"Vtt PBGC Pension Benefit Guaranty Corporation 

Protecting America'. Pensions 1200 K Street, N. W., Washington, D.C. 20005-4026 

June 19, 2009 

Re: Appeal 2008~0450; Case 203570; Pension Plan for Employees of US 

Airways, Inc. Represented by the International Association of Machinists and 

Aerospace Workers (the "lAM Plan" or the II Plan") 

Deari "-------

This Appeals Board decision responds to your appeal of PBGC's June 18, 2008 

determination that you are not entitled to a benefit under the lAM Plan. For the reasons we 

state below, we changed PBGC' s determination by finding that you are entitled to a vested 

benefit because you earned an additional five years of Vesting Service and Credited 

Service while you were on furlough from 1991 to 1996. As a result of this decision, PBGC 

will recalculate your benefit and send you a corrected determination with a new 45~day 

right of appeal. 

PBGe's Determination and Your Appeal 

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

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

benefit and you did not meet this requirement. The letter said that you only had 4.2Dyears 

of Service. PBGC also determined that, because PBGC paid you estimated monthly 

benefits, PBGC had paid you $17,844.97 too much and that your benefits would stop on 

August 0 2008. (We note that PBGC has continued to pay you $495.22 per month while 

your appeal has been under review.) 

In your June 24, 2008 letter, you said: 

I believe your determination to suspend my pension benefits and payback previous 

payments are totally incorrect for the following reasons: 

1. Enclosed is a letter, dated June 1, 2004, from US Airways benefits 

administration showing my total credited service to date of termination, 

June D, 2004, is 9.C::Oyears, more than ample time to participate in the 

Plan. Also is shown the lAM pension calculation of $495.22 monthly -

$53.06 x 9.c=J years. 

In accordance with established PBGC procedures, the Appeals Board referred your 

June 24 letter to PBGC' s Benefits Administration & Payment Department (" BAPD" also 
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known as the Insurance Operations Department) for a response. SAPO's July 21,2008 

letter stated: 

We have reviewed the information that you provided and have found that the PBGC 

determination of your benefit is correct. Periods of furlough are not credited for 

purposes of PBGC's guarantee. Returning to active employment is a condition of 

entitlement to the benefit, and participants who were on furlough as of 1/1012005, the 

date of plan termination, did not satisfy this condition, . ,II 

Your July 29, 2008 appeal letter stated as follows: 

When US Airways decided to close our jet engine shop, a mutual understanding 

between US Airways management and the lAM Union that stated all active 

furloughed personnel would continue to accrue seniority and credited service time for 

retirement benefits as a regular employee. This was the agreement. These were 

the rules. 

Historv of the Plan's Provisions Regarding the Crediting of Vesting Service 

and Credited Service While on Furlough 

On July 7, 1992, a partiCipant who had been on a medical leave of absence for 

about 13 years applied for retirement. When US Airways calculated his retirement benefit, 

it stopped his Credited Service and Vesting Service as of the date he started his leave of 

absence. The participant filed a grievance (" Grievance 92j I' ). US Airways 

negotiated a settlement of Grievance 92-1 Iwith the union (the Ii lAM"). Enclosure 1 is 

a copy of the settlement of the grievance. We have removed the grievant's name and 

other personal information to protect his privacy. 

Because Grievance 92-1 1 was based on different interpretations of the 1985 

Restatement of the lAM Plan, US Airways and the lAM took the opportunity to negotiate 

the terms under which all other participants on leaves of absences and furloughs would 

accrue Credited Service during their absence in the future. Thus, the July 29, 1993 Letter 

of Agreement (Enclosure 1) also specifies how participants like you would accrue Credited 

Service in the future. 

When US Airways adopted the January 1, 1993 Restatement of the lAM Plan, it 

clearly attempted to incorporate the terms of the July 29, 1993 Letter of Agreement. The 

1993 Restatement provides the following provisions relating to the crediting of Service: 

(X) Service - employment with the Employer determined in 

accordance with the following rules for the purposes of determining an employee's 

vesting status: 

(1) An em ployee will be credited with Service in full 111 i hs of a 

year commencing on his most recent Employment Date and ending on his 

subsequent Severance Date. 
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(5) A Severance Date shall not occur and absence from 

employment shall be counted as Service if the following circumstances 

apply: 

(a) furlough or leave of absence from employment with the 

Employer if such leave is authorized by the Employer and if the Participant is 

accruing seniority under the terms of the Agreement (except those 

employees who elect a voluntary furlough under a voluntary furlough 

program offered by the Employer, in which case such leave shall not be 

counted as Service); provided, however, that With respect to a Participant 

who commences a leave of absence or furlough after July 28,1993, such 

continuing Service credit during a period of absence from furlough or leave 

of absence shall not exceed a cumulative amount of five years; ... 

