northwest airlines pension plan for contract employees

The Contract Plan, the Salaried Plan and the Pilot Plan will have the same registration rights provided in the Omnibus Agreement dated January 15, 2003 between Pinnacle Airlines Corp., Northwest and Fiduciary Counselors. (c) The term control means the power to exercise a controlling influence over the management or policies of a person other than an individual. The Employee Stock Plan was established through labor negotiations between Northwest and its unions in 1993 to hold contributions of Northwest Airlines Corporation Series C Preferred Stock. His members wages at Northwest average just over $17 an hour, plus benefits. documents in the last year, 19 corresponding official PDF file on govinfo.gov. Northwest responded that no similar legal restriction would apply to the repurchase of Pinnacle Stock pursuant to the exercise of the Put Option. endstream endobj 4 0 obj<> endobj 5 0 obj[/Separation/PANTONE#20368#20C/DeviceCMYK 3 0 R] endobj 6 0 obj<> endobj 7 0 obj<> endobj 9 0 obj<>stream The total value of the Initial Contribution and Additional Initial Contributions made to the Contract Plan was $43,821,894. Fiduciary Counselors' duties also include the discretionary authority to manage the Pinnacle Stock as investment manager. On that day, ALPA, TWUA, NAMA, ATSA and the Company on behalf of its management and non-contract employees exercised the Special Conversion Option, with the IAM and IBT electing not to exercise the Special Conversion Option (63 shares are still owned by the ALPA trust). documents in the last year, 24 ?_QjcbCW DiY;Y(5!%.7C#/7w>IgW*.8t It is the view of the Department that acceptance of an in-kind contribution is a fiduciary act subject to section 404 of ERISA. In view of the comments requesting a hearing, on March 11, 2003, the Department published in the Federal Register (68 FR 11589) a notice of hearing on the Proposed Exemption. These negotiations resulted in agreements (Agreements) between Northwest and each of its unions under which Northwest would contribute to the Employee Stock Plan a newly created, special class of stock (the Series C Preferred Stock) in an amount that would equal the monetary value of certain wage and other concessions agreed to by the unions. Fiduciary Counselors, AIC and Eclat represent that the ASA between Northwest and Pinnacle provided the framework for the final valuation. Since Northwest was prohibited from investing the Pilot Plan's assets in employer stock, the Pilot Plan at that time, did not participate in the investment fund. Moreover, in connection with the Omnibus Agreement entered into between Fiduciary Counselors and Northwest, Fiduciary Counselors negotiated for limitations on Northwest's ability to unilaterally amend or terminate the ASA. WebWhich benefits does Northwest Airlines provide? WebNORTHWEST AIRLINES INC and NORTHWEST AIRLINES PENSION PLAN no CONTRACT EMPLOYEES Defendants-Appellees ON next FROM. In its filing for Chapter 11 bankruptcy protection, Northwest Airlines highlighted a pension deficit that's now reached $3.8 billion. The value of the transaction was also adjusted for the period between the exercise of the put and the Plan's receipt of the funds. Northwest asserts that, if its current cash needs were not so great, Northwest would make its pension contributions in cash as it has in the past. on Definitions at (a) of the Proposed Exemption in column 1 of 68 FR 2590, the reference to 5 percent (5%) of such fiduciary's gross income, for Federal income tax purposes, in its prior tax year, will be paid by Northwest should read 5 percent (5%) of such fiduciary's annual gross revenue in the year of its engagement, will be paid by Northwest.. [3] Northwest Airlines Pension Plan For Contract Employees. As noted in the Department's Interpretive Bulletin, 29 CFR 2509.94-3(d) (59 FR 66736, December 28 1994), apart from consideration of the prohibited transaction provisions, plan fiduciaries must determine that acceptance of an in-kind contribution is consistent with ERISA's general standards of fiduciary conduct. The Independent Fiduciary recognizes that all aspects of its engagement involved fiduciary actions, and, for that reason, representatives of the Independent Fiduciary and its financial and legal advisors actively participated in the negotiations relating to the Omnibus Agreement and in the evaluation of the decision of whether to accept the Contribution. offers a preview of documents scheduled to appear in the next day's Northwest strongly believes that Pinnacle Stock has significant value and that the value of Pinnacle Stock will increase when the IPO market improves for regional airlines. The Proposed Exemption further required that the independent fiduciary obtain expert valuation advice from an independent valuation firm. The Department has determined that it would be appropriate