Pension Benefit Guaranty. Corporation 

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

: March 4,2011 

\ ". 

. Re: Appeal 2009-c:J; I _ . l Case 203572; Retirement Plan for Flight 

Attendants in the Service of US Airways, Inc. (the "FA Plan" or the "Plan") 

Dear I 

~--~ 

This Appeals Board decision responds to the ~ppeal you filed on bellalf of your client, 

~ _____ -----'~ .regardingPBGC's April 30, 2009 determination of D benefit under the 

FA Plan. For the reasons we state below, the Appeals Board decided that yoUr appeal does not 

. provide.a basis for changing I . is PBGe benefit detennina~on. We must, therefore, 

deny I I's appeal. .' 

This decision was reached by a divided vote of the Appeals Board.1 The dissenting 

opinion of Appeals Board metp.berMichel Louis is enclosed. 

PBGC's Determination and I t's Appeal 

PBGe's April 30, 2009 benefit determination letter stated.that I I is entitled to 

a PBGe benefit of $2,410.78 per month paid in the form of a Straight Life Annuity with No 

Survivor Benefits. 2 PBGC further inforIne9. [ ~ . I that, because the $2,410;78 amount is . 

less than the .estimated monthly benefit ·of$2,649.54 0 has been reCeiving, 0 had been 

. overpaid $12,893.04 after the FA Plan terminated. PBGe told I . I that PBGe would 

I 29 COde of Federal Regulations ("C.F.R.") section 4003.2, which is located in the "Definitions" section of 

PBOC Administrative Review' regulation. defines "Appeals Board" as ','a board comisting of three PBGC officials." 

In this appeal, two Board members voted to affirm PBGC's' detennination and one member dissented. The 

majority's decision ,constitutes the final agency action by PBGC with respect, to I IS appeal. See 29 

C.F.R. § 4003.59 (decision by the Appeals Board). ' '.' 

2 PBGC frequently uses the term "Straight Life Annuity" when it refers to a benefit p~yable for an individual's 

. lifetime. In its communications with plail participants, however, the FA Plan's administrators used either the term 

, "life Annuity" or 'the term "Single Life Annuity" to, describe this type of benefit. In this decision, we will use the 

" term "Single Life Annuity." 

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reduce 0 payments by $76.90 per month until the overpayment amount (without a charge for 

interest) is iepm.d., 

PBG~'s April 30, 2009 letter further stated that PBGC first detennined I I, IS 

benefit u:nder the terms of the FA Plan and then applied the limits under federal pension law. 

PBGC's benefit statement, which is an enclosure to the April 30, 2009 letter, explained that the 

"Phas~-In Limitation" to PBGC's guarantee resulted in a reduction to the benefit PBGC may pay 

I I· The Phase-In Limitation applies to plan amendmen'ts that increase benefits within 

five years of plan tennination. ' 

On May 7, 2009, [ I sent a letter to PBGC's Disclosure Office requesting an 

explanation of how PBGC cal9ulated 0 PBGC benefit and how US Airways. Inc. ("US 

Airways") calculated 0 Plan benefit.3 On May 20, 2009, I I sent to the Appeals 

Division a PBGC Fonn 723 (Request for Additional Time to File an Appeal of a PBGC Benefit 

Detennination).4 On May 21, 2009, PBGC's Disclosure Office sent a copy of I is 

benefit fiJe to O. ' 

In accordance with PBGC's established procedures, the Appeals Board asked PBGC's 

Benefits Administration and Payn'lent Department ("BAPD,"), also known as the Insurance 

OperationS Department, to provide [ - I with an explanation of 0 benefits. On June 15, 

2009, BAPD sent a letter to I I explaining that the benefit fonnula in the FA llian 

required a benefit reduction when [ IS spouse, I I, attained age 62. The 

letter also explained t~at [ IS benefit was affected by the Phase-In Limitation required 

by federal law. 

On June 26, 2009, you sent to the Appeals Division a PBGC Fonn 724 (Appeal of a 

PBGC Benefit Detennination) , signed by I - I. 'With the Form 724, you included a copy 

of a US Airways statement showing a benefit amount of$2,649.54 per month starting on April D, 

2002, and payable as a Single Life Annuity and a letter from I I stating why 0 

believes PBGC's benefit detennination is incorrect. In'the letter, [ I noted: 

I believe that under the Retirement Plan for Flight Attendants in the Service of US 

Airways, I was to be paid aSfugJe Life Annuity, which would not change upon my 

obtaining any given age, nor my spouse obtaining any given age. 

Further, even if this 'pension plan does can for a reduction upon m[e] or my spouse 

obtaining a certain age, that was not represented to me at the time I was about to retire. 

Attached hereto is a letter dated March 22, 2002, which indicated that if the participant 

was JIl3.ITied less than a year,D would be paid as a Single 'Life Annuity. No mention 

was made of any reduction if 0 was married before retirement and upon 0 spouse's 

62nd birthday. The participant could have easily waited for D date, of marriage 

3 In this decision, we refer to "US Airways" is in its capacity as the FA Plan's Admiiristrator, unless th~ context 

of the sentence indicates the company was acting in a different capacity. 

4 On this form, I I noted that 0 was waiting for PBGC's Disclosure Officer to provide 0 with 

records through the Freedom of Information Act. 

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(March 22, 2002) until after D retirement date (April 0 2002) if it was represented that 

there Yiould be a reduction at D spouse's 62nd birthday. . .. 

On July 22, 2009, you supplemen~ed 1 rsappeal. You. noted that benefit 

estimate letters from US AirWays in 1998, 1999 and 2000 all indicate that if a participant is 

single or has been married for less than one year the participant's benefit is paid as a Single Life 

Annuity and that [ 1 believed that 0 benefit "plan" would not change. You enclosed 

copies of the following documents: letters dated September, 9, 1998, July 13, 1999,'and August 

24, 2000 that US Airways sent to 1 r~ the 2004 Summary Plan Description for Flight 

Attendants of US Airways; and I fs Social Security earnings data. You further stated: 

On page number four of the Summary Plan Description it talks about the defmition of 

Family Social. Security Benefit. The definition talks about Ubenefits paid to you because 

of your spouse." . The definition does not talk about benefits payable to the participant 

. and the spouse. It only talks about additional benefits potentially available to 

1 . ·1 because.of D spouse .. 1 rs benefit did not change when D 

husband reached 62. Therefore; under the definition, no change should OJ::cur to D 

benefit. Further, the Family Social Security Benefit definition talks about the Social 

Security Benefi~ payable at age 65. It does not discuss Social Security available at age 

62 and therefore again I don't believe that provision is applicable. 

Finally, enclosed herewith please find the final average earnings summary calculations 

report that D [I I] received. For that, it would appear as though the calendar . 

[years] 1997, 1998, and 1999 were used for calculation of D benefits. I also enclosed 

herewith D social security statement. That statement indicates that for those years D 

income was actually higher than that noted on the calculation sheet . being used With 

regards to Dbenefits. (Emphasis in original.) 

Background 

PBGC insures certain defined-benefit pension plans in accordance with Title IV of the 

. Employee Retirement Incomoe Security Act of 1974, as amended ("ERISA''), 29 U.S.C. 1302-. 

