Protecting Art;~eri,ca's Pensions 

..: .• \ 

··~ . . . 

Pensi<hn Benefit. Guaranty Corporation 

1200 K ·street, N.W.~ vvashington;_ D.C. 20005-4026 . . ; "-' . ~ 

'· 

September 27, 2011 

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Re: . Appeal United Ai.rlines.GroundEmployees' Retirement Plan (the 

· "Ground Employees' Plan"); Case #: 199224 ·. 

Dear 

·we are respopding tp your appeal ofPBGC's November :23, 2009 determination ofyour benefit 

under the Ground Employees' Plan. For the reasons explained below, we changed PBGC's 

determination by finding tryat you have 11 c:::::::::Jrears of participation, instead o'f 1 0 c::::::::Jyears. . ·. . .. ,,, ' - . ' 

PBGC's Benefit Determiruition and Your Appeal 

PBGC's letter said that you are entitled to a reg·ular PBGC benefit of$588.91 per month as a 

Joint & 100% Survivor Anriuity, which was more than the $557.39 per month you were then receiving 

on an estimated basis. PBGC . also included . a benefit statement showing the information . PBGC used 

to calculate your benefit. · :1 . · •• • 'I 

~~ .. 

PBGC records sho):v you were overpaid from the Plan teflTlination ·date (March 11, 2005) 

through October 1, 2005, arid underpaid·from November 1, 2005 to December 1, 2009. The result was 

a net underpayment On J~nuary 1, 2010, PBGC increased your estimated benefit from $557.39 to 

$588.91 per month. · Als~ on that .date, PBGC paid you a Iutnp sum of to cover the· 

underpayment amount ($7~5:30) plus interest ($19.49). ! 

. -~ . 1 . ' . . . . : . . . 

Your Novemberc:J2009 appeal questioned only the 10c=]years ofparticipation·service 

United Airlines (UAL) ancf PBGC used to compute your benefit amount. You said the terms of a 

Compromise and Release ~greement that settled your· Workers' Compensation claim against UAL 

showed that ( 1) the parties did not dispute the fact that the injury to your was an occupational 

injury and.(2) this meant th~t UAL ''accepted" you~ linjury as occupationaL As a result, you 

believe you were entitled toiuse your Industrial (Occupational) Leave after your personal leave ran out 

on March D 2002. You s~id this would have· given you an additional nine months of participation 

service for benefit purpos~s. for the period beginning March D 2002, when you were placed on 

Extend~d Illness Status_, ~~d e~ding Nove~be.r p ~002, · w~en your emplolym~nt ·terminated. 

Accordmgly;· you asked tha,t we mctease your participatiOn service by 7 months, days: · ':j 

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I 

;· •... , .. . .t 

... • 
__ 

Your appeal and eaflier letters to PBGC i~cluded an extensive chronology and expl~nation of' 

your many contacts with various Union representatives, UAL officials, medical doctors, Workers' 

Compensation attorneys atl.d PBGC employees. You also submitted copies of several documents, 

including ( 1) relevant page'~ from The 2000-2005 Agreement Between United Air Lines, Inc. and The 

International Association 'of Machinists and Aerospace Workers, (2) denials of your claims for 

Workers' Compensation from UAL's Workers' Compensation 

insurance carrier, dated M~rch 2, 2000 and October 30, 2000; (3) a Compromise and Release (the 

C&R) settling your Workers' Compensation claim against UAL that you, your then-attorney and a 

representative froml Isigned on January 6, 2005;( 4) an Order Approving Compromise 

& Release (the Order) signed on February02005 by Judgel !Administrative Law 

Judge for Workers' Compensation, (5) a July02007 letter to you from I !your former 

Workers' Compensation attorney, in. response to your request that he clarify that the Workers' 

Compensation Board had no authority over your Union contractual issues and thus you could not have 

given up any rights under:,that contract, and (6) a July 25, 2007 letter to you from Judge L__ 

responding to your request. for clarification of certain provisions of the Order. 

In accordance with established PBGC proced~n!s, the Appeals Board referred your letter to 

PBGC's Benefits Administration and Payment Department ("BAPD"), the office responsible for 

determining and paying benefits, for a further explanation ofyour benefit. BAPD's January 15, 2010 

response stated that UAL records indicate that you are not entitled to.receive years of participation 

service while you were on, a leave-of-absence from March D 2002 through November[] 2002, 

because you did not receive earnings during that period. BAPD's letter·also quoted the following two 

excerpts from the July 25, 2007 letter to you from Judge · 

Because your case was settled by the Compromise and Release, there 

was never a' finding by a Workers' Compensation-Judge as to whether 

your time off in 2001-2002 was the responsibility of United Airlines. 

