Pension,Benefit Guaranty Corporation 

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

Ui COYBNUBII*FBCI 

December 16, 2002 

Re: Appeal 71 

Pan American World Airways, Inc. ("Pan Am") 

Cooperative Retirement Income Pension Plan ("CRIP") 

Dear 71 

We are responding to your appeal of PBGC's January 29, 1998 

determination, re-mailed to you on July 24, 2000, that you were 

entitled to receive $125.58 per month, if paid as a'straight Life 

Annuity starting May 1, 2005 (age 60) .' Effective October 1, 2000, 

PBGC started paying you $89.61 per month, as a Straight Life 

Annuity. As explained below, you have not presented. a basis for 

changhg PBGC's determination. 

PBGC determined your benefit applying the CRIP benefit formula 

to your combined service at National Airlines, Inc. ("National") 

and at Pan Am. Your benefit is larger under CRIP's formulas than 

under the benefit formula in the pension plan you participatedin 

at National. Also, PBGC fully guarantees your benefit, so CRIP's 

underfunding has no affect on what PBGC is paying you. 

Your ADDeal 

In your July 31, 2000 and August 1, 2000 letters, you stated 

you did not receive PBGC's determination in 1998 because PBGC 

mailed its letter to New York while you lived in Florida. You 

concluded your benefit should be made retroactive to May 1, 1995, 

your Earliest Retirement Date. See section 8 on page 7. 

You asked that no action be taken on your appeal until PBGC 

fully explains your benefit calculation and then gives you time to 

perfect your appeal. You stated you 'may have been improperly 

denied payment of a 'subsidized' early retirement benefit." You 

also stated the following: 

. your time to. perfect your appeal should be extended 

indefinitely, pending resolution of the Pineiro lawsuit; 

' PBGC's letter also erroneously said, "You will not receive 

an additional benefit under Section 4022(c) of ERISA because PBGC 

did not collect any money for these benefits from the plan 

sponsor." We explain in this letter that PBGC is already paying 

your full CRIP benefit. 
your appeal should be consolidated with the appeals of all 

participants in CRIP and two other Pan Am pension plans; 

PBGC should supply you with calculations, and copies of 

records and other documents which relate to the determination 

of your benefit; 

PBGC should recuse itself from making any determination of 

your benefit and appoint an independent trustee to make such 

a determination; 

PBGC did not use sufficient qualified personnel to perform 

benefit calculations, and your benefit calcuLations were not 

reviewed by Milliman, USA, PBGC's actuarial contractor. 

You believe your average pension earnings to have been 

understated. In particular, you believe your compensation should 

include overtime and bonuses. You questioned whether the accrual 

of CRIP benefits was frozen as of December 31, 1983. 

A81 

Enclosure 6 to this letter is a copy of the portion of CRIP 

document that governs the calculation of your benefit. On 

September 18, 2000, PBGC's Disclosure Officer sent you a copy of 

your PBGC benefit file. 

A1 

In prior'decisions the Appeals Board has: 

decided not to delay deciding appeals such as yours pending 

the resolution of the Pineiro lawsuit; 

found that for participants in Pan Am's IUFA Workforce, CRIP1s 

definition of Compensation includes overtime and bonuses for 

years up to and including 1978, but not for later years; 

decided that CRIP requires calculating Normal Retirement 

Benefits using, comp.ensation and service frozen as. of 

December 31, 1983;' 

. decided that PBGC may pay CRIP's subsidized Early Retirement 

Benefit only if the conditions for that benefit were met as of 

CRIP's July 31, 1991 termination date. Thus, a participant 

could qualify for the subsidized benefit only if (among other 

conditions) as of that date she had been employed by Pan Am 

within 10 years of her Normal Retirement Date. 

However, PBGC determines any eligibility for CRIPfs 

subsidized Early Retirement Benefit using your employment through 

CRIP'S July 31, 1991 termination date. 
found that CRIP's administrators and PBGC correctly used the 

factors in CRIP's "50.7% Table" to adjust Vested Separation 

benefits such as yours for starting early even though these 

factors are more generous than CRIP states. 

These decisions are explained in Enclosure 2. 

Data Relevant to vour Awweal' 

PBGC's files contain the following data relevant to your 

appeal and to your Pan Am and National employment: 

11 (1) I Your date of birth: [ I I I 

(2) 1 Your re-hire date at National: 1 3/02/1979 

11 (3) 1 Date National merged with Pan Am: 1 1/07/1980 11 

Your final 5-year ~&rage Annualized ( 114,493 _ 01 1 

Compensation as of 12/31/83: 

(4) 

Effective date on which CRIP's benefit 

accruals were "frozen": 12/31/1983 

11 (7) 1 CRIPJs termination date: 1 7/31/1991 (1 

Your total Years of Benefit Service as of 

12/31/83: 

5 years 

4 months 

You have not questioned the 4-9/12 Years of Benefit Service 

Pan Am calculated for you through CRIP's December 31, 1983 freeze. 

