Protecting 

PBGC America's Pensions Pension Benefit Guaranty Corporation 

1200 K Street, N.W., Washington, D.C. 20005-4026 

June 20, 2011 

Re: Appeal (PBGC Case No: 203332), Retirement Plan for Certain Employees of 

US Airways, Inc. (the "CE Plan" or the "Plan") 

Dear L_____ 

We are responding to your appeal of PBGC's July 9, 2010 determination advising you that, 

according to your Plan provisions, you cannot continue to work for US Airways and collect pension 

payments unless you have reached the normal retirement age. As explained below, we found no 

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

Background, PBGC's Benefit Determination and Your Appeal 

On February 14, 2005, PBGC sent you a letter providing information about PBGC and the CE 

Plan. The letter stated, in part, that you may not receive benefits from the CE Plan if you are still 

working for US Airways unless you have reached the normal retirement age under the Plan. On May 

11, 2005, you submitted a General Information Form stating you were currently employed by US 

Airways in Buffalo, New York. 

On November 19, 2008, PBGC sent you a letter with a benefit estimate. PBGC's letter explained 

that if you are currently employed by US Airways or its subsidiaries or if you are receiving Long 

Term Disability benefits, you may not receive pension benefits unless you have reached the normal 

retirement age under the Plan. 

On July 21, 2009, PBGC sent you a benefit determination letter stating that that you are entitled to 

a monthly benefit of$1,035.57, paid as a Straight Life Annuity with No Survivor Benefits based on a 

benefit start date of I I 2019 (age 65). The Benefit Statement, which accompanied the 

determination letter, states your earliest PBGC allowable retirement date is July 1, 2009, with a 

reduced benefit, and 2016 (age 62) with an unreduced benefit. You did not appeal the 

July 21, 2009 determination. 

On April 9, 2010, you and two of your colleagues wrote to PBGC stating that you believe the 

company that turned over your pension to the PBGC (US Airways, Inc.) no longer exists. Instead, 

you believe you work for a new company, "thus voiding the necessity to retire before receiving 

benefits." 
On May 5, 2010, PBGC sent a letter to you with a Participant Application for Pension Benefits 

and a Benefit Statement showing how your PBGC benefit was calculated. The letter reiterated that if 

you are currently employed by DS Airways or its subsidiaries or if you are receiving Long Term 

Disability benefits, you may not receive pension benefits from the Plan unless you have reached the 

normal retirement age under the Plan. 

On May 26, 2010, you wrote to PBGC asserting that US Afrways ceased to exist on 

January 17, 2005, the date the CE Plan terminated, and that US Airways' assets, including their 

name, was purchased and used by the buyer for recognition purposes. You further stated that some 

US Airways management employees who applied for and received benefits under the CE Plan after 

being terminated from employment were continuing to receive benefits after becoming re-employed 

by US Airways. You also note that PBGC' s benefit statement shows your date of termination from 

US Airways as 2005. You assert your retirement date is 2005 and that you 

currently work for a different company that purchased US Airways' name. 

On June 2, 2010, you submitted an application to start your benefit payments in May 2010. On 

the application, you again state you are currently employed by US Airways in Buffalo, New York. 

On June 4, 2010, PBGC sent a letter to you noting that your application shows you are still employed 

with U.S. Airways. 'PBGC's letter stated that according to Plan provisions you cannot work and 

collect pension benefits unless you have reached the normal retirement age. PBGC's letter further 

stated, "In order to process your request, please send us written confirmation, preferably from U.S. 

Airways with your date of termination of employment. If you cannot provide a document from U.S. 

Airways, then a signed and dated document from you stating your date of termination from U.S. 

Airways will be acceptable." 

On July 6, 2010 (postmark date), you submitted a letter asking PBGC to either accept or deny 

your application so that you could appeal PBGC's determination that your current employment at US 

Airways prevents you from receiving benefits under the CE Plan until you either terminate your 

employment or reach your normal retirement age. 

On July 9, 2010, PBGC sent a determination letter to you stating that you must terminate your 

employment with U.S. Airways or reach your normal retirement age before you can began receiving 

a PBGC benefit from the CE Plan. The July 9, 2010 letter advised you that if you wish to collect a 

benefit from PBGC before you have reached the Normal Retirement Age of 65 you must submit a 

letter of termination, preferably from U.S. Airways, with your date of termination of employment. 

With the letter, PBGC enclosed a brochure titled "Your Right to Appeal," explaining PBGC's appeal 

process. 

The Appeals Board accepted your July 6, 2010 letter as a timely filed appeal of PBGC's 

determination that you are not eligible to receive benefits under the CE Plan as long as you continue 

to work for U.S. Airways, Inc. 