(b) military leave while the employee's redeployment rights are 

protected by law; 

provided further, that the employee returns to active employment with the Employer 

when recalled (if furloughed); within 180 days (if leave of absence) or within 90 days 

after he becomes eligible for release from active duty. 

(Y) Severance Date - Severance Date - the earlier of (i) the 

date on which an employee's retirement, death, or other termination of employment 

with the Employer occurs or (ii) the first anniversary of the date on which he is absent 

from work with the Employer as an Employee for any other reason. Notwithstanding 

the foregoing, however, if an employee retires or dies or his employment otherwise is 

terminated during a period of his absence from employment for reasons other than 

retirement or termination, his Severance Date shall be the date of such retirement, 

death, or other termination of employment. For purposes hereof, termination of 

employment means the loss of seniority for reasons other than death or retirement. 

The July 29, 1993 Letter of Agreement was" confirmed" by a Letter of Agreement 

dated September 21,1999. See Enclosure 2. Both Letters of Agreement provide forthe 

accrual of Credited Service for up to five years during a furlough and neither Letter of 

Agreement requires a participant to return to active service after a furlough in order to keep 

the Credited Service that they accrued during the furlough. 

The January 1 , 2001 Restatement of the lAM Plan contains essentially the same 

provisions as the 1993 Restatement. As the result of II restructuring" negotiations in 2002 

and 2003, however, US Airways and the lAM agreed that Vesting Service and Credited 

Service would stop accruing during furloughs as of October 1 ,2002. That agreement was 

signed on January 17, 2003. 

Discussion 

PBGC provides pension insurance in accordance with the Employee Retirement 

Income Security Act of 1974, as amended (" ERISA"). If a plan sponsor is unable to 

support its defined-benefit pension plan, PBGC becomes trustee of the plan and pays 

pension benefits as defined in the plan, subject to legal limitations and requirements set by 

Congress under ERISA. 
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The issue presented by your appeal is whether you had to return to active service 

with US Airways in order to keep the five additional years of Credited Service that you 

accrued between 1991 and 1996 while you were on furlough. 

Based on our review of the whole record, we have concluded that when US Airways 

drafted and adopted the 1993 Restatement, it intended to follow the literal terms of the 

July 29, 1993 Letter of Agreement. This intention is supported by the fact that, when it 

amended Section 2.1 (X)(5) to add phrases regarding furloughs and leaves of absence to 

the provision that previously mentioned only military leaves, it decided to delete the last 

sentence of the previous version. That is, before the Plan was amended in 1993, the last 

sentence of what became the new Section 2.1 (X)( 5) specifically stated: 

If the employee does not return to active employment with the Employer his 

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

to have ceased on the date his absence commenced. 

We have concluded that when US Airways amended the Plan in 1993 by deleting that 

sentence from the end of Section 2.1(X)(5), it thought that it had done all it had to do in 

order to comply with the July 29. 1993 Letter of Agreement and get rid of the 1985 Plan's 

requirement of returning to active service. 

Further evidence that US Airways intended to follow the literal terms of the July 29, 

1993 Letter of Agreement when it adopted the 1993 Restatement is the way it administered 

those provisions. Based on a very thorough review of Plan practice, we have discovered 

that US Airways did not require participants who were on furlough to return to active 

service in order to keep the Credited Service they accrued while they were on furlough 

regardless of whether their furlough ended when they (1) refused recall; (2) quit their 

employment; or (3) started receiving their retirement benefits. 

Based on the above, we have concluded that, in accordance with the July 29. 1993 

and September 21. 1999 Letters of Agreement, the lAM Plan did not require a participant 

to return to active service in order to retain the Credited Service that the participant 

accrued while he was on furlough. 

Decision 

Having applied Plan provisions to the facts of your case. we changed PBGC' s 

determination by finding that you are entitled to a vested benefit because you earned an 

additional five years of Vesting Service and Credited Service while you were on furlough 

from 1991 to 1996. As a result of this decision, PBGC will recalculate your benefit and 

send you a corrected determination with a new 45-day right of appeal. This decision is 

PBGC' s final action regarding your entitlement to a vested benefit under the lAM Plan. 

We regret the delay in responding to your appeal and appreciate your patience while 

PBGC prepares your corrected determination letter. In the mean time, if you need other 

information about your PBGC benefit, you may call PBGC' s Customer Contact Center at 
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1-800-400-7242 and ask to speak to the authorized representative assigned to the lAM 

Plan (Case 203570). 

Sincerely, 

Michel Louis 

Appeals Board Member 

Enclosures (2)