(8) 

(9) 

(10) 

(11) 

National's Pension Plan 

After Pan Am's merger with National on January 7, 1980, you 

participated simultaneously in both the Pan American World Airways, 

Inc. Flight Attendant's Pension Plan for Former Employees of 

3 National Airlines, Inc. (the "National TWU Plann), and in CRIP. 

Date your employment ended: 

Date you started receiving your benefits: 

Your age on 10/1/2000, in years and 

completed months: 

Your Normal Retirement Date: 

In National TW Plan documents and records this plan's name 

is often abbreviated as "Pan American World Airways, Inc. Flight 

Attendant's Pension Plan." The National TWU Plan was formerly named 

12/04/1991 

10/01/2000 

55 years 

5 months 

5/01/2005 
As with CRIP, the Appeals'Board has found the National TWU Plan was 

amended to calculate Normal Retirement Benefits using service 

frozen as of December 31, 1983. The National TWU Plan merged with 

CRIP effective on January 1, 1989. 

Your Benefit Amount 

Application of the Appeals Board's decisions to the facts in 

your case, as explained below, shows your benefit is $89.61 per 

month. Your Normal Retirement Benefit is the largest of your: 

Alternative I: Monthly Basic Benefit, 

Alternative 11: Monthly'Minimum Benefit, 

Alternative 111: Monthly Updated '~enef it, or 

Alternative IV: National TWU Plan Benefit. 

1. Your Pension Eanrings 

Pan Am's records show your 1979 - 1983 pension earnings as in 

the table below. In reviewing the appeals of participants 

similarly-situated to you, the Appeals Board has reconciled Pan 

Am's Annualized Compensation data with all available sources, 

including detailed hourly wage rate histories contained in 

computerized Pan Am databases. The Board has concluded CRIP's 

Annualized Compensation records are consistent with all available 

sources and should be used to determine the benefits of 

participants such as you. 

As explained below, your benefit is largest under a formula 

which uses your. service instead of your pension earnings. 

Therefore, for simplicity, we calculate your benefit by increasing 

your Compensation to equal your Annualized Compensation if your 

Annualized Compensation is larger. See Enclosures 4 and 5. 

the "National Airlines, Inc. Flight Attendant's Pension Plan," and 

was first effective on January 1, 1976. (CRIP 1445) 
-5- ! 2. Alternative I: Monthly Basic Benefit 

5 Average Formulan for the-IUFA Workforce) 

(also called the "Career 

Your Monthly Basic Benefit is determined by the following: 

For each year or fraction of a year starting in 

January 1, 1979, through December 31, 1983;1.5% of your 

Compensation up to $6,000, plus 2% of your Compensation 

over $6,000. 

CRIPrs administrator's records do not show they calculated a 

Monthly Basic Benefit for you, nor do PBGC's records show your 

Compensation for years before 1981. Using Pan Am's records of your 

pension earnings, we estimated your Monthly Basic Benefit as 

$108.28 if paid as a Straight Life Annuity starting at age 60. See 

Enclosure 4. 

3. Alternative 11: Monthly Minimum Benefit 

Your Monthly Minimum Benefit is calculated by multiplying your 

5-4/12 Years of Benefit Service by the applicable benefit accrual 

rate for your job classification. The former CRIP administrators' 

pension records (Enclosure 1) show you completed 6/12 year (6 

months) of service in jobs classified under the $24 .OO benefit 

accrual rate, and 4 10/12 years (58 months) of service in jobs 

where the $23.50 benefit accrual rate applies. Therefore, your 

accrued Monthly Minimum Benefit is $125.58 {$24.00 x 6/12 year + 

$23.50 x. 4 10/12 years), if paid as a Straight Life Annuity 

starting at age 60. 

4. Alternative 111: Monthly Updated Benefit 

Your Monthly Updated benefit is calculated: i) using your 

service and Average Annualized Compensation on various dates 

between December 31, 1979 and December 31, 1983, and ii) ' adding 

your Monthly Basic Benefit from Enclosure 4 for the years remaining 

through 1983. Using your December 31, 1979 AAC, and you're 1 4/12 

Years of Benefit Service through that date, we have calculated your 

largest Monthly Updated Benefit is $112.46 ($9.063.00 x 1 4/12 year 

x .01667 + 12 months + $9~.67~ Monthly Basic Benefit) if paid as a 

Straight Life Annuity at age 60. See Enclosure 5 for a complete 

calculation of your Monthly Updated Benefit. 

5. Alternative IV: National TWO Plan Benefit (maximum possible 

amount) 

Your benefit cannot be less than the benefit you had earned 

under the National TWU Plan when the two plans merged on January 1, 

' $95.67 ={($331.44 + $354.44 + $250..61 + $211.56 from Enclosure 

4) + 12 months) 
1989. As shown below, we estimated your benefit under the National 

TWU Plan using: 

the National TWU Plan document effective on January 1, 1979; 

3 a a Summary Plan Description, dated January 1, 1979, of the 

National TWU Plan that National produced for participants 

similarly-situated to you; 

worksheets that CRIP's administrators used to calculate the 

National TWU Plan benefits of participants who retired 

effective in 1983, the year in which the accrual of National 

TWU Plan benefits was effectively frozen. 