to modify the definition of independent fiduciary as follows: (3) the annual gross revenue received by such fiduciary, during any year of its engagement, from Northwest and its affiliates exceeds 5 percent (5%) of the independent fiduciary's annual gross revenue from all sources for its prior tax year.. regulatory information on FederalRegister.gov with the objective of This prototype edition of the Accordingly, the reference in the first column at 68 FR 2585 to quarterly valuations is no longer correct. The restrictions of sections 406(a), 406(b)(1) and (b)(2), and 407(a) of the Act and the sanctions resulting from the application of section 4975(a) and (b) of the Code, by reason of section 4975(c)(1)(A) through (E) of the Code, shall not apply to: (1) The transfer of the common shares of Pinnacle Airlines Corp. (Pinnacle Stock) to the Northwest Airlines Pension Plan for Salaried Employees, the Northwest Airlines Pension Plan for Pilot Employees, and the Northwest Airlines Pension Plan for Contract Employees (the Plans) through the in-kind contribution(s) of such shares by Northwest Airlines, Inc. (Northwest), a party in interest with respect to such Plans; (2) The holding of the Pinnacle Stock by the Plans; (3) The sale of the Pinnacle Stock by the Plans to Northwest; (4) The acquisition, holding, and exercise by the Plans of a put option (the Put Option) granted by Northwest which permits the Plans to sell the Pinnacle Stock to Northwest; and. Omnibus Agreement at section 7.2, Certain Approval Rights. The value was then increased to reflect the value of the put. After that date, the Omnibus Agreement provides Fiduciary Counselors with the right to cause an IPO of Pinnacle Stock. 6. This exemption is effective as of January 15, 2003. There was no question that James was eligible to In addition, the fiduciary obligation to act prudently requires, at a minimum, that the independent fiduciary conduct an objective, thorough, and analytical critique of the valuation. The Independent Fiduciary retained an independent, expert airlines valuation firm, Eclat, to provide valuation services. pension plan for flight attendants: American Airlines union See Omnibus Agreement at sections 5.1 and 5.2. 03-21162 Filed 8-18-03; 8:45 am], updated on 4:15 PM on Friday, April 28, 2023, updated on 8:45 AM on Friday, April 28, 2023, 126 documents One of the strengths of the Northwest network is that the airline has the least exposure of any major carrier to low-cost carriers in the industry. Finally, Fiduciary Counselors requests that in Section III. The Contract Plan offers four types of pension benefits, each with its own eligibility and benefit vesting requirements: (1) Normal Retirement Pension, (2) Early Retirement Pension, (3) Disability Retirement Pension and On July 11, 2003, Fiduciary Counselors informed the Department that Fiduciary Counselors Inc. (formerly Aon Fiduciary Counselors, Inc.) (Fiduciary Counselors) is no longer a subsidiary of Aon Corporation. Each of these plans is a Code section 401(k) plan that is tax qualified under section 401(a) of the Code and subject to ERISA. Statement Income Company. Maintaining liquidity is key to Northwest's strategy for avoiding bankruptcy. Airline Employee's ERISA Claims Precluded by RLA In conducting such verification, the independent fiduciary must evaluate a number of factors relating to the accuracy and methodology of the valuation and the expertise of the independent qualified appraiser. Northwest and ALPA seek a declaration that the MP3 complies with the Employment Retirement Income Security Act (ERISA), 29 U.S.C. In addition, Northwest shall provide it with copies of any amendments to the credit agreement. James, a former reservations agent for Northwest Airlines, was injured in a car accident and filed a claim for disability pension benefits under Northwest Airlines Websurrey accident today 176 street; Servicios. Fiduciary Counselors assumed that since Northwest could take up to 180 days to settle the option that it would. dog off leash ticket california; Income Tax. On December 2, 2002, the Employee Stock Plan was divided into three components, which were then merged into the existing Northwest Airlines Retirement Savings Plan for Pilot Employees, Northwest Airlines Retirement Savings Plan for Contract Employees and Northwest Airlines Retirement Savings Plan for Salaried Employees. Eclat is an aviation-consulting firm that specializes in detailed analysis of the economic and financial issues that surround the industry. Retirement documents in the last year, 1008 As a result of its review, certain changes were incorporated in the new Airline Services Agreement entered into on January 14, 2003 (ASA). WebRecourse obligation of north carolina; northwest airlines pension plan for contract employees get this defense? These plans cover approximately 161,000 current and retired