Pension Benefit Guaranty Corporation Psec 1200 K Street. N.W.. Washington. D.C. 20005-4026 "LMI)-UUL. 

NOV 1 7 2003 

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

(TWA) Retirement Plan for Pilots (the Plan) 

Dear 71 

The Appeals Board reviewed your appeal of PBGC's September 25, 

2002 determination of your PBGC benefit. For the reasons stated 

below, we must deny your appeal. 

Determination and Appeal 

PBGC determined that you are entitled to a PBGC benefit of 

$2,266.73 per month payable as.a Modified Cash Refund Life Annuity 

(MCRLA) . ' PBGC included a Benefit Statement, which shows 

information the former Plan administrator (TWA) used to calculate 

your Plan benefit. The Benefit Statement shows that PBGC used 

TWAts Plan benefit amount to calculate your PBGC benefit. The 

Benefit Statement also shows that you were entitled to receive a 

temporary PBGC supplement of $229.56 ($2,496.29 - $2,266.73) per 

month from February 1, 2001 through October 1, 2002. 

Your October 3, 2002 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. You also questioned the disposition of your Flight 

Engineers' "A Plan" benefit and included a TWA benefit statement 

(1986 Benefit Statement) showing separate amounts for the Pilot and 

Flight Engineer "A Plan" benefits. 

During a March 2003 telephone conversation, you said that you 

never elected to have your Flight Engineers' benefit merged into 

the (Pilots) Plan. You also suggested that your Flight Engineers' 

benefit should be paid in addition to your Maximum Guaranteed 

Benefit under the Plan. Our Discussion below addresses those 

issues, and the other issues you raised. 

1 Your MCRLA provides a benefit for the rest of your life. Also, because 

the Plan's former sponsor made special contributions on your behalf, your 

beneficiary will receive a benefit if your die before you receive pension 

payments equal to the special contributions plus interest through the date of 

your retirement. 
& 

i Discussion 

1. Request for Additional Information 

Because your appeal requestedmore information about your 

benefit calculation, the Appeals Board sent your request to PBGC's 

Disclosure Officer and infonned you in a letter dated November 29, 

2002 that you had the option of supplementing your appeal within 30 

days after his response. PBGC records show that the Disclosure 

Officer responded to your request on February 13, 2003 with copies 

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

documents shows how your Plan-defined benefit was calculated. See 

Encloeure 1. On' March 18, 2003, we received a letter from you in 

which you challenged the sufficiency of the Disclosure Officer's . response under the Freedom of Information Act (FOIA). We forwarded 

your request for additional documents under FOIA to PBGC1s Office 

of the General Counsel. Your March 18, 2003 letter did not assert 

any additional grounds for contesting the correctness of PBGC's 

determination. 

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 participants 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 TWA's database were reliable. So, for most retirees 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) . 

Page 1 of Enclosure 1 shows how TWA arrived at your accrued 

monthly benefit amount of $2,468.54. This amount agrees with 

line (1) of your PBGC Benefit Statement. Please note that page 1 

of Enclosure 1 shows that this total is the sum of four parts. 

Your accrued benefit based on your employee contributions plus 

interest under the former TWA Retirement Plan for Flight 

Engineers as of the December 1. 1969 mergerdate 

Your additional pre-ERISA accrued benefit under the Plan 

Your additional accrued benefit under the Plan calculated as of 

$20.85 

$141.82 

$384.99 

December 31. 1982 

Your 25% minimum accrued benefit = 25% x $92,202.38 + 12 

Your total accrued benefit at age 60 payable as a Life Annuity with 

a Modified Cash Refund (MCRLA) 

$1,920.88 

$2,468.54 
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I I Documents in PBGC files reveal that. the Plan did not have 

I sufficient assets when it terminated on January 1, 2001 to provide 

all benefits that PBGC guarantees under ERISA. As a result, the 

I 

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

determine the amount of: 

9 your guaranteed benefit, 

9 your ERISA § 4044 benefit, and 

your ERISA § 4022 (c) benefit. 

Enclosure 2 shows how PBGC calculated these benefit amounts 

3. The TWA Retirement Plan for Fliqht Fhgineers and Your 

Contributions to that Plan 

PBGC records show that TWA merged the Flight Engineers' and 

Pilots' plans into one Plan effective December 1, 1969. Thus, 

although you suggested during our March 2003 telephone conversation 

that you made a firm decision to leave your contributions in the 

Flight Engineers' Plan rather than transfer them to the Pilotsq 

Plan, you effectively left your contributions in the combined 

Pilots/Flight Engineers "A Plan" also known as the TWA Retirement 

Plan for Pilots. As noted above, page 1 of Enclosure 1 shows that 

the portion of your Plan benefit attributable to your contributions 

plus interest under the pre-merger Flight Engineers' plan is a 

monthly benefit of $20.85. 

Because the two plans became one Plan effective December 1, 

1969, the benefits you receive as a result of your contributions to 

the pre-merger flight engineers' plan are payable by PBGC under the 

post-merger (Pilots) Plan. PBGC has no authority to undo the 

December 1, 1969 merger of the plans. 

4. Federal Litigation 

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. ~hroughout.these proceedings, the 

interests of the retired and active pilots were represented by the 

Air Line Pilots Association (ALPA). 

On January 5, 1993, TWA, &,PA (and other unions that 

represented TWA employees), and PBGC signed a "Comprehensive 

Settlement Agreement" (CSA) under which: (1) Carl Icahn loaned TWA 

$200 million; (2:) an Icahn-owned concern called Pichin Corp. took 

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 ~ians terminated in 2001. Even though ALPA 

was one of the parties that negotiated 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 Urbina's ruling 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 

1 A copy of Judge Urbina's decision ihttp://www.dcd.uscourts.qov/00-3113.pdfl 

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

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

lhttp://pacer.cadc.uscourts.gov/docs/comm0n/opinions/20o3o7/02-5144a.pdf). 
a writ of mandamus. PBGC's 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 

termination was proper, or to change the termination date. In any 

event, the Board declines to decide the claims that are in 

litigation. 

5. Adjustment of Your Pinal PBGC Monthly Payment Amount 

While appeals are pending, PBGC generally continues to pay 

benefits at the estimated benefit level that PBGC was paying when 

PBGC issued the benefit determinations. When PBGC's Insurance 

Operations Department receivesa copy of this decision, they will 

review your payment history, calculate the total amount by which 

PBGC has overpaid or underpaid you, and if necessary, adjust your 

monthly PBGC payment accordingly. 

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. 

PLKXSE NOTE 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 #I, 

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)