Estimated National TWU Plan Benefit 

Annual 

Emalovment Estimated Accrual Accrued 

Period Service Rate Benefit 

Before 1976 0 months x $14 - $0.00 

1/76 - 12/3i/83 64 months x $17 = $1,088.00 

Total: 64 months5 $1,088 .OO 

Therefore, your TWU Plan benefit would have been no more than 

$90.67 per month ($1,088.00 + 12 months), if paid as a Straight 

Life Annuity starting at age 65, your Normal Retirement Age under 

the TWU Plan. 

6. Your Normal Retirement Benefit 

Your Normal Retirement Benefit is $125.58 per month under the 

Monthly Minimum Benefit. This amount is larger than your $112.46 

Monthly Updated Benefit, your estimated $108.28 Monthly Basic 

Benefit and your estimated $90.67 TWU Plan benefit. 

7. Reduction for Starting Your Benefit Early 

To qualify for the subsidized Early Retirement Benefit, CRIP 

requires working for Pan Am within 10 years of the Normal 

Retirement Date, which for you is at age 60. This CRIP requirement 

applies regardless of whether your employment ended voluntarily'or 

involuntarily. Because you had not reached age 50 when your 

employment ended on December 4, 1991, PBGC is unable to pay you 

CRIP's subsidized Early Retirement Benefit. Under CRIPJs Vested 

For simplicity, and to verify your National TW Plan 

benefit is less than your CRIP Monthly Updated Benefit, this 

estimate of your National TWU Plan benefit assumes you earned the 

same amount of service under both the National TWU Plan and CRIP. 
Separation Benefit, your Normal ~etirement Benefit must be reduced 

for starting early using the factors in CRIP's 50.7% Table. 

In your August 1, 2000 PBGC Application for Pension Benefits, 

you asked that your benefit be started October 1, 2000. The 

applicable factor from the 50.7% Table at age 55 years 5 months is 

-7134. Therefore, your benefit is $89.59 per month ($125.58 x 

.7134), based on the October 1, 2000 retirement date. PBGC will 

continue to pay you the slightly higher $89.61 amount you are 

currently receiving. 

8. Your Request for An Earlier Benefit Start Date 

You have asked for the opportunity to make your benefit 

retroactive to May 1, 1995, because PBGC's 1998 letter shows PBGC 

did not have your correct address. PBGC had Pan Am's 

,Florida address for you,l 1 until after 

PBGC's Authorized Plan Representative (the "PAR") moved to its 

current Atlanta locations in 1996. The PAR notified participants 

of its moves from New York, and participants's mail was forwarded 

to the PAR after its moves. Also, participants could still contact 

the former Pan Am's office in Rockleigh NJ until 1997. Under these 

circumstances, it is PBGC's policy to require participants such as 

you to apply for their benefits in advance, such as you did in 

August 2000. 

Therefore, you have not presented a basis for making your 

benefit start retroactive before the October 1, 2000 date you chose 

in August 2000. Also, if your benefit were effective on the May 1, 

1995 date you requested, your $89.59 benefit would have been 

further actuarially reduced to $63.67 {$125.58 x .5070}. Because 

of the reduced amount, you receive the full value of your benefit 

regardless of which benefit start date applies to you. 

Where to Submit Anv New Evidence 

PBGC will always - even after an appeal is closed - consider 

any new, s~ecific evidence you present showing you may be entitled 

to a different benefit. Please send any such information to: 

PBGC Authorized Plan Representative 

1175 Peachtree Street, N.E. 

100 Colony Square, Suite 500 

Atlanta, GA 30361 

You may also contact PBGC's Authorized Plan Representative at 1- 

800-400-7242 extension 2000. 

Decision 

Given the Appeals Board's decisions on appeals which have 

raised the same issues you have raised, you have not presented a 
basis for changing PBGC's determination. This letter concludes 

your administrative remedies with respect to PBGC's January 29, 

1998 determination. You may, if you wish, seek court review of 

PBGC1s determination with respect to the issues you have raised. 

We appreciate your patience during this extensive review of your 

appeal. 

Sincerely, 

O&d 

William D. Ellis 

Appeals Board Member 

Enclosures: 

1) Pan Am's "Personnel Master" database record for you 

2) Explanation of Certain Appeals Board Rulings Involving 

the Pan Am "CRIP Planw (8 pages) 

3) Summary of CRIP's provisions (2 pages) 

4) Estimate calculation of your Monthly Basic Benefit 

5). Complete calculation of your Monthly Updated Benefit 

6) CRIP document, Section I, Appendix F (5 pages)