Pension Benefit Guaranty Corporation 1200 K Street. N.W.. Washington. D.C. 200054026 

Re: Appeal No. 1 Trans World Airlines, Inc. 

(TWA) Retirement Plan for Pilots (the Plan) 

The Appeals Board reviewed your appeal of PBGC1s September 27, 

2002 determination of your PBGC benefit. For the reasons stated 

below, we must deny your appeal. 

Determinuti on and Appeal 

PBGC determined that you are entitled to a PBGC benefit of 

$2,366.03 per month starting on your Actual Retirement Date 

(February 1, 2001) payable as a Straight Life Annuity (SLA), which 

provides a monthly benefit for your lifetime and no survivor 

benefit . PBGC included a Benefit Statement, which shows 

information the former Plan administrator (TWA) used to calculate 

your Plan-defined benefit. The Statement also shows that PBGC used 

TWA1s Plan-defined bene-fit amount to calculate your PBGC benefit. 

Your 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. 

Discussion 

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 November 29, 

2002 that you had the option of supplementing your appealwithin 30 

days after his response. PBGC records show that the Disclosure 

Officer responded to your request on January 21, 2003 with copies 

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

documents shows how your Plan benefit was calculated. See 

Enclosure 1. The Appeals Board has not received any supplemental 

correspondence from you. 
2. 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 patticipants and comparing 

the results with the amounts that TWA calculated and stored in 

TWA's pension database, PBGC auditors concluded that the benefit 

amounts in TWA9s 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 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. As a result, the 

provisions of the Plan, ERISA, .and PBGC's regulations and policies 

determine the amount of: 

9 your guaranteed benefit, 

> yourERISA § 4044benefit, and 

your ERISA 5 4022(cl benefit. 

Enclosure 2 shows how PBGC calculated these benefit amounts. 

3. Federal Litiqation 

Your 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. Your letter requests a delay in 

the decision of your appeal until the court decides the issues 

before it. 

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

7 represented TWA employees), and PBGC signed a "Comprehensive 

$ Settlement Agreement1' (CSA) under which: (1) Carl Icahn loaned TWA ? $200 million; (2) an Icahn-owned concern called Pichin Corp. took yi 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 

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

The Bankruptcy Court approved the CSA, and it was later 

incorporated in a Plan of Reorganization approved by the Bankruptcy 

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

decision, which became final and binding. 

The TWA. Pension Plans terminated in 2001. Even though ALPA 

was one of the parties that neg~tiated and signed the CSA, it filed 

a suit to stop the termination and void the settlement agreement. 

Judge Ricardo Urbina of the United States District Court for the 

District of Columbia dismissed the case on March 29, 2002.' 

Following the merger of TwA and American Airlines, the Allied 

Pilots Association assumed representation of former TWA pilots and 

appealed Judge Urbina1s.ru1ing to the U.S. Court of Appeals for the 

D.C. Circuit. 

On July 11, 2003, the Court of Appeals issued its decision 

affirming Judge Urbina's decision. The Court of Appeals held that 

the termination was lawful under ERISA and that the CSA was a valid 

exercise of PBGC's statutory settlement authority" 

Between the two decisions, 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 was decided. On September 8, 

2003, the plaintiffs filed an amended complaint and a request for 

a writ of mandamus. PBGCts response is due in November 2003. 

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 (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 

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

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

1 The Court of Appeals decision is available on the court's web site at 

(http://pacer.cadc.uscourts.gov/docs/common/opinions/200307/02-5144a.pdf). 
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 PBGC's 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 appeal. 

You may, if you wish, seek court review of this decision. 

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

closed, consider any new, specific evidence that you present 

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

obtain any such'evidence, please send it to PBGC, Attn: Insurance 

Operations Department, Trusteeship Processing Division #1, 

P. 0. Box 151750, Alexandria, Virginia 22315-1750. If you need 

more information about your benefit, please call the Customer 

Contact Center at 1-800-400-7242. 

Sincerely, 

Michel Louis 

Appeals Board Member 

Enclosures (3)