Pension Benefit Guaranty Corporation 

1200 K Street, N.W.. Washington. D.C. 200054026 

1 APR 0 5 2C05 

Re: Appeal No. Trans World Airlines, Inc. 

(TWA) Retirement Plan for Pilots (the Plan) 

The Appeals Board reviewed your appeal of PBGC's July 1, 2002 

determination of your PBGC benefit. For the reasons stated below, 

we must deny your appeal. 

Determinatfon and Appeal 

PBGC determined that you are entitled to a PBGC benefit of 

$724.45 per month payable as a Modified Cash Refund Life Annuity 

(MCRLA) .' PBGC noted that that was the same amount you were 

receiving when the Plan terminated. 

Your August 5, 2002 form-letter appeal said that (1) PBGC did 

not provide you with sufficient information on the analysis that 

underlies the determination, and (2) without such information, it 

is difficult for you to know whether errors not apparent to you 

were made. Our Discussion below addresses those issues, and the 

other issues you raised. 

1. Request for Additional Information 

Because your appeal requested more information about your 

benefit calculation, the Appeals Board sent your request to PBGC's 

Disclosure Officer and informed you in a letter dated August 14, 

2002 that you had the option of supplementing your appeal within 30 

days after his response. PBGC records show that the Disclosure 

Officer responded to your request on August 14, 2002 with copies of 

the documents in your personal PBGC file. One of those documents 

shows how your Plan-defined benefit was calculated. See 

Enclosure 1. The Appeals Board has not received any supplemental 

correspondence from you. 

Your MCRLA provides a benefit for the rest of your life. ~lso, because the 

Plan's former sponsor made special contributions on your behalf, your beneficiary 

will receive a benefit if you die before you receive pension payments equal to 

the special contributions balance. 
2. The Issue Pending with the IRS 

The Air Line Pilots Association (ALPA) specifically raised the 

issue of whether the freeze amendment violated the anti-cutback 

rule in the context of negotiation of the 1993 Comprehensive 

Settlement Agreement (CSA). (See ?ZncPosure 2 for an explanation of 

the benefits payable under the Plan before and after the 1993 

benefit freeze.) In accordance with the CSA, Pichin requested a 

determination letter from the Brooklyn District Director (BDD) on 

March 30, 1993. The BDD forwarded the request to the National 

Office, which issued a Tax Advice Memorandum (TAM) on September 9, 

1994, finding that the Plan did not, by its terms, violate the 

anti-cutback rule in section 411(d) (6) of the Internal Revenue Code 

(IRC). Thus, under the terms of the CSA, TWA was authorized, if 

not required under ERISA, to administer the Plan in accordance with 

the January 8, 1993 amendments. 

OnlApril 22, 1999, ALPA requested reconsideration of the 1994 

TAM. We understand that the request was forwarded to the National 

Office, but after learning that the Plan had been terminated, the 

National Office halted its actions concerning the request. 

3. Calculation of Your Plan-Defined Benefit and Your PBGC Benefit 

After the Plan terminated on January 1, 2001, PBGC personnel 

conducted an audit of the procedures TWA used in administering the 

Plan and calculating participants' Plan-defined benefits. After 

calculating benefits for a sampling of participants and comparing 

the results with the amounts that TWA calculated and stored in 

TWA1s pension 'database, PBGC auditors concluded that the benefit 

amounts in TWA's database were reliable. So, in most cases and in 

your case in particular, PBGC accepted TWA's calculations, and then 

adjusted them to account for (1) pre-age-62 supplements, (2) early 

or late retirement, (3) annuity types selected by participants 

and/or their spouses, and (4) limitations on benefits set by 

Congress under the Employee Retirement Income Security Act of 1974, 

- as amended (ERISA) . 

Documents in PBGC files reveal that the Plan did not have 

sufficient assets when it terminated on January 1, 2001 to provide 

all benefits that PBGC guarantees under ERISA. Nevertheless, your 

Plan-defined vested benefit is fully guaranteed and payable to you. 

Thus, because you are receiving your full Plan-defined vested 

benefit, and because the Plan's final assets and ERISA 5 4022(c) 

amount were insufficient to cover Category 3 benefits (see 

Enclosure 3 for an explanation of ERISA's priority categories), 

PBGC's allocation of assets under ERISA S 4044, and PBGC's 

allocation of the ERISA 5 4022(c) amount did not increase amount of 
-3- 

your PBGC benefit. 