1461. If a plan sponsor is unable to support its defined-benefit pension plan, PBGC becomes 

trustee of the plan and pays pension benefits acco~ding to the plan provisions and legal limits of 

ERISA. 

The FA Plan's History. On July· I, 1962, Allegheny Airlines, Inc. ("Allegheny") 

. established a program to provide retirement income and other benefits for flight attendants and 

their beneficiaries. Following several airline mergers and the change of the company's name 

from Allegheny to "US Air, Inc.," the program was renamed, effective October 1, 1979, as the 

"Retirement Plan. for Flight Attendants in the Service of USAir, Inc." Later. effective February 

21, 1997, the Plan was renamed the "Retirement Plan for Flight Attendants in the Service of US 

Airways. Inc."s The FA Plan terminated on January 10'0 2005, without sufficient assets to 

provide all promised benefits: On February 1,2005, PBGC became statutory trustee of the FA 

Plan. 

S In this decision, our reference to "FA Plan" refers to the pension program under all three of these names. 

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--... - .. ~.---.--------
The FA Plan's Formal Document. The FA Plan's fonnal docwnent has been restated 

in its entirety on four occasions since ERISA's September 10, 1974 enactment. The effective 

· dates of these restatements are: January 1, 1976; January 1, 1985; January 1, 1994; and January 

1, 2001. The January 1, 2001 Restatement of the FA Plan (the ''2001 Restatement") waS in 

effect when I I retired; thus, it is the FA Plan docwnent under which D benefit is 

· detennined. 

PBGe's Dete;mination ofl f~PBGC Benefit. When PBGC becomes trustee 

of a terminated plan; it collects participant information and the plan's governing documents from 

the plan administrator and performs a review of all this information. before making benefit 

detenninatitms. PBGC necessarily relies on the data it receives from the plan administrator· 

unless its review finds errors in the data or a participant suppliesPBGC with documentation 

demonstrating such errors. In applying plan provisions to determine the benefit to which a 

participant is entitled~ PBGC follows the established practice of the plan administrator so long as 

it is consistent with plan docwnents and governing law~ 

After a review of the data and governing documents, PBGC followed US Airways' 

established practice in calculating 1 I!. benefit. PBGC's calculation agreed with the 

calculation previously perfonned by US Airways. PBGC then applied the relevant legallirnit -

the Phase-in Limitation for plan amendments that increase benefits within five years of plan 

termination - which resulted in a downward adjustment of $42.43. 

Summary of Appeals Board's Findings and Conclusions 

. YoUr appeal raises two issues. First, you claim a data error in that I rs FA Plan 

"Earnings" for D thr~e highest· calendar years are lower than the amounts shown in D Social 

Security earnings report. . PBGC had accepted the Earnings infonnation US Airways had used 

when the company calculated I rs FA Plan benefit near the time of D retirement. 

The Appeals Board concluded that the Social Security earnings report you submitted does not 

provide a sufficient basis for changing the Earnings amounts PBGC had used because: (1) the 

report you submitted does not identify the employer or employers who paid I I; and (2) . 

the FA Plan's definition of Earnings differs in some respects from Social Security earnings. 

Second, you challenge the application of the FA Plan's offset for the "Family Social 

Security Amount" PBGC applied this provision in confonnance with the FA Plan's governing 

plan documents and long-standing practice .. In fact, the Plan's practice concerning this provision 

was well enough known and understood by the participants' union that it became the subject of 

· collective bargaining, which resulted in a FA Plan amendment in 2000 to ameliorate the. offset' s 

effect on married participants. PBGC has applied the changes made by the 2000 amendment. 

We also found no basis for concluding that th~ FA Plan's provisions and/or how they were 

appli~ were in violation of applica~le law. Accordingly, the Appeals Board must deny your 

appeal. 

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Discussion 

I. Data Issue: I LS Final Average Earnings 

One element in the FA PLan's calculation of a participant's ~nefits is D Final Average 

Earnings ("FAE"). The.F AE is the participant's highest aver:age earnings based on any three full 

calendar years during the last ten years of employment. Your appeal claims that I' IS 

FAE was calculated' incorrectly because the earnings amounts shown for D three highest 

calendar years (1997, 1998, and 1999) are lower than the amounts shown on DSocial Security 

earnings record. ' 

The FA Plan at Section 2.1 (I) of the 2001 Restatement defines the "Earnings" that the FA 

Plan uses to calculate a participant's FAE as follows: 

(I) Earnings - total compensation for employment as an Employee reported by the' 

Employer on Form W-2 for federal Income Tax purposes in respect to the year specified and all . 

amounts that would have been paid to the Employee for such period but for a compensation 

reduction authorization executed by the Employee pursuant to (A) the US Airways, Inc. 401(k) 

Savings Plan or any other plan sponsored by the Employer qualifying under Section 401(k) of the 

Code, (B) the uS Airways, Inc. Flexible Benefits Plan or any other cafeteria plan under Section 

125 of the Code, or (C) an election to niceivequalified transportation fringe benefits in accordance 

with Section 132(t)(4) of the Code; except that earnings shall not include (1) income imputed to 

the Employee through the exercise of stock options, (2) income attributable to the vesting of stock 

options, (3) income that, pursuant to Section 79 of the Code results from group term insurance 

provided by the Employer, (4) income imputed to the Employee from the exercise of any air travel 

pass privileges by the Employee or the Employees family, or (5) amounts reported by the 

Employer on form W-2 that relate to reimbursement of expenses rather than compensation for 

services such as, but not limited to, meal expenses and moving expenses, or (6) any deferred 

compensation received in the form of a lump sum distribution. 

Similar definitions of "Earnings" are included in the. FA Plan's Summary Plan Descriptions 

("SPDs"). . . 

The prior Plan Administrator calculated I rs FAE as $68,996.68, which 

equates to a monthly average of $5,333.06. PBGC accepted the prior Plan Administrator's 

calculationS. The table below shows for calendar years 1997-1999 the earnings amounts used by 

US Airways and those shown on the Social Security 'report you submitted. 

Year FA Plan Earnin,Ks . Social SecurliY earnin,.gs 

1997 $64,218.50 $65,400 

1998 $63,199.80 $67,370 

1999 $64,571.74 $64,429 

3-year average (annual) $63,996.68 $65,733 

3-year average (monthly) $5,333.06 $5,477.75 

. . . . 

The Social Security earnings record you submitted does not identify the employer or 

~mployers who paidl f Thus, we are unable to determine from this record whether 

the listed SoCial Security earnings for I I ~ere paid exclusively by US Airways. For 

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this reason alone, the Appeals Board found that you have not. provided a sufficient basis for 

changing I 1£ FAR 

fu addition, as stated in the definitions in the 2001 Restat~ment and in the SPDs, the FA 

Plan defines "Earnings'~ as the amount the employer reports on federal W-:2 tax forms with 

certain specified additions and exclusions.6 Because of the additions and exclusions, neither 

I IS W-2 forms nor 0 Social Security eamingsreport would establish with certainty 

the amount of 0 Earnings for FA Plan purpqses. For example, one of the exclusions from the 

FA Plan's Earnings definition - "amounts reported by the Employer on Form W-2 that relate to 

reimbursement of expenses rather than compensation for services such as, but not limited to, 

meal expenses and moving expenses" could be applicable to I IS employment as a 

flight attendant during the years 1997-1999. Likewise, the exclusion for "income imputed to the 

Employee from the exercise of any air travel pass privileges by the Employee or the Employees 

family" could also be applicable to I IS employment during this three-year period. 

