Viewing page 7 of 9
This transcription has been completed. Contact us with corrections.
Q. What happens if the IRS denies Eastern's request for a waiver? A. Eastern will then be required to make the payments. Q. Can Eastern terminate its Pension Plans by itself? A. Eastern has no plans to terminate it's pension plans. Q. It was my understanding that my retirement benefit was guaranteed by Prudential through the purchase of an annuity certificate. Is this true? A. It depends upon the plan under which you retired and are receiving benefit. Pilots who retired on or before February 1, 1987 have a certificate of annuity from Prudential Insurance Company under which Prudential guarantees their benefit. Pilots who retired after February 1, 1987 and participants of the other plans do not, except for a small portion of their benefit that was accrued many years ago. Q. Why don't the Pilots who retired after February 1, 1987 and other plan participants have the guarantee that the other pilots have? A. The Pilot guarantee is provided by Plan provision and the bargaining agreement between Eastern and The Air Line Pilots Association. The Plan and bargaining agreement also provide for an alternative to the guarantee, and, Eastern implemented the alternative for pilots retiring after February 1, 1987, as permitted by that provision. The guarantee has not been a subject of negotiation for the other bargaining groups and Eastern did not provide it to those plans or the Non-Contract Plan because the combination of the Plans' assets and the Pension Benefit Guaranty Corporation insurance for which Eastern pays the premium, (about $2.0 Million for 1988) should adequately protect the benefits of the participants and beneficiaries without the additional expense of the guaranty. Q. I received my benefit from the N/C -IAM -TWU Plan and I am receiving the special benefit to age 62. Will my supplement be cut off if the Plan is terminated? A. Eastern has no plans for terminating it's pension plans. If however, the Plans were terminated and you haven't reached age 62, the supplement may cease because, as far as Eastern knows, the supplement will not be protected by the Pension Benefit Guaranty Corporation (PBGC) insurance. Q. What if the supplement is eliminated in the future for reasons other than Plan termination? A. If in the future, the supplement were to be removed for reasons other than Plan termination, it will continue to those already in retirement and receiving it. Q. At the time of my retirement I selected the 50% Joint and Survivor Annuity. In the unlikely event my spouse would predecease me, will my pension payments revert to the single life annuity form of payment? A. No, once you have elected a payment option and payment has begun under it, the election is irrevocable. Q. Why can't I change my retirement election, after I retire? A. Because the plans have a provision which says so, and, the provision exists to avoid unfair selection against the plans by those whose circumstances change after their elected payment option has begun. Q. For early retirees—If the supplement is taken away or is lowered, will Social Security be affected? A. No. Eastern benefits do not influence or affect Social Security and Social Security benefits do not change or impact Eastern benefits. Employee Stock Ownership Investment Plans Q. What is the status of the 20% Participating Preferred Stock? A. Texas Air Corporation has withdrawn its tender offer to purchase the stock at $16.00 per share. The legal cases before the courts on that subject have become moot and retirees and other former Eastern employees may withdraw the value of the stock or leave it in the plan as they so wish, subject to the terms of the Plan and trust Documents that dictate how the plans will be administered. 6