PBGC is not authorized to guarantee or pay benefits larger 

than those provided under the terms of a terminated Plan. 

PLEASE NOTB that PBGC will always, even after an appeal is 

closed, consider any new, specific evidence that you present 

showing that you may be entitled to a higher benefit. If you have 

or obtain any such evidence, PBGC will certainly review it. Please 

send any such information to PBGC's Insurance Operations 

Department, Attention: Trusteeship Processing Division #1, at 

P.O. BOX 19153, Washington D.C. 20036. If you need additional 

information from PBGC, please call the Customer Service Center at 

1-800-400-7242. 

3. Federal Litiqation 

Your form-letter appeal includes claims that are being 

litigated against PBGC and other parties in two federal courts. 

The plaintiffs in the court cases allege among other things that 

the Plan was improperly terminated under ERISA. The form letter 

says that you are raising these issues in order "to ensure that all 

my rights with respect to the issues in contention in those 

litigations are fully preserved." 

By way of background, Carl Icahn was the former controlling 

shareholder of. TWA. TWA filed a bankruptcy petition in 1992 in the 

Bankruptcy Division of United States District Court for the 

District of Delaware. One of the issues involved in the bankruptcy 

was the status of TWA's underfunded pension plans, and the extent 

of Carl Icahn's liability, if any, in the event the plans 

terminated. Among other things, Mr. Icahn conditioned his 

willingness to provide TWA with a $200 million loan (which was 

necessary for TWA to survive and emerge from bankruptcy) upon some 

provision that fixed the amount of liability that he might incur 

towards the pension plan. Throughout these proceedings, the 

interests of the retired and active pilots were represented by the 

Air Line Pilots Association (ALPA). 

On January 5, 1993, TWA, ALPA (and other unions that 

represented TWA employees), and PBGC signed a "Comprehensive 

Settlement Agreement" (CSA) under which: (1) Carl Icahn would loan 

TWA $200 million; (2) an Icahn-owned concern called Pichin took 

over sponsorship of the TWA Pension Plans, and agreed to become 

responsible for any minimum funding costs of the Plans that were 

not covered by a $300 million payment guaranteed by TWA; (3) it was 

agreed that the Plans would terminate if certain events occurred 

after 1993; and (4) if the Plans were thereafter terminated by 
*I 

1 I., PBGC, it was agreed that Icahn would pay PBGC $240 million dollars. 

21 The Bankruptcy Court approved the CSA, and it was later 

PI incorporated in a Plan of Reorganization approved by the Bankruptcy 11 

er Court. Neither ALPA nor any other party took an appeal from that 

decision, which became final and binding. 

:I 

The TWA Pension Plans were terminated in 2001. Even though 

ALPA was one of the parties that negotiated and signed the CSA, it 

filed a suit to stop the termination and void its own settlement 

agreement. Judge Ricardo Urbina of the United States District 

Court for the District of Columbia dismissed the case on March 29, 

2002. Also, the Allied Pilots Association has assumed 

representation of former TWA pilots, and it is now litigating the 

appeal of Judge Urbina's ruling1. Furthermore, on May 15, 2002, 

eight former TWA pilots filed another lawsuit challenging the 

termination, also in Washington, D.C. The judge postponed 

litigation in the second case until the appeal of the first case is 

decided. 

While your appeal briefly summarizes the claims in these 

cases, it does not identify any errors in PBGC's determination of 

your PBGC benefit based on either (1) your personal data, (2) the 

Plan's provisions, or (3) ERISA provisions, given the Plan's actual 

status as a terminated, PBGC-trusteed plan. Please note that the 

Appeals Board does not have the authority to decide whether the 

Plan's termination was proper, or to change the termination date. 

In any event, the Board declines to decide the claims that are in 

litigation. 

Decision 

Having applied the law and PBGCts rules to the facts in this 

case, the Appeals Board decided that we must deny your appeal. 

This decision is the agency's final action regarding your 

September 19, 2002 appeal. You may, if you wish, seek court review 

of this decision. . 

Sincerely, 

Michel Louis 

Appeals Board Member 

Enclosures (3) 

1 A copy of Judge Urbina's decision (http://wwv.dcd.uscourts.gov/00-3113.pdf) 

is available on the court's website (http://ww.dcd.uscourts.govl).