As stated above, PBGe relies on the data it receives from the prior plan administrator, 

· unless PBGe's review finds errors ill the data or a participant (or another party) supplies PBGe 

· with information demonstrating that an error had occurred. PBGe's review did not find any 

error in the data used to calculate I is FAR Your submission ofl IS Social 

. Security earnings records does not provide ~mfficient evidence for the Appeals Board to conclude 

that I IS FAE amountis,incorrect. Additionally; we note that the differenc.e between 

the 3-year Social Security earnings average and the 3-year Earnings average used by the FA Plan 

($1,736.32) is less than 3%. This small percentage difference, which could be the result of 

differences in how "earnings" are defined, further indicates that US Airways used reliable data in 

calculating I is FAR Accordingly, the Appeals Board denies your appeal on the FAE 

data issue. . 

II. Plan Interpretation Issue: The Family Social Security Offset 

The remaining issue in your appeal deals with an aspect of the FA Plan's benefit formula 

· called the "Family Social Security Offset.,,7 Sinceplan sponsors are responsible for paying for a 

substantial portion of Social Security benefits, it is not unusual for plans to take Social Security 

benefits into account in determining pension benefits. The FA Plan's Offset is unusual,however, 

in that it also applies to benefits that Social Security provides for the participant's spouse, based 

on the participant's earnings alone.(not the separate earnings of the spouse). The Plan's offset is 

complex and requires an understanding of the benefits available under Social Security to a family 

unit. 

6 You have not provided the Appeals Boards with W-2 forms for ,---I __ -----.JI, nor are they available in PBGC . 

records. 

7 As is explained in more detail below, one of the benefit fonnulas set forth in the FA Plan's fo~l document 

includes an offset for the "Family Social Security Amount." See Section 4.1A of the 2001 Restatement. The term 

"Family Social Security Amount" is defiDed in the ''Deflnitions'' section of the formal document. See section 2.1(0) 

of the 200 1 Restatement. In ibis decisiOn, we refer to the offset as the "Flimily Social Security Offset." 

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A. Background for Plan Interpretation Issue 

Benefits under the Social Se'curity Act In addition to earning a Social SecUrity benefit 

that is based'on her own wages, a married worker eams a Social Security benefit for her spouse. 

In general, a spouse is entitled to a spousal Social Security benefit of 50% of the worker's 

benefit, unless the spouse's own earnings entitle him to a larger benefit in his own right, in which 

case there is no spousal benefit.s Spousal Social Security benefits generally are first payable 

upon both parties' attainment of age 62.9 . . 

, . 

Social Security benefits include the worker's Primary Social Security Benefit ("PSSB," 

which also is referred to as "the old-age worker's benefit"),lo as, well as other benefits that are 

payable to some of the worker's dependents. Section 2.02 of the Social Security Act ("SS 

Act',)Ji desc'ribes the types and the eligibility requirements of all of the "Old-age and survivors 

insurance benefit payments" that ani available to a worker who has earned a vested Social 

Security benefit and to the worker's dependents. 12 

Under Social Security law, the eligibility requirements for the Husband's, Benefit are 

defined as follows: 

(c) Husband's insurance benefits 

(1) The husband ... of an individual entitled to old-age or disability insurance benefits, if 

such husband ... 

(A) has filed application for husband's insurance benefits, 

(B) has attained age 62 or . :. , has in his care (individually or jointiy with such individu1l1) 

at the time of filing such application it child entitled to child's insurance benefits on the 

basis ofthti wages and self-employment income of such individual, ... , 

... and 

(D) is not entitled to old-age or disability insurance benefits, or is entitled to old-age or 

disability insurance benefits based on a primary insurance'amount which is less than onehalf of the primary insurance amount of such individual, ... 

8 42 U.S.C. § 402(c)(I)(D), 402(c)(2) ("Husband's insurance benefits"); see also 42 U.S.C. § 402(b)(1)(D), 

402(b)(2) ("Wife's insurance benefits"). ' 

9 42 U.S,C. §§ 402(b)(l); 402{c)(l). , 

10 42 U.S.C. § 402(a). See also 42 U.S.C. § 415(a) (defmition of "Primary insurance amount"). 

1/ 42 U.S.c. § 402. 

12 [n addition to the Husband's Benefit and the Wife's Benefit (which are discussed in detail·iIi this decision), 

section 2.02 of the SS Act (42 U.S.C. § 402) includes the following benefits: (1) the Child's Insurance Benefit; 

(2) the Widow's Insurance Benefit; (3) the Widower's Insurance Benefit; (4) the Mother's and Father's Insurance 

Benefit; and (5) the Parent's Insurance Benefit. 

7 
shall ... be entitled to a' husband's insurance benefit. 

42 U.S.c. §-402(c)(l). Under current law, the requirements for entitlement to the Wife's Benefit 

mirror the requirements for the Husband's Benefit. 13 

The SS Act provides that the monthly amount of the Husband's Benefit "shall be equal to 

one-half of the primary insurance amount of his wife (or, in the case of a divorced husband, his . 

former wife) for such month.,,14 In the situation where the individual is entitled to a Social 

Security benefit based on his own earnings that is l~ss than the Husband's Benefit amount, the' 

Husband's Benefit is equal to one-half of the wife's Primary Insurance Amount ("PIA") minus 

the husband's PIA payable on their own earnings. IS Thus, if a wife's PIA is $2,000 and her 

husband's PIA is $800" then the Husband's Benefit at the hUsband's. Full Retirement Age 

("FRAn) is equal to $200, where $200 is equal to one-half of $2,000 (or $1,000) minus $800. 16 

Calculation of Husband's Benefit amount under the SS Act mirrors the calculation of the Wife's 

Benefit amount. l7 

The Family Social Security Offset under the FA Plim's.Formulas Between 1975 and 

2000, the FA Plan used a single benefit formula to calculate pension benefits, with that formula 

including a Family'Social Security, Offset. Following complaints that this offset was a kind of 

"marriage penalty," the flight attendants' union negotiated it out of the FA Plan in 2000. The 

change to theoffset first was adopted in a Collective Bargaining Agreement, and, later, it was 

incorporated into the 200 I Restatement. The new benefit formula, which does not include a 

Social Security offset, is the only benefit formula for employees hired on or after May 1, 2000. 

For some participants hired before May I, 2000, such as [ I, the new formula 

was less generous than the older formula. Therefore, the 200 I Restatement provided' that, for 

IJ See 42. U.S.C. § 402(b)(l) .. 

14 42 U.S.C, § 402(c)(2). 

IS 42 U.S.C. § 402(k)(3)(A). 

16 The $200 in this example would be reduced for early commencement if the spouse elects to start receiving it 

before D FRA. See 42 U.S.C. § 402(q) (reductions to.Social Sec;urity benefit amounts for early commencement). 