On September 20 and 26, 2010, and on January 3 and 7, 2011, you submitted additional 

information and documents in support of your appeal. You believe you should be allowed to receive 

retirement benefits while employed by US Airways. You assert that: (1) the merger between US 

Airways Group, Inc. and America West Holdings Corporation was actually a purchase of US 

Airways by America West; (2) even if the transaction was a merger, it resulted in the creation of a 

new and different company in place of your pre-merger employer, US Airways Inc; and (3) the 

merger agreement states that America West Holding Corporation will be the survivor corporation. 

-2­

/ 
-. -·-·-·----··--..-------·----""-~--- ...... ~ -· ....... __,_, ______ -·---,--.. ~------.--·-·---.. --------------·-·---·~-----~--·--- ---------------- ---·---------· -­

Discussion 

PBGC is the United States government agency that insures pensions in accordance with Title IV 

of the Employee Retirement Income Security Act of 197 4, as amended ("ERISA"), 29 United States 

Code ("U.S.C.") 1301-1461. If a plan sponsor is unable to support its defined benefit pension plan, 

PBGC becomes the trustee of the plan and pays guaranteed pension benefits according to the plan 

provisions and as required by law, subject to legal limits set by Congress under ERISA. 

The CE Plan terminated on January 17, 2005, without sufficient assets to provide all benefits 

under the Plan. When PBGC becomes trustee of a terminated plan, PBGC collects participant 

information and copies of the plan's governing documents from the Plan's former administrator and 

audits that_ data. PBGC necessarily relies on the data it receives from a former plan administrator 

unless (1) PBGC's audit of that data shows that it is wrong; or (2) a participant supplies PBGC with 

documents showing that the data is wrong. 

The records PBGC's auditors obtained from US Aim;ays shof that you were born on 

your employment with US Airways, Inc. began 1978, and you were actively L_____~ 

employed with US Airways, Inc. when the CE Plan terminated on January 17, 2005. 

In a letter dated May 26, 2010, you note that your PBGC benefit .. estimate shows your date of 

termination of employment with US Airways, Inc. as January 02005, the date the CE Plan 

terminated. When a plan terminates, service accrual for pension purposes ceases at the earlier of the 

date of termination of employment and the date of Plan termination. In yoi.1r case, the earlier date is 

the date the CE Plan terminated. Unfortunately, PBGC does not always make this distinction clear in 

its correspondence to participants. PBGC clarified your date of termination by its entry on page 4 of 

your June 24, 2009 Benefit Statement showing your date of termination of employment as "Actively 

Employed at Date of Plan Termination." You have remained continuously employed with 

US Airways, Inc; 

CE Plan Provisions 

As noted above, when PBGC becomes the trustee of a plan, PBGC pays guaranteed pension 

benefits according to the plan provisions and as required by law. The Plan document that applies to · 

you is the Third Amendment to the Retirement Plan For Certain Employees of USAIR, Inc. as 

amended and restated effective January 1, 1994. Enclosure 1 is a copy of relevant Plan provisions. 

The possible retirement options under the CE Plan include Normal Retirement under Plan Section 

4; Early and Late Retirement under Plan Section 5; and Termination of Employment and Vested 

Retirement Income under Plan Section 6 .. To qualify for a Normal, Early or Late Retirement a 

participant must retire from the employ of the Emplo.yer. To qualify for a Termination of 

Employment and Vested Retirement Income benefit under Plan Section 6 a participant must have 

terminated employment with the Employer. 

Plan section 2.1 (M) of the Third Amendment to the CE Plan defines Employer as 

US Airways, Inc., a Delaware corporation, its corporate successors, and the surviving 

corporation resulting from any merger or consolidation of US Airways, Inc. with any 

other corporation, and any other member of the controlled group of corporations. 

-3­
which has adopted the Plan by appropriate written instrument executed pursuant to 

the authority of its board of directors. 

Thus, under the terms of the CE Plan, a participant is not eligible to receive a pension benefit prior 

to his normal retirement date if the participant is employed by US Airways, Inc., its corporate 

successors or a surviving corporation resulting from any merger or consolidation of US Airways, Inc. 

with any other corporation. A participant's normal retirement date under the Plan is the first of the 

month coincident with or next following the participant's 65 birthday. You have not yet attained age 

65. Thus, if the CE Plan had not terminated, you would not be eligible to begin receiving Plan 

benefits while employed by US Airways, Inc. 

