PBGC Pension Benefit Guaranty Corporation 

pmteCting A~..~C... wnsionr 1200 K Street, N.W., Washington. D.C. 20005-4026 

JUN 1 3 2005 

Re : Case 194025, Trans World Airlines, Inc. 

(TWA) Retirement Plan for Non-Contract Employees (the 

Non-Contract Plan) 

Dear 1 1 

The Appeals Board reviewed your appeal of PBGC's November 7, 

2003 determination of your benefit under the Non-Contract Plan. As 

explained below, we must deny your appeal. 

Benefit Determination and Appeal 

PBGC determined that you are entitled to a monthly PBGC 

benefit starting on your Actual Retirement Date (June 1, 2001) of 

$320.67 payable as a Joint and 50% Survivor Annuity, which provides 

a benefit for your lifetime, and if you die first, your eligible 

spouse will receive one-half of your benefit amount for her 

remaining lifetime thereafter. PBGC included a Benefit Statement, 

which showed some of the data used to calculate your benefit and 

also showed that PBGC had accepted the monthly accrued benefit 

amount that TWA calculated. 

Your December 9, 2003 appeal letter stated that your pension 

benefit of $104.46 for your first period of service from March 6, 

1978 to February 24, 1984 should be adjusted to reflect 5.83333 

years of service based on a December 19, 1988 letter from Robert 

Allen, who at that time was a Senior Vice President of Employee 

Relations for TWA. Your letter also suggested that your pension 

benefit for your first period of service should be calculated using 

your final average earnings from your second period of service 

($8,333) rather than your final average earnings from your first 

period of service ($3,613) . 

In accordance with established practice, your December 9, 2003 

appeal letter was referred to PBGC's Benefit Administration & 

Payment Department (BAPD) for an explanation. BAPD8s March 26, 

2004 letter explained that your first period of "Credited Service" 

started on your membership date. BAPD included a copy of the 

"Application for Membership" form that you signed on November 6, 

1981. PBGC's letter also explained that your total accrued benefit 
under the Non-Contract Plan is calculated in two pieces, the first 

equal to the accrued benefit attributable to your first period of 

service and the second equal to your accrued benefit attributable 

to your last period of service. BAPD's letter also said that you 

had an additional 30 days to file an appeal if you still did not 

agree with PBGC1s determination. 

Your April 2, 2004 appeal said that PBGC misapplied the 

December 19, 1988 letter from Mr. Allen. Your appeal letter also 

stated that you were unable to find any Plan "provision that 

provides for use of a Final Average Monthly Compensation based only 

on my compensation during the lSt Employment Period and not based on 

my compensation during my final employment period." 

Discussion 

1. Your Prior TWA Service 

Your appeal letter quoted the following portion of Mr. Allen's 

letter: 

"You will automatically become a member of TWA's Retirement Plan for Noncontract 

Employees with annuity benefit accrual credit for your prior TWA service." 

You suggested that the above sentence gives you "annuity accrual 

creditM for all of your prior TWA service. 

Section 1.2(kk) of the Non-Contract Plan, on the other hand, 

provides as follows: 

"'Years of Plan Service' means all Service, beginning with the earlier of the Member's Plan 

membership date or the January 1 or July 1 following completion of one Yearof Service, and 

ending not later than December 31,1992. If the Employee did not join the Plan on or priorto 

July 1,1970, Service between July 1.1970 and his Plan membership date Will be excluded. . 

. . 

Based on the above provision and because you did not join the 

Plan on or prior to July 1, 1970, both TWA and PBGC gave you credit 

for the portion of your Service from March 6, 1978 through 

February 24, 1984 that the Non-Contract Plan allows to be used for 

"annuity benefit accrual," namely, the portion of your Service from 

your Plan membership date (January 1, 1982) through February 24, 

1984. PBGC is not authorized under the Employee Retirement Income 

Security Act of 1974, as amended, to guarantee or pay benefits 

larger than those provided under the Non-Contract Plan's 

provisions. 
2. The Final Average Earnings Used to Calculate the Benefit You 

Earned During Your First Period of Service 

At the time you terminated Service the first time, you had 

earned less than ten Years of Service. Section 5.1 of the NonContract Plan provided that you would become vested in your accrued 

benefit only after completion of 10 Years of Service. 