Postponement of the start date of a Wife's Benefit or a Hu~band's Benefit beyond the later of the individual's or 

the spouse's FRA,. however, does not increase the amount of the benefit. This is because the SS Act defines the 

Husband's or Wife's B.enefit as 50% of the spouse's PIA and further does not provide for a spouse to eam late 

retirement credits on the benefit. 42 U.S.C. § 402(b)(2), 402(c)(2). . 

17 42 U.S.C. § 402(k)(3)(A). 

The SS Act provides that an application for a Wife's Benefit or a Husband's Benefit filed before the 

individual's FRA is deemed to be an application for a PSSB based on her own earning!:; .. 42 U.s.C. § 402(r). This 

deemed application rule, for example, prevents a husband from receiving a Husband's Benefit from an early 

retirement age until his FRA and then "switching" to receive an unreduc~d Social Security benefit based on his own 

eamings record. In some circumstances, however, a spouse may apply for a Husband's Benefit or a Wife's Benefit 

on or after his or her FRA and later switch at age 70 to receive a higher PSSB based on his or her own earnings. 

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participants hired before May 1,2000, a pension would be calculated under both formulas, with ' 

the participant entitled to use whichever formula resulted in the greater benefit. 

The older benefit formula, which is set out in section 4.1A(II) of the 2001 Restatement, 

provides that a participant's yearly retirement income at Normal Retirement is the sum of (C) , 

plus (D), which are defined asfollows: . ' 

(C) Sixty percent (60%) of the Participant's Final Average Earnings less fifty percent 

(50%) of the Participant's Family Social Security Amount, multiplied by the ratio that the 

participant's years of Credited Service on the date the participant's Service ceased bears 

to 25 ifhe has less than 25 years of Credited Service on the date Service ceased; and 

(D) One percent (1%) of the Participant's Final Average Earnings multiplied by the 

number of the Participant's years of Credited Service in excess of 25 but not in excess ,of 

30. 

The new beriefit formula, which is set forth in Section 4.1 A(I) of the 2001 Restatement, 

provides that 'a participaf!,t's yearly retirement income at Normal. Retirement is the sum ·of (A)' 

plus (B). where tA) and (B) are defined as: 

(A) One and sixty four one hundredths percent (1.64%) ofthe Participant's Final Average 

Earnings multiplied by the Participant's years of credited Service, up to a maximum of25 

years; and 

(B) One percent (1%) of the Participant's Final Average Earnings multiplied by the 

number of the Participant's years of Credited Service in excess of25 but not in excess of 

30. 

Section 2.1(0) of the 2001 Restatement defines the term "Family Social Security 

Amount" as follows: 

. . 

(0) Family Social Security Amount - the yearly amount which is payable to the 

Participant as· a monthly old age benefit at age 65 under the Social SeclJ,rity Act (or under 

any similar Federal acts or act as now existing or subsequently amended or created) as in 

effect on his Normal Retirement Date or the date his Service ceases, whichever is earlier, 

including any benefits available to the Participant with respect to his Spouse, but 

excluding any such benefits actually earned by such Spouse. If a Participant's Service 

ceases prior to his Nannal Retirement Date, the Family Social Security Amount to which 

such Participant will be entitled at age 65 will' be based upon the assumption that the 

Participant will not receive, in the future, any compensation which would be treated as 

wages for the purposes of the Social Security Act. 

The Family Social Security Amount shall include benefits available with respect to the 

Spouse of the Participant only after such benefits are actually payable under the Social 

Security Act. If such benefits cease to be payable, the Family Social Security Amount 

shall be reduced by the amount of such benefits. ' 

The Family Social Security Amount shaH be determined by the Plan Administrator based 

on Employer records and shall in no event exceed the maximum offset pennitted by the 

Code. . 

9 
Notwithstanding the' foregoing, if a Participant who retires or tenninates employment 

with vested rights after December 31, 1983, provides to the Plan Administrator within the 

relevant computation period a, statement from the Social Security Administration 

evidencing his actual wages for Social Security purposes for some or all years prior to the 

date his retirement or tennination of employment (whichever date occurs first), such 

wages shall be taken into account as his wages for such years in calculating his Social 

Security benefit for the purposes of this Plan. For years prior to the Participant's, 

retirement or tennination 'of employment for which such a statement is not provided to 

the Plan Administrator during the relevarit computation period, the Plan Administrator 

shall be entitled to estimate the, Participant's wages. Such estimate shall be made in 

accordance with ,a method uniformly applied, which satisfies the rules for use of 

estimated earnings history that are set forth in Revenue Ruling 84-45. 

For purposes hereof, the "relevant computation period" for a Participant shall be a period 

of 120 days beginning on the later of (A) the date of retirement or termination of 

employment with vested rights or (B) the date, on which the Plan Admin'istrator has 

furnished or caused to be furnished to him (1) a calculation of his retirement income 

under this Plan, detennioed with a Social Security benefit calculated on the basis of 

estimated wages, (ii) a statement that the Participant has the right, within the relevant 

computation period, to supply his actual wage history and to have it taken into account in 

calculating his retirement income, and (iii) a statement that the Participant can obtain his 

actual wage history from the Social Security Administration. 

The FA Plan thus provides that, for married participants, the Family, Social Security 

Offset consists of two deductions. The first deduction (which we refer to as the "Participant 

, Social Security Offset" or "Participant Offset") relates to the participant's age-65 Social Sect)l'ity , 

benefit. 'The second deduction '(which we refer to as the "Spousal' Social Security Offset" or 

"Spousal Offset"), relates' to the ~ocial Security benefit "available with respect to the" 

participant's spouse." Section 4.lA(I) of the 2001 Restatement provides, however, that the 

Spousal Social Security Offset does not apply until the younger of the participant and the spouse 

turns age 62. The FA Plan's drafters apparently had decided not to apply the Spousal Offset 

before age 62 because, under the Social Security Act, spousal Social Security benefits generally' 

are first payable upon both parties' attainment of age 62. 

As is stated above, participants such ,as I I receive the greater of the benefits 

calculated under the pre-May 1,2000 fOIll)ula, which includes the Family Social Security Offset, 

and the post-May 1, 2000 formula, which does not. Because the Family Social Security Offset 

may change after the participant's Benefit Commencement Date, it also is possible that the 

benefit formula that will produce the greater benefit amount wiH change. For example, the older 

formula may produce the greater benefit amount before the participant and spouse attain age 62, 

and the new formula may provide the greater amount afterwards. Section 4.1A of the 2001 

Restatement specifically preserves the larger benefit amount in this situation. 

The FA Plan's Calculation ofl I's Benefit In February 2002, I I 

informed US Airways of 0 intent to retire effective AprilO, 2002. US Airways then prepared a 

benefit calculation of 0 estimated pension, which is dated March 22, 2002. See Enclosure 1 to 

this decision (US Airways' March 22, 2002 benefit calculation worksheets) and . Enclosure 2 

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(March 22, 200i letter from US Airways to "---I __ ~~I, with enclosed "Flight Attendant 

Pension Calculation"). 