The Merger of US Airways Group, Inc. with America West Holdings Corporation 


Did Not Result in a Change ofYour Employer 


You assert that following the merger of US Airways Group, Inc. and America West Holdings 

Corporation, your employer, US Airways, Inc. was a "new company." You further assert that as you 

work for a "new company" you should be eligible to receive benefits while still employed by US 

Airways, Inc. US Airways, Inc. underwent changes as a result of a Chapter 11 reorganization, As 

explained below, however, the Board finds that your employer, US Airways, Inc., did not become a 

new company (or a new Employer under the Plan) as a result of the merger of US Airways Group, 

Inc. and America West Holdings Corporation. Instead, your current employer, US Airways, Inc, is 

the same employer who employed you when your Plan terminated. 

For purposes of this decision, the entities involved in the merger transaction are defined as 

follows: 

• 	 US Airways Group, Inc.:. ("US Airways Group") the parent company of US Airways, Inc. 

• 	 US Airways, Inc.: ("US Airways") a certificated air carrier and US Airways Group's principal 

operating subsidiary. 

• 	 Barbell Acquisition Corporation: ("Barbell") a subsidiary holding group created by US 

Airways Group to effectuate a merger with America West Holdings Corporation. 

• 	 America West Holdings Corporation: ("America West Holdings") the parent company of 

America West Airlines, Inc. 

• 	 America West Airli~es, Inc: ("A WA") a certificated air carrier and America West Holdings 

Corporation's principal operating subsidiary. 

On September 12, 2004, US Airways Group and its domestic subsidiaries filed voluntary petitions 

for reorganization under Chapter 11 of the United States Bankruptcy Code. As part of the 

reorganization, US Airways Group reduced labor, pension and benefit costs and other operating 

expenses of US Airways. US Airways Group also entered into agreerp.ents with new equity investors 

for contributions totaling approximately $500 million to the reorganized US Airways Group and 

announced a planned merger between US Airways Group and America West Holdings. 

-4­
On May 19,2005, US Airways Group entered into an agreement and plan of merger with America 

West Holdings. 1 To accomplish the merger, US Airways Group created a wholly-owned subsidiary, 

Barbell Acquisition Corporation. US Airways Group then merged Barbell into America West 

Holdings by exchanging all ofthe shares ofBarbell (which were shares ofUS Airways Group) for all 

of the shares of America West Holdings. The stock of America West Holdings was then cancelled, 

and any holder of that stock before the transaction received a pro rata amount of US Airways Group 

stock. To complete the transaction, Barbell's corporate identity was extinguished and America West 

Holdings became a wholly-owned subsidiary of US Airways Group.2 The merger transaction cannot 

be characterized asan asset purchase by America West Holdings. Charts of the pre-merger and postmerger corporate structures are at Enclosure 3. 

US Airways, the company that employed you, was a wholly-owned subsidiary of US Air Group 

before and after the merger. Following the merger, US Airways continued to exist as a separate 

corporate entity and remained a certificated air carrier and subsidiary of US Airways Group. A W A 

was a wholly owned subsidiary of America West Holdings ·before and after the merger. US Airways 

and AW A both continued operating after the merger of their respective parent companies. You 

correctly note that the merger agreement filed with the SEC states that after Barbell Acquisition 

Corporation and America West Holdings merged, Barbell's corporate existens:e ceased and America 

West Holding will be the survivor' corporation. This fact does not impact the corporate identity of 

your employer, US Airways Inc. 

For a period of time after the merger, US Airways and A W A each operated as a certificated air 

carrier. On September 25, 2007, AWA surrendered its Federal Aviation Administration ("FAA") 

operating certificate and all mainline airline operations were subsequently conducted under 

US Airways' FAA operating certificate.3 A WA transferred substantially all of its assets and 

liabilities to US Airways. US Airways Group contributed 100% of its equity interest in America 

West Holdings to US Airways. As a result of the transfer, America West Holdings and AWA 

became wholly-owned subsidiaries of US Airways. You remained employed with US Airways 

throughout these transactions. The transactions did not result in your being employed by a different 

employer. 

In the supplemental material you submitted you assert the transaction between US Airways and 

America West should be characterized as an asset purchase. As already discussed, the Board 

disagrees with your assertion. As established by the SEC filings, including the Agreement and Plan 

of Merger, the transaction between US Airways Group and America West Holdings was a merger. 

America West Holdings was treated as the acquiring company in the merger for accounting purposes 

only. 4 The Board concludes that based on all of the evidence presented, you have remained 

employed with US Airways, Inc., the Employer as defined by the Plan. 

1 A copy of Articles I and II of the "Agreement and Plan of Merger among US Airways Group, Inc., America West 

Holdings Corporation and Barbell Acquisition Corp. Dated as of May 19, 2005" is at Enclosure 2. 

2 US Airways Group, Inc, American West Airlines, Inc and US Airways, Inc. Form 10-K for the fiscal year ended 

December 31, 2006. 