You may wish to contact your Union to determine ifthere is any other 

way to cont~st this issue through the contract. 

BAPD concluded, based ori information in PBGC's records and its review ofthe Ground Employees' 

Plan, that their November :i3, 2009 determination is correct. BAPD also gave you 45 days to provide 

the Appeals Board with ad~itional information if you still believe PBGC's determination is wrong. 

You wrote to the Appeals Board on JanuaryD 2010. You again said that your "employer 

acknowledged acceptance in Compromise and Release through their attorney and mine and the court 

wrote 'left hand accepted'.": You believe the following language in the Order, which was previously 

agreed to and signed off on by you, your then-attorney and UAL's Worker's Compensation attorney, 

makes it clear that UALaccepted your injury as work-related: · 

Based upori the facts; it is found that a genuine, good-faith dispute 

exists as to injury to all body parts except I Iarising out of and 

occurring in the course of employment ... (underlining added) · · 

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,, 

You also noted that you requested the letters only after a PBGC employee told you 

that "legal said I had given up all my contractual. rights." You explained that the Workers' 

Compensation Appeals Bo~;trd (WCAB) "does not rule on or hear matters ofunion contractual rights" 

so you did not give up any contractual rights. You pointed out that you know Retirees no longer have 

Union representation because you went down that road already. 

Background 

Effective January I? I94I, the predecessor of United Airlines established a pension plan for 

certain eligible employees·. This Plan has been amended, restated and renamed several times, 

including the name change to its current name, United Air Lines Inc. Ground Employees' Retirement 

Plan, on January I, I994. 

The Ground Employees' Plan terminated, effective March 11, 2005, without sufficient assets 

to provide all benefits and PBGC became Plan trustee on May 23, 2005·. Because oflegallimits under 

ERISA and PBGC's regulations, the benefits PBGC guarantees may be less than the benefits a pension 

plan would otherwise pay. • , 

Plan records PBGC's auditors obtained during the termination process show the following 

information for you: · 

I. 

2. 

Date of birth 

Most recent hire date 

I 

I 

' I 

I 

3. Participation start date I I 

4. E~tended Illness Status began I I 

5. Last participation date I I 

6. Date of termination I I 

7. Annuity starting date I I 

8. Service (vesting) I I 

9. Participation (benefit) service I I 

I0. Age at retirement I I 

II. Employee Group Mechanics 

12. B~nefit Computation Group I 

13. Type of retirement Early 

14. Benefit form J&100%SA 

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Participation Service for Pension Purposes 

As your appeal noted, the amount ofa parti~ipant's benefit under the Ground Employees' Plan 

is based on "participation service." Under Plan section 4.3(a), a Participant "will be credited with a 

Month of Participation for each Month ofService.credited to the Participant with respect to which he 

or she is also credited with Earnings in accordance with Section [3.2]. Section 3.2(a) provides that-­

Generally. An employee or a Participant will be credited with a Month 

of Service for each calendar month for any portion of which he or she 

is either directly or indirectly paid or entitled to payment by the 

Company or an Affiliate for the performance of duties and for reasons 

other than the performance ofduties (such as vacation or sick leave), or 

for any portion of which back pay, irrespective of mitigation of 

damages, has been award to the employee or Participant or agreed to by 

the Comparly or an Affiliate. 

You st~ed earning participation service when you were placed on Extended Illness Status, effective 

March U 2002 because, at that point, you were no longer "either directly or indirectly paid or entitled 

to payment" by UAL. 

Occupational Leave 

Article XIV (Sick Leave)ofThe 2000-2005 Agreement Between United Air Lines, Inc. and The 

International Association ofMachinists andAerospace Workers (the "JAM Agreement") sets forth rules 

for accruing and using both non-occupational sick leave and occupational illness or injury leave 

("Occupational Leave"). Section D of Article XIV desc,ribes Occupational Leave as follows: 

Employees will accrue one (1) day of occupational illness or injury 

leave for each month of continuous service. This accrual will be in 

addition to non-occupational sick leave and may be used for absence 

resulting from occupational illness or injury only. After exhausting his 

occupational illness or injury leave, the employee may use his nonoccupational sick leave credits. He may not, however, use occupational 

illness or injury leave for non-occupational illness or injury under any 

circumstanc,es ... 

Section E of Article XIV describes the procedure for obtaining Occupational Leave: 

When it is necessary for an employee to be absent from work because 

of an occupational injury or illness he must request payment for 

occupational illness or injury leave in writing no later than the pay 

period following his return to service on a form provided by the 

Company.· A Doctor's certificate may be required before granting pay 

for this purtJose. 