The -March 22,: 2002 . Flight, Attendant - Pensio~ Calculation _ lists 0 name as 

'ir-~-~II j' and 0 spouse's name and date of birth as ''NA.'' Since US Airways' 

records then showed I rs marital status as "divorced," US Airwaysdetermined that 0 

benefit would be greater under the older formula without a Spousal Sociid Security Offset, rather 

than under the new formula. As is shown in EnclosUre 2, US Aiiways determined _ that 0 

monthly benefit as a Life Annuity starting on April D, 2002 ~d continuing for the rest of 0 life 

was $2,649.54. 

The benefit calculation worksheets -in Enclosure "i further show that US Airways had 

calculated 1 rs benefit under three different scenarios, which are as follows: 

(I) Using the older fonnula with a Participant Offset for [ " 1 but not inc1uding the 

Spousal Offset, US Airways calc.ulated a benefit- of$2,649.54 in the Single Life,Annuity fonnas 

follows: 

(.60 x final average earnings) - (.5 x Participant Offset) x (years of servicel25) + 

(.01 x final average earnings) x (years of service over 25 but not more than 30);-

which is (.60 x $5,333.06) - (.50 x $1,633~90) x (25/25) 4- (.01 x $5,333.06) x 5 ~ 

$2,649.54 _ -

(2) Using the older Offset formula and including the Spousal Offset, US Airways calculated a 

benefit of$2,241.06 as follows: 

Benefit without Spousal Offset - Spousal Offset, which is $2,649.54 -$408.48 = 

$2,241.06. - - , 

The Worksheet further states that the Spousal Offset in this calcuhitiortis "applied ~t the later of 

the Participant and Spouse's Age 62 date," 

(3) Using the new, post-May 2000 benefit formula that eliminates the Family Social Security 

Offset, US Airways c~lcu1ated a benefit of$2,453.21, as fo])ows: 

-(.0164 x final average earnings) x (years of service up to 25) + (.0 I x final 

average earirings) x (years of service' over 25 but not more than 30), which is 

(.0164 x ~5,333.06) x 25 + (.01 x $5,333.06) x 5 ~ $2,453.21. 

In calculation (1) above, the Participant Offset of $1,633.90 represents US Airways' 

estimate ofl is age-65 Social Security Act benefit. _ The Spousal Offsetof$408.48 in 

calculation (2) above equals orie-fourth (25%) of the $1,633.90 amount. This $408.48 amount 

-reflects that: (1) the Hus~and's Benefit under the Social Security Act corresponds to 50% of the 

worker's Social Security. benefit (see more detailed discussion'later in the decision) and (2) the . 

older benefit formula proVid~s that the Family Social Security Offset is multiplied by 50%. 

11 

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Thus, the $408.48 .amount equals $1,633.90 (participant Offset) x 50%· (Spousal Offset 

percentage) x 50% (percentage in FA Plan formula). 

US Airways' calculations of the Family Social Security Offset for [ I were 

consistent with its longstanding practice as the Administrator of the FA Plan. US Airways' 

practice with respect to the offset is explained in more detail in the Appendix to this decision. 

I I married I II Ion March 22, 2002. On April '8, 2002, 0 

I I elected the "Life Annuity" form on the FA Plan's "Retirement Election and Income 

IOptionSj' form (E~clo!~re 3). This notarized form also. contains th~ signatur~ of [ . I 

. who, as I Is sPOllSe, consented to the WaIver of the Jomt & Survivor AnnUIty 

form of payment. 

On April 17, 2002, US Airways revised I " Is pension calculations based upon 

the updated SpOusal information .. See Enclosure 4 (US Airways' April 17, 2002 calculation 

worksheets) and Enclosure 5 (April 18, 2002 letter from US Airways to I I, with 

enclosed "Flight Attendant Pension Calculation") .. The revised calculations took into account 

that [ I already had attained age 62 as of 0 April D. 2002 retirement date, and D 

I I reached age 62 nine days later on April I, 2002. . 

As shown in Enclosures 4 and 5, US Airways detennined that I 1s benefit 

payable as a Single Life Annuity was $2,649.54 from April 0 2002 to April 30, 2002, and 

$2,453.21 from May I, 2002 forward. We ~ote that the revised calculation worksheets show the 

exact same three amounts US Airways had used in the March 22, 2002 benefit calculation. The 

revised "Flight Attendant Pension Calculation," however, differs from the earlier one since it 

shows a reduction to I IS monthly payments starting on May 1, 2002~ This change 

occurred because, as a result of I - . Is marriage, the Spousal Social Security Offset had 

become relevant for the older benefit formula calculations. Also, as required by the FA Plan, 

[ 1s benefit of $2,453.21 from May 1, 2002 forward is based on the new formula, 

since the new fonnula provides a greater benefit amount than the older formula for those. 

payments. 

Although in its revised benefit determination US Aifways calculated I I's 

benefit as $2,453.21 payable from May 1, 2002 forward, the FA Plan did not reduce the payment 

to $2,453.21 on May I, 2002. Instead, the FA Plan continued to paYI I the $2,649.54 

benefit that initially was calculated for 0 as an unmarried participant; rather than the revised 

. benefit amount based on the updated spousal infortnation. 

PBGC's Calculation of~ I's Guaranteed Benefit As stated in I . 1s 

determination letter, PBGC first determined I rs benefit under the FA Plan and then . 

applied the limits under federal pension law. PBGC calculated [ 1s Plan benefit using' 

the same calculation method as US Airways used in 2002. PBGC also reached the same result as 

US Airways, that is: I . IS FA Plan benefit is $2,649.54 from AprilD 2002 to April 30, 

2002, and $2,453.21·frOm May 1,2002, forward, with her benefit paid as a Single Life Annuity. 

After calculating [ Is Plan benefit, PBGC applied the legal limitations that apply to the 

. benefits PBGC guarantees. 

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The guaranteed benefit limitation which affects I rs benefit is the Phase-In 

Limitation. Sections 4022(b)( 1) and 4022(b )(7) of ERISA provide for the "phase in" of a benefit 

increase that results from any plan amendment made or effective within the five years before 

, , Plan termination. Tbis phase in of the increase is equal to the greater 0£20 percent of the benefit 

increase or $20.00 per month (but not more than the increase itself) for each full year the pension 

pian, amendment was in effect before plan tennination. Under ERISA, the time a benefit 

increase is in effect begins with' the later of the date the increase was adopted or the date it 

became effective. 

I rs benefit is increased as a result of.the change in the benefit formula adopted 

May 1,2000, as discussed in the prior 'sections of this letter. The May I, 2000 change was in 

effect for four full years prior to the date the FA Plan terminated. PBGC, therefore, guarantees 

80% of the benefit incr~ase or $80.00, whichever is greater. I rs benefit beginning 

May 1, 2002 is $212.15 more under the new percentage formula than it would have been under 

the older offset fonnula ($2,241.06 under older formula and $2,453.21 under new formula). As 

the benefit increase is phased in at 80%, PBGC guarantees $169.72 of the increase [$212.15 x .8, 

, = $169.72]. Thus~ I" - - . rs PBGC benefit is $2,410.78 [$2,241.06 + $169.72 (allowed. 

phase-in portion of increase) = '$2,410.78]. Accordingly, I rs FA Plan benefit of 

$2,453.21 starting on May 1, 2002 is rt!cluced by $42.43, to $2,410.78, due to the Phase-in 

Limitation. IS ' , , 

B. Appeals Board's Findings and Conclusions Concerning Plan Interpretation Issue 

, On the record before the Appeals Board, it is beyond dispute that PBGC applied ,the 

Family Social Security Offset in accordance with US Airways' long-standing practice. 