3 US Airways Group, Inc and US Airways, Inc. Form 1 0-K for the fiscal year ended December 31, 2007, relevant 

portions of which are at Enclosure 4. 

4 US Airways Group, Inc. Prospectus dated September 27, 2005. 

-5­
You are Not CurrentlyE!igiblefor PBGC Benefits Under the CE Plan 


While Maintaining Your Employment with US. Airways 


In your appeal you assert you are eligible for PBGC benefits under the CE Plan based upon 

PBGC's policy on working retirement. PBGC's policy "5.2-2 Working Retirement" distinguishes 

between Normal Retirement Benefits and Early Retirement Benefits. 5 Under Section 5.2-2 (C), 

"Eligibility for Normal Retirement Benefits," PBGC will pay normal retirement benefits to a 

participant who continues to work for the DoPT employer with benefits becoming payable beginning 

on or after the participant's normal retirement date as defined by plan provisions and in accordance 

with PBGC policy on annuity starting dates. In addition, PBGC will not suspend benefit payments to 

a retiree who is reemployed by the DoPT employer on or after his or her normal retirement date. 

Thus, under PBGC policy, you will become eligible for benefits on or after your norm<1l retirement 

date as defined by CE Plan provisions. 

As previously noted, under the CE Plan, a participant's normal retirement date is the first of the 

month coincident with or next following the participant's 65th birthday. You will reach age 65 on 

I 12019. You will, therefore, become eligible for Plan benefits under section 5.2 -2 (C) on or 

afterl 12019, even if you are still employed by US Airways. 

Under Section 5.2-2 (D), Eligibility for Early Retirement Benefits, PBGC will pay early 

retirement benefits to a participant only if the participant permanently leaves the employment of the 

DoPT employer before his or her annuity starting date, except as otherwise provided in policy 5.2-2 

Working Retirement.6 

PBGC's policy 5.2-2 Working Retirement provides that certain business transactions may affect 

whether an entity employing plan participants is considered the DoPT employer. These transactions 

may include asset sales, stock sales, mergers or other corporate transactions. Policy 5.2-2 provides 

that PBGC "will make a facts and circumstances determination regarding payment of early 

retirement benefits as a result of the above and other transactions (e.g., mergers, formation of joint 

ventures or limited partnerships, etc.) in which it may not be obvious whether the entity for which 

participants work continues to be the DoPT employer." 

The transaction between US Airways Group and America West Holdings was a merger, not an 

asset sale. PBGC determined that, under the facts and circumstances presented, you may not begin 

receiving PBGC payment of early retirement benefits under the CE Plan while employed with US 

Airways. PBGC further determined you may begin receiving benefits under the Plan if you 

terminate your employment with US Airways or when you reach your normal retirement age. The 

Board finds that PBGC's determination is correct. 

In your appeal you referred to other participants who retired under the CE Plan before the Plan 

terminated and who you believe continue to receive PBGC benefits although re-employed by 

US Airways. Under the Privacy Act, we are not able to comment on benefits paid to or received by 

other individual participants. Based on our review of the CE Plan, however, PBGC has consistently 

5 A copy of relevant portions of PBGC's policy "5.2-2 Working Retirement" is at Enclosure 5. 

6 The DoPT employer is the employer that sponsored the pension plan as of the Date of Plan Termination, including 

any member of the plan sponsor's controlled group, as determined by PBGC. 

-6­
determined that CE Plan participants who remained continuously employed with US Airways cannot 

continue to work for US Airways and collect pension payments unless the participant has reached the 

normal retirement date under the Plan. PBGC's determinations in the CE Plan are consistent with 

PBGC's determinations in the US Airways lAM Plan and the Pilots Plan.'-ln both the lAM and Pilots 

plans, PBGC determined that the merger did not cause employees of US Airways to experience a 

termination of service with their DoPT employer. Accordingly, plan participants are not entitled to 

collect their pensions simply as a result of the merger. 

Decision 

Applying the law, PBGC's regulations, and the CE Plan provisions to the facts in your case, we 

found no basis for changing PBGC's July 9, 2010 determination that you cannot continue to work for 

US Airways and collect pension payments unless you have reached the Plan's normal retirement age. 

Thus, we are denying your appeal. . This decision is PBGC' s final action regarding your appeal. You 

may, if you wish, seek review of this decision in an appropriate Federal District Court. 

If you have other questions about your PBGC benefit, you may call PBGC's Customer Contact 

Center at 1-800-400-7242 and ask to speak to the authorized representative assigned to the CE Plan. 

Sincerely, 

Virginia Robinson 

Appeals Board Member 

-7­