - the percentage which may be 

applied to a Participant's Accrued Benefit in accordance with the further terms of 

the Plan. A Participant with less than five years of Service has a Vesting 

Percentage of 0%. A Participant with five years of Service, has a Vesting 

Percentage of 100%. · 

Section 3.4 of the 2001 Restatement mentions "military service" as follows: 

3.4 Military Service. Notwithstanding any other provision of the 

Plan to the contrary, contributions, benefits and service credit with respect to 

qualified military service shall be provided in accordance with Section 414(u) of 

the [Internal Revenue] Code, 

Section 414(u) of the Internal Revenue Code, mentioned in section 3.4 of the 

2001 Restatement, requires qualified defined-benefit plans to abide by the provisions of 

the Uniformed Services Employment and Reemployment Rights Act of 1994 

("USERRA"). 

USERRA 's Provisions 

Congress enacted USERRA on October 13, 1994 to amend the provisions of 

Chapter 43 of Title 38 of the United States Code ("USC") to protect the rights of persons · 

who voluntarily or involuntarily leave civilian employment to undertake military service. 

With respect to the rights, benefits and obligations of persons absent from 

employment for service in a uniformed service, USERRA §§ 4316(a) & (b) provide as 

follows: 

(a) A person who is reemployed under this chapter [38 USC §§ 4301 et 

seq.] is entitled to the seniority and other rights and benefits determined by 

seniority that the person had on the date of the commencement of service in the 

uniformed services plus the additional seniority and rights and benefits that such 

person would have attained if the person had remained continuously employed. 

(b) 

(6) The entitlement of a person to a right or benefit under an 

employee pension benefit plan is provided for under section 4318 [38 USC 

§ 4318]. 

[Underlining added.] 
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With respect to pension benefits, USERRA § 4318(a) provides as follows: 

(a) (1) (A) ... in the case of a right provided pursuant to an employee 

pension benefit plan (including those described in sections 3(2) and 3(33) of the 

Employee Retirement Income Security Act of 197 4 [29 USC§ 1 002(2), (33)]) . ·.. , 

the right to pension benefits of a person reemployed under this chapter [38 USC 

§§ 4301 et seq.] shall be determined under this section. 

(2) (A) A person reemployed under this chapter [38 USC §§ 

. 4301 et seq.] shall be treated as not having incurred a break in service with the 

employer or employers maintaining the plan by reason of such person's period or 

periods of service in the uniformed services. 

(B) Each period served by a person in the uniformed 

services shall, upon reemployment under this chapter [38 USC §§ 4301 et seq.], 

be deemed to constitute service with the employer or employers maintaining the 

plan for the purpose of determining the nonforfeitability of the person's accrued 

benefits and for the purpose of determining the accrual of benefits under the 

plan. · 

[Underlining added.] 

USERRA authorizes the Secretary of Labor to prescribe rules to implement the 

act. The Department of Labor ("DOL") regulations relating to the USERRA 

requirements are found in 20 Code of Federal Regulations ("C.F.R.") Part 1002. With 

respect to persons who are laid off while they are on military leave, 20 C.F.R. § 1002.42 

provides, in pertinent part, as follows: 

§ 1002.42 What rights does an employee have under USERRA if 

he or she is on layoff, on strike, or on a leave of absence? 

(a) If an employee is laid off with recall rights, on strike, or on a 

leave of absence, he or she is an employee for purposes of USERRA If the 

employee is on layoff and begins service in the uniformed services, or is laid off 

while performing service, he or she may be entitled to reemployment on return if 

the employer would have recalled the employee to employment during the period 

of service. Similar principles apply if the employee is on strike or on a leave of 

absence from work when he or she begins a period of service in the uniformed 

services. 

(b) If the employee is sent a recall notice during a period of service 

in the uniformed services and cannot resume the position of employment 

because of the service, he or she still remains an employee for purposes of the 

Act. Therefore, if the employee is otherwise eligible, he or she is entitled to 

reemployment following the conclusion of the period of service even if he or she 

did not respond to the recall notice. 

r 

(c) If the employee is laid off before or during service in the 

uniformed services, and the employer would not have recalled him or her during 

that period of service, the employee is not entitled to reemployment following the 

period of service simply because he or she is a covered employee. 

Reemployment rights under USERRA cannot put the employee in a better 

position than if he or she had remained in the civilian employment position. 
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Discussion 

PBGC provides pension insurance in accordance with the Employee Retirement 

Income Security Act of 1974, as amended ("ERISA"). If the sponsor of a qualified, 

defined-benefit pension plan can no longer support its plan, PBGC becomes the plan's 

trustee and pays benefits as defined In the plan, subject to the limitations and 

requirements set by Congress under ERISA. 

Records available to the Appeals Board show that the Plan terminated on 

January 10, 2005 and PBGC became the Plan's trustee on February 1, 2005. 

PBGC's records also indicate that: (1) you were hired b US Airways on L__~~ 1999, as an (2) you became a on February[] 

2000; (3) you went on military leave on February 2003; (4) you were placed on 

involuntary furlough status on Junen 2003; (5) you were honorably discharged from 

active duty on May D 2004; and (5)You voluntarily terminated your employment with 

US Airways on May02006 after the FA Plan terminated. 

Based on section 1002.42 of the DOL's regulations, quoted above, we have 

concluded that you did not have a right to reemployment when you completed your 

active military service in 2005 because you were not recalled from your involuntary 

furlough before the end of your military service. We have, therefore, found that you are 

not entitled to Service under the FA Plan for any portion of your military service from 

February02003 to May D209,4 because you were not reemployed (that is, you did 

not return to active service with US Airways). 

Under PBGC's regulation (29 C.F.R. § 4022.11) regarding USERRA, if you had 

been recalled by US Airways before or after the Plan terminated and you returned to 

active employment upon recall, you would have been given credit for your period of 

military service up to the Plan's termination date. As the record shows that you were 

never recalled from furlough and, thus, you did not return to active service when 

recalled, you were never reemployed and cannot receive credit for your military service 

under USERRA. And, in accordance with section 2.1 (W)(4) of the FA Plan, you 

incurred a Severance Date and your Service (for vesting). ended on FebruaryD 2003, 

the first date of your military service. 

As of February D 2003, you had earned less than five years of Service and, 

therefore, you are not entitled to a vested benefit under the FA Plan. 

Decision 

Having applied the terms of the FA Plan and the law to the facts in this case, the 

Appeals Board found that your appeal did not provide a sufficient basis for changing 

PBGC's determination. Therefore, we must deny your appeal. This decision is PBGC's 

final action regarding your non-entitlement to a vested benefit under the FA Plan. If you 

wish, you may seek review of this decision in an appropriate federal district court. 
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We regret the delay in responding to your appeal and appreciate your patience 

while we completed our review. If you have other questions, you may call PBGC's 

Customer Contact Center ~t 1-800-400-7242 and ask to speak to the authorized 

representative assigned to the FA Plan (Case 203572). 

Sincerely, 

. ' 

Michel Louis 

Appeals Board Member