, Accordingly, we look to the plan documents in existence at the time I I 'retired, 

including Summary Phm Descriptions ("SPD's") provided to FA Plan participants, to ensure this 

practice was consistent with the governing documents. 

The critical language comes from the definition of Family Social Security Offset in the 

2001 Restatetpent - "including any benefits available with respect to the participant's spouse, but 

excluding any such benefit actually earned by the participant's spouse." US Airways interpreted 

this language to provide an offset for any Social Security benefit potentially payable to the 

participant's spollse on account of the, participant's earnings (whether or not that spousal Social 

18 After the FA Plan terminated, I I continued to receive monthly payments ,of $2,649,54, the same 

amount 0 was receiving before the Plan terminated. As discussed above, I rs correct'PBGC benefit is 

$2,410.78, which includes reductions for both the Spousal Social Security Offset and the Phase-in Limitation. Thus, 

for the time period beginning February I, 2005; I I was overpaid $238.76 per month. PBGC is not 

seeking collection of overpa~nts the FA Plan made prior to its ,termination date. 

PBGC regulations require PBGC to recover overpayments by recouping a sIrialI percentage of a retiree's 

benefits in those' cases where the'retiree is entitled to receive future benefits from PBGC. 29 Code of Federal 

Regulations § 4022.81. As I I is entitled to receive future benefits from P;BGC, PBGC must recover 0 

overpayments through a reduction to 0 monthly payments. 

13 

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Security benefit was actually paid). As is shoWn immediately below, this interpretation was 

clearly communicated to participants in all the SPD's sent to participants in the years leading up 

to I rs retirement. 

The. FA Plan's Summary Plan Descriptions The 1978 Allegheny Airlines Flight 

Attendants Plan SPD ("1978 SPD," with excerpts in Enclosure 6), which was provided to FA 

plan participants to ·explain the plan provisions in effect as of January 1, 1977, states on page 3: 

"If you retire at age 65, you will normally begin to receive full Social Security benefits and 

retirement income from Allegheny's plan. The plan benefit will be equal to 60% of your Final 

Earnings, less 50% of your Family Social Security Benefit." Three paragraphs later, the 1978 

SPO describes the "Family Social Security Benefit" as follows: 

"Family Social Security Benefit" means the annual amount to which you will be entitled 

under the Social Security Act .... This amount will include payments to which you are 

entitled on account of your spouse or dependents when and if they become payable, but 

exclude any Social Security Benefits actually eamed by them. In the event that your 

spouse receives Social Security Benefits actually earned by him or her, your "Family 

Social Security" will still include the amount you·would otherwise have been eligible to 

. receive on account o/your spouse. ,,19 . 

The 1981 SPO for the FA Plan (excerpts in Enclosure 7) states the following concerning 

the Family Social Security Benefit: 

FAMiLy SOCIAL SECURITY BENEFIT means the amount you'll be able to receive 

each year from'Social Security, based on the Social Security Act·in effect when you retire 

or leave USAir. You may be eligible for extra Social Security benefits because of your 

spouse or dependents. In that case, your Family Social Security Benefit wil1 include 

those extra benefits. If your spouse receives Social Security benefits 0 or 0 actually 

earned, that benefit will not be included, but the amount you would have received on 

account of your spouse if 0 hadn't earned separate benefits will still be included.2o 

The 1981 SPD then provides an example where the spouse's Social Security benefit is 50% of 

the· participant's Social Security benefit. 

The 1987 SPD for the FA Plan (excerpts in Enclosure 8) contains the following language 

concerning the Family Social Security Amount: 

You may be eligible for Social Security benefits because of your husband, wife, or 

dependents. In that case, your Family Social Security Benefit will include those extra 

benefits. The most common example is a spouse, who may be eligible for payments 

equal to 50% of yours .. The Plan will count that extra 50% in your Family SoCia] 

Security amount, even ifyciur spouse earns and receives a separate benefit.21 . 

19 1978 SPO at 3 (emphasis added). 

20 1981 SPOat i3. 

2] 1987 SPO at 12: 

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As is the case with the 1981 SPD, the 1987 SPO then provides an example where the spouse's 

Social Security benefitis 50% of the participant's Social Security benefit. 

The July 1992 US Air SPD (excerpts in Enclosure 9) contains a detailed discussion of the 

"Family Social Security Benefit." With respect to the Spousal Social Security Offset, the July 

1992 SPD states: . 

If you are eligibl~ for additional Social Security benefits because of your spouse or 

dependents, the Family Social Security Benefit will in~lude the additional benefit. The 

most common example is a spouse who may be eligible for a Social Security Benefit 

equal to 50% of yours. The· Plan takes into account that additional amount even if your 

spouse earris and receives a separate benefit. 

Example: 

Suppose an employee has a Social Security benefit of $9,900 a year. If this employee is 

married, he or she may be eligible to receive an extra 50% ($4,950) because he or she has 

a spouse. This means the Social Security Benefit used to calculate this employee's 

benefits from this Plan will be $14,850 ($9,900 + $4,950), even if the spouse eams and 

collects a larger retirement benefit on his or her own (subject to certain maximums). 

Your Plan payinents may be increased or decreased over the years to reflect changes in 

your eligibility for a Family Sociai Security Benefit. If your spouse re!iches age 62 

several years after yon retire, for example; your Plan payments will be decreased at that 

point, to reflectthe increase in your·Social Security benefits. If your spouse dies after 

your eligibility for Social Security benefits, your Plan payments will increase to reflect 

the decrease in your Social Security.22 . . 

The Appeals Board found that the FA Plan's practice throughout the time the Family 

Social Security Offset was in effect - which was a time period of more than 20 years was 

consistent with the language in the FA Plan's SPOs. 

: Negotiations and Communications by the Flight Attendants J Union US Airways and its 

union, the Association of Flight Attendants, AFL-CIO (" AF An), negotiated pension benefits 

under the FA Plait. Upon reaching agreement, the parties included the basic pension terms in 

Collective BargairungAgreements ("CBAs"). As discussed below, the Family Social.Security 

Offset became the subject of collective bargaining, and, in 2000; an agreement to. amend the FA 

Plan's benefit formula was reached. 

Accordi~g- to news reports (examples of which are provided in E~closure 10), many US 

Airways flight a~endants objected to the Family Social Security Offset, which some flight 

attendants viewed as a "marriage penalty." The AF A responded by negotiating the new benefit 

formula, which did not contain a Social Security offset. For some flight attendants, however, the 

new fermula was less generous than the older formula. Thus, the CBA and the FA Plan's 

documents provided that flight attendants hired before May 1, 2000 would receive the greater of 

the benefit under the older benefit formula or the benefit under the new benefit formula. 

22 July 1992 SPO at 7-8. 

15 
Enclosure 11 .is a copy of the pages in the CBA signed on May I, 2000 that pertain to the FA 

Plm . 