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You explained that resolution of your Workers' Compensation case took nearly four years. 

During that time, you had ori your li(the first on and the second 

in · ); you were ·found disabled by th~ Security Administration under their rules 

effective 112001; you retired '2002; and UALfiled for Chapter II· bankruptcy 

protection~mber 9,:2002. ­

When you finally had a status conference at the Workers' Compensation Court on L_____j 

2004, you were told the Workers' Compensation Appeals Board would not hear your request for 


. Occupational Leave for your injury because the Board had no jurisdiction over contractual · 


issues. You then contact~d the National Labor Relations Board and were told they did not have 


jurisdiction. · 

You and I Ion UAL's behalf, eventually agreed to settle your Workers' 

Compensation claim. Onl 12005, you, your attorney and an attorney fromL________j 

signed a Compromise and Release (the C&R) settling your Workers' Compensation claim against UAL. 

The C&R document itself provides, among other things, for the release of any potential rights ·of the 

injured employee to workers' compensation .benefits that are "a compensable consequence of the 

original injury:" You noted that, in the margin below this paragraph, is a handwritten notation "all body 

parts except as to ' which you said was agreed to by the parties before the C&R was signed. 

Judgd lsigned the Order Approving Compromise & Release incorporating that language 

on I 12005. The Order said, in part, that: 

Based upori the facts, it is found that a genuine, good-faith dispute 

exists as to: injury to all body parts except I !(underlining added) 

arising out 9f and occurring in the course of employment ... 

After you received the Order with its statement "excepting" the you contacted various 

lAM officials as you had planned. You were tol<;l that lAM could not help you with your claim for 

Occupational Leave because lAM no longer represented UAL's machinists. You next contacted the 

Aircrafts Mechanics 'Fraternal Association ("AFMA"), the union that replaced lAM, and were told· 

AFMA did not represent retirees. You called UAL's Human Resources Department directly and were 

told UAL would not "address" your claim because the Ground Employees' Plan had tern'linated and 

PBGC was the trustee. You also called and wrote PBGC a number of times beginning in 2005. A 

PBGC employee asked you to seek additional information regarding the C&R and the Order from Mr. 

c::::::::Jand Judge further delaying the process. 

Discussion 

Based on the inforination available to the Appeals Board, we found that (I) the parties to your 

Workers' Compensation case agreed that you~ I injury was work-related, (2) both the Order and 

the C&R explicitly provided that the "good faith dispute" settled by the C&R applied only to injuries 

to body parts other than you~ Iand (3) that the various releases from liability stipulated in the 

Order and C&R dealt with the body parts in dispute under your Workers' Compensation claim and 

other claims that are related to it, but they did not deal with your contractual rights under the JAM 

Aweement for your injury. ·. · · 

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We further found that the fact that UAL authorized its representative to sign offon the "except ,---------, 

L_____j language is evidence that UAL would have accepted your injury as an occupational 

injury for purposes of Occupational Leave under the JAM Agreement. As a result, the Appeals Board 

decided that, for purposes ofcalculating your service under the Ground Employees' Plan, PBGC should 

include Occupational Leave that would have started March 0 2002, the date you were placed on 

Extended Illness Status. With your initial Occupational Leave balance of 738 hours, your salary and 

your Workers' Compensation adjustments, Occupational Leave would have continued until your 

employment ended on 2002. We note that the Pension Worksheet UAL prepared for 

you when you retired in 2002 lists your "Last Participation Date" as I 12002, which is 

consistent with including Occupational Leave for this period. Under the Plan's rules for calculating 

participation service, you earned C months of participation service d Iyears) betweenl__~_j 

1991, your participation start date, andl 12002. 

Decision 

For the reasons described above; the Appeals Board changed PBGC's November 23, 2009 

determination by finding that you have years of participation service under the Ground 

Employees' Plan, instead of the years PBGC determined. This is the Agency's final decision. 

on your participation service. 

We will notify PBGC's Benefits Administration and. Payment Department (BAPD), the 

organization responsible for determining and paying benefits, ofthis decision. BAPD will ( 1) calculate 

your benefit amount based on years of participation service, (2) compute the amount of any 

underpayments owed, and (3) issue you a revised determination ofyour benefit amount with a new 45- . 

day right of appeal. 

Meanwhile, ifyou have questions, please call PBGC's Customer Contact Center at 1-800-400­

7242. 

Sincerely, 

Linda M. Mizzi 

Member, Appeals Board 

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