Section 5.2 of the Non-Contract Plan explains why your prior 

Service and the portion of your accrued benefit attributable to 

that Service were not permanently forfeited. It also explains how 

the portion of your accrued benefit attributable to your first 

period of Service must be calculated. It provides as follows: 

"Nonvested Termination -Reinstatement of Service. If the Service of a Memberterminates 

prior to his becoming vested pursuant to Section 5.1 or if he is not othewise vested to any 

extent pursuant to Section 12.4(a), he shall cease to be a Member and his accrued Normal 

Retirement Income shall be cancelled. If he is thereafter rehired as an Employee, he shall 

be credited with his Years of Service before such termination only if - 

(a) he is rehired before he incurs a One-Year Break in Service; or 

(b) he completes a Year of Service following his rehire and the number of his 

consecutive One-Year Breaks in Service is less than the number of his Years of 

Service before termination, or, on or afler January I, 1986. the number of his 

consecutive One-Year Breaks in Service is less than the greaterof (1)five or (2) the 

number of his Years of Service before termination. Any Years of Service not 

required to be counted prior to January 1,1986 shall not be counted for the purpose 

of this calculation. 

Thereupon, calculation of the Member's Retirement Income for the period of 

employment prior to his termination shall be based upon the provisions of the 

Company's Retirement Plan applicable to Noncontract Employees in effect at the time 

he ceased to qualify as an Employee." 

[Emphasis added. I 

So, based on section 5.2 of the Non-Contract Plan, your 

accrued benefit attributable to your first period of Service was 

not forfeited because although you incurred five consecutive OneYear Breaks in Service between February 24, 1984 and January 3, 

1989, you had earned six Years of (Vesting) Service at the time of 

your February 24, 1984 termination. 

In accordance with the portion of Section 5.2 in bold above, 

the Plan's provisions regarding the Earnings that are to be used in 

calculating your accrued benefit attributable to your first period 

of Service are found in Plan section 4.1(A) (4), which provided as 

follows : 
"(4) The following provisions shall apply for the purpose of determining the Member's 

Final Average Monthly Earnings: 

(a) For a Member whose Service terminates or who retires on or after January 1, 

1984 and before March 1,1986: 

(i) Monthly Earnings for the period commencing January I, 1984 shall 

not include the Member's actual Earnings. Such Member's average 

monthly Earnings for the last consecutive twelve months of Service 

as an Employee through December 31, 1983 will be used to 

represent monthly Earnings after December 31,1983; and . . ." 

So, based on the provisions of the Plan in effect at the time 

of your February 24, 1984 termination, your Final Average Monthly 

Earnings are equal to your average monthly earnings for 1983, for 

purposes of calculating your accrued benefit attributable to your 

first period of Service. 

Based on Non-Contract Plan section 5.2 and the Plan provisions 

in effect when you terminated employment on February 24, 1984, the 

Appeals Board decided that the benefit attributable to your first 

period of employment must be calculated using the definition of 

Final Average Monthly Earnings in effect at that time and not the 

definition of Final Average Monthly Earnings in effect at the time 

of your second termination. 

Decision 

Having applied Plan provisions to the facts of this case, the 

Appeals Board decided that we must deny your appeal. This decision 

is the agency's final action regarding the issues raised in your 

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

We regret the delay in resolving your appeal and appreciate 

your patience while we completed our review. If you need other 

information from PBGC, please call the Customer Contact Center at 

1-800-400-7242. 

Sincerely, 

Michel Louis 

Appeals Board Member