The Appeals Board found nothing, however, that would indicate that the AF A had 

questioned whether US Airways' practice concerning the Family Social Security Offset was in 

'conformity with the FA Plan's governing documents. Furthermore, after .the F A Plan had 

terminated and had been taken over by PBGC, AF A provided information to participants that 

was 'consistent with the way US Airways had administered the FA Plan. For, example, an 

OctobeI 1,2006 AFA newsletter,(Enclosure 12) stated: 

S. What about the Social Security offset? 

The Social Security offset is reflected in your estimate for a: singJe person. If you are 

married when you get the final determination there will be another deduction. The Social 

Security offset is just part of the formula and is LOOSELY based upon Social Security. ' 

The PBGC does not have access to your Social Security records or your spouse's. The' 

offset is based on' an older Social Security formula and does not reflect cost of living . ' 

increases that Social Security has given. It also does not reflect you[r] spouse's true 

earnings if they are a high wage earner. 

Additionally, AF A newsletters dated October 28, 2008 and November 4, 2008 (also in 

Enclosure 12), which notified flight attendants that PBGC had issued benefit determinations and 

that they had the right to appeal them, stated: "The Social Security offset is already in the 

calculation. Remember that the Social Security offset is only a step down in the formula that 

allows for the person who is age 62, and/or spouse if married, to begin to receive So~ialSecurity 

whether they take Social Security at that time or not. The Social Security offset has nothing to 

do with the actual amount of money you are to receive froni Social Security." 

Language in the FA Plan '$ governing documents. The FA Plan's longstanding practice 

was. to apply a Spousal Social Security Offset that is based on any benefits potentially payable to 

the participant's spouse on account of the participant's earnings (whether or not actually paid). 

Thus, under this practice, the FA Plan applied a Spousal Offset that is 50% of the Participant 

Social Security Offset amount, with the Spousal Offset starting when both the participal)t and the 

spouse had attained age 62. 

The Appeals Board concluded thaUhe FA Plan's practice is consistent with the FA Plan's 

governing documents. 'While the language in the FA Plan alone does not expressly state that 

"benefits available" encompasses benefits only potentially available (but never paid), that is 

certainly a reasonable interpretation of this language ("available" being broader than "paid"). 

And :while the drafter~ of this provision used this broad language to describe the offset, they used 

precise language,in excluding from the offset the Social Security benefit "actually earned" by the 

participant's spouse. This language shows that if the drafters had intended to only offset benefits 

actually paid to the spouse, as opposed to simply available, they knew how to do it.23 

23 The FA Plan's "Family Social Security Amount" definition refers in certain places to the benefits "payable" 

under the Social Security Act. The word "payable" commonly is used in pension plan documents when there is an 

offset for another income sOl:1Tce, since the participant often has the option of delaying payments from the other, 

income source. By using the word "payable" rather than "paid," the offset is applied when the participant first 

16 
/ 

Furthennoie, the FA Plail definition takes into account that,under Social S~urity law, a 

married worker potentially is eligible for two different Social Security benefits: a benefit based 

on the worker's own eamingsand a Husband's Or Wife's Benefit based on the spouse's earnings. 

, These two Social Secunty benefits are oyerlapping in the sense that they potentially are payable 

to the same individual at the same time. Social Security law, however, limits the Social Security 

, benefit that is actually paid to the individual in this potential dual entitlement situation?4 By 

using the broader word "available" rather than paid, the FA Plan's Spousal Social Security 

Offset includes the potential Husband's or Wife's ,Benefit that is not p~d because it overlaps 

with the Social Security benefit based on the worker's own earnings. ' 

, , , 

, , Importantly, when we include the SPDs, which ,according to the Supreme Court are 

, "documents and instl;Uments governing the plan," 25 we do find express statements that potential' 

benefits are within the scope of the offset. For example, the 1981 SPD states: "I{youT spouse 

receives Social Security benefits he or she actually earned, that benefit will not be included, but 

the ~ount you ,would have received on account of your spouse if he hadn't earned separate 

benefits will still be included." 

We further note that the FA Plan's "Family Social SecuritY,Amount" definition does not, 

contain any requirement that the participant submit proof of their spouse's earnings. Proof of 

. spousal earnings would be' necessary if the Spousal Social Secwity Offset is limited to the . 

Husband's Benefit or Wife's Benefit that is actually paid or payable by Social Security.26 . . 

becomes entitled to receive payments from the other income source, even if the participant decides to start them 

later. We Concluded, in the context of the entire "Family Social Security Amount" definition, the word "available" 

is broader than both "paid" and "payable." , , 

.. 

24 As we explained ,earlier, an 'individual with relatively high Social Security earnings of his own (as compared 

to his wife's) may not qualifyjor a Husband's Benefit., If the individual's Social Security earnings are more :' 

,modest., however, he may be entitled to a Husband's Benefit in addition to his own Social Security benefit. The' 

Husband's Benefit in that situation generally will be less than 50% of the Social Security benefit payable to his wife 

based on her oWn earnings. Finally, if the individual is not entitled to a Social SecUrity benefit based on his own 

,earnings, then the Husband's Benefit generally will be 50% of his wife~s Social Security benefit. 

There are e:x.ceptions to the general rules stated above. One exception applies when an individual who has not 

started his.Social Security payments before his full Retirement Age elects to receive a Husband's Benefit before 

,starting his own Social Security benefit. In that situation, the HU$band's Benefit is paid at the full 50% amount until 

the individual starts his own Social Security benefit. Special rules also apply, for example, if the individual lias 

govemmellt employment earnings that are not covered ,by Social Security. ' 

'2$ Kennedy v. Plan Adm'r for DuPont Sav. and Inv, Plan, .129 S.Ct. 865, 877 (2009), citing Curtiss-Wright 

,Corp. v. SclwOnej6ng~, 514 U.S~ 73,84 (1995). 

26 Except in cases where both spouses worked for US Airways, it would not be possible for the FA Plan's 

a~trator to detetmine, based only on the US Airways earnings records for the participant, whether a spoU$e's 

OWl) earnings were so high as to make him or her ineligible for a Husband's or Wife's Benefit (or would preclude 

, payment of that benefit at the full 50%). spousAl earnings records, however, are unnecessary under US Airways' 

interpretation of the offset provision, since the offset includes spousal Social Security benefits that are potentially 

available; but not actually paid. ' 

We further note that the "Family Social Security Amount" definition states that the participant "has the right; . 

, within the relevant computation period, to, supply his actual wage history and to have it taken into ,account in 

17 
For all these reasons, we must uphold US Airways' interpretation of the Family Social 

Security Offset provision as reasonable. 

Appeals Board's Response to Your Arguments 

You'make several arguments as to why the Spousal Social Security Offset should not 

apply to 1 I. First, you claim that the offset should not be applied because [ - .' 1 

was told in letters from US Airways that 0 would be paid a Single Life Annuity, unchanged 

upon D or D spouse's attainment of age 62, or indeed any given age. This argument confuses 

the election of a form of benefit with the Family Social Security Offset. The tWo have no 

relation to one another. A married participant may elect a Joint and Survivor Armuity payable to 

o or D spouse, or, with the spouse's consent, a Single Life Armuity without a survivor benefit. ' 

I ' I, with D spouse's consent, elected a Single Life Annuity, so that if 0 predeceases 

D spouse 0 will not receive any benefits under the FA Plan. Regardless of which of these 

benefitforms are elected, the Spousal Social Security Offset applies. ' ' 

1 states that, if 0 knew about the Spousal Social Security Offset, 0 would '----------:------" 

have waited to marry until after 0 retired. As we have noted above, the FA Plan's 

requirements were expressly explained in the three different SPDs that participants received 

during [ - rs working years, an~ PBGe must administer the FA Plan according to its 

terms. 

You also rely on language in the 2004 SPD, which you claim limits the Family Social 

Security Offset to "benefits paid to you because of your spouse." You contend this means that ' 

the offset should not change on May I, 2002, (when I I attained age 62) because D 

,I Is Social Security payments did not change on that d~te. However, as the 2004 SPD was ' 

issued two years after [ IS retirement to describe plan terms as of 2004, it is irrelevant 

to 0 appeal. But, even if it were, reading the language in context with the rest of the 

explanation in the 2004 SPD demonstrates that US Airways correctly determined 1 ~ 

Family Social Security Offset. The complete language is: 

• Famlly Social S'ecurity Benefit: The' amount of Social Security retirement benefits ' 

payable when you reach age 65, 'including any additional Social Security benefits payable 

to you because of your spouse. For example, if you are eligible for an additional Social 

Security benefit equal to 50%' of your benefit because of your spouse, the Plan takes that 

additional amount into account. The Family Social Security Benefit amount is 

considered in calculating the Plan benefit amounts for participants hired before May 1, 

2000. 

The Family Social Security Benefit ~mount used to calculate your Plan benefit (if, 

applicable) will be based on the Social Security Act in effect when you retire or leave US 

Airways, whichever is earlier. If you leave US Airways before your 65111 birthday, your 

Family Social Security Benefit amount win be estimated based on your earnings up until 

calculating his retirement income." There is no provision in the FA Plan concerning the spouse's wage history. 

With respect to recordkeeping, the FA Plan states only that "the Family Social Security Amount shall be detei:mined 

based on Employer records." 

, 18 

1(~)6 ~ Personal Privacyl 
the date you leave US Airways and will assume that you will not have any ~arnings in the 

future. 

Your Plan payments may be increased or decreased over the years to reflect changes in 

the amount of your Family Social security Benefit. 

For example: 

When the younger of you or your spouse reaches age 62, your Plan payments will pe 

decreased to reflect the changes in your Family Social Security Benefi t amount; or: 

If you and your spouse are legally divorced after you retire, or if your spouse dies 

after your Plan benefits begin. your Plan payments will be adjusted to reflect any 

change in your Family Social Security Benefit amount As such, it is important to 

notify the Plan Administrator of any change in your marital status. You will be asked 

to proVide proof of divorce or death before your benefit payments are adjusted. 

Social Security benefit cost-of-living increases that occur after you retire or leave US 

Airways will not affect your Plan payments. 

When you retire, you will have 120 days from your benefit commencement date to 

provide the Plan Adniinistrator a statement of your actual wage history from the Social 

Security Administration ("SSA"). (The ·SSAprovides these wage history statements on 

an annual basis). Otherwise, the Plan AdminiStrator will calculate your Plan benefit. 

using a Social Security Benefit based on estimated wages. . 

Thus, the example in the 2004 SPD of the decrease when the participant and spouse reach 62 is . 

the very situation I I encountered .. Accordingly, the Appeals Board concluded, for the 

reasons stated above, that your appeal does not provide a basis for changing PBGe's April 30, 

2009 determination ofl Ibenefits. 

C. Appeals Board Majority's Response to Dissenting Opinion 

In addition to the issues you raised, the· dissenting Appeals Board member's opinion 

raises a number of additional issues. A central conclusion in the di~enting member's opinion is 

his view that US Airways, as the FA Plan's administrator, did not follow the language in the FA 

Plan's form~ documents when it applied the Family Social Security Offset. We disagree. As 

stated above, the Appeals Board has concluded that US ~ays' practice in applying the Family 

Social Security Offset was consistent with the FA Plan's governing docwnents. 

19 

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The dissent also discusses IRS requirements and guidance for the integration of Social 

Security benefits with a defmed~benefit plan's benefits.28 We note that, prior to the tennination 

of the FA Plan, US Airways had submitted to the IRS various restated and amended versions of 

FA Plan documents that had included the Family Social Security Offset provisions. The Appeals 

Board majority finds it signjficant that, during· the entire time period betWeen ERISA's 

enactment and the FA Plan's. termination, the IRS had determined' that the FA Plan was a tax-. 

qualified pension plan. 

The Appeals Board ·recognizes that, while pension plans with an offset for the 

participant's own Social Security benefit are common, plans such as the FA Plan that have a 

second. deduction for a "spousal" Social Security benefit'are rare. Probably for this reason, we 

are Unaware of any rulings by the IRS, the Department of Labor, or by any other federal 

government agency that specifically address issues related to "spousal" Social Security offsets. 

Furthermore; we are unaware orany court decision that addresses them. There is no basis for the 

Appeals Board to conclude that US Airways' practice concerning the Family Socjal Security 

Offset, which the Board found to be consistent with the FA Plan's governing documents, 

violated applicable law. 

Finally,' the Appeals Board observes that neither ERlSA nor the PBGC's regulations 

. provide for the adjustment of the long-standing tenns of pension plans according to PBGC's (or 

the Appeals Board's) notions of equity. In collectively bargained plans, such as the one before 

us, the drafting and adoption of pension plan· tenns is left to the give-and-take of the negotiating 

process .. In fact, the benefit offset provision under review here, as well as the FA Plan practice in . 

implementing it, was sufficiently well known and understood that it became the subject of 

collective bargaining. That process resulted, through the collective bargaining agreement in 

2000, in the amelioration of the offset provision. It is not up to· the Appeals Board to further 

adjust that bargain after-tbe-fact, no matter how appealing a case can be made for it. 

Decision 

. Having applied the law, PBGC's regulations, and the FA Plan provisions to the facts of 

r s case, the Appeals Board decided that your appeal did not provide a basis for 

':::;chL::an==gm~' -=g--;=I =-~~~rs PBGC benefit detennination. Thus, we are denying your appeal. This 

decision is PBGC's fmal action regarding your appeal. You may. if you wish, seek review of 

this decision in an appropriate federal district cQurt. ' 

28 Those" requirements are designed to ensure that a pension plan integrated with Social Security does not 

discriminate in favor highly compensated employees in violation of the Internal Revenue Code's ("Code's) 

nondiscrimination requirements. See Code sections 401(a)(4); 41O(b). Neither the appellant nor the dissent alleges 

that the FA Plan violated lhe Code,'s nondiscrimination requirements. 

In addition, because the nondiscrimination rules are part ofthe.Code's tax-qualification requirements, a pension 

plan's failure to satisfy those rules may result in disquaJification of the plan. However. if done in a timely manner, 

the nondiscrimination rules allow a pension plan to adopt a retroactive amendment to increase coverage or add a 

benefit to the p1an.See Trea. Reg section 1.401(aX4)-1l(gX2). 

20 

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