employees who could stand to lose billions in benefits if these plans were turned over to the Pension Benefit Guaranty Corporation (PBGC). (j) That the fair market value of the stock has been determined by way of a prudent investigation. Northwest Response: Northwest represents that it did not value Pinnacle Airlines for purposes of the Exemption Transactions. Total participants, beginning-of-year. Any decision not to use all Available Cash to effect such partial purchases must be approved by a majority of the directors elected by the holders of the Series C Preferred Stock. The Independent Fiduciary represents that the description of the valuation by Eclat Consulting (Eclat) of Pinnacle in the Proposed Exemption commencing in the second column of 68 FR 2580 (the Eclat Report) should be updated to reflect Eclat's valuation of Pinnacle as of January 15, 2003. These can be useful Northwest noted that the description of the Put Option in the first and second columns at 68 FR 2580 of the Federal Register notice accurately describes the structure of the Put Option as described in Northwest's Application. The Independent Fiduciary negotiated a comprehensive set of governance rights accorded to the Plans as a condition of acceptance of Pinnacle Stock. More frequent notice will be required based on Northwest's liquidity and the value of the Pinnacle Stock contributed to the Plans. 2007) Annotate this Case U.S. Court of Appeals for the Ninth Circuit - 484 F.3d 1211 (9th Cir. Webfunny ways to say home run grassroots elite basketball Menu . During the Hearing, employees of Northwest referenced an employee stock program that was established by the company in 1993. In addition, under the Agreements, the trustee of each plan was given a one time Special Conversion Option that, if elected, resulted in the relevant trusts receiving Common Stock at the rate of 1.9096 shares of Common Stock for each share of the Series C Preferred Stock that they would have otherwise received. The references appear almost halfway down the column beginning in the fourth full paragraph, and in the last paragraph in the column. Northwest Airlines Freezes Pension Plans Under the Omnibus Agreement, Northwest controls the timing of the IPO until the earlier of July 1, 2006 or the occurrence of an early termination event. Future contributions of Pinnacle Stock will continue to be subject to independent review and valuation. The Omnibus Agreement provided for two contributions to be made to the Contract Plan on January 15, 2003. In addition, in the paragraph immediately following subparagraph (iii) in the second column of 68 FR 2580, the reference to the price of Pinnacle Stock being determined as of the exercise date should be expanded to reflect these concepts. Alternatively, Northwest could consider filing for bankruptcy, which would suspend most pension contributions, and could result in termination of some or all of the Plans.. In addition, the Independent Fiduciary reviewed a number of other documents, including SEC Form S-1 filed with the Securities Exchange Commission on February 25, 2002 registering shares of Pinnacle Stock for an IPO and the Airline Services Agreement dated March 1, 2002. Northwest noted that the second bullet point in the third column at 68 FR 2585 (respecting the obtainment of fairness opinions) has been revised. Northwest believes that the final terms for the Put Option, which are more favorable to the Plans, are more completely and accurately stated in the description of the Put Option contained in the description of the Term Sheet as set forth at 68 FR 2587. Each Plan's percentage ownership reflects the relative size of each Plan to each other. In particular, subparagraph (i) at 68 FR 2580 of the Proposed Exemption should reflect that, prior to an IPO, the Plans will be entitled to the greatest of (1) the value of the stock when contributed, (2) the fair market value of the stock on the date that the determination of fair market value is made (e.g., with respect to the Put Option, the date the Put Option is exercised), or, if greater, (3) the value as of the closing date of the Put Option. Northwest Airlines Pension Plan 3 employees reported this benefit 2.0 1 Rating Available to US-based employees Change location Employee Webnorthwest airlines pension plan for contract employees united states district court for the northern district of california san jose division willie f. ticzon, plaintiff, northwest airlines pension plan for contract employees, defendants. Northwest expects that the Start Printed Page 49807board, like any board fulfilling its fiduciary duties, will seek to maximize the value of the enterprise. Northwest Airlines documents in the last year, by the Food Safety and Inspection Service 3. The Independent Fiduciary must ensure that each appraisal, at a minimum, includes the following elements: (a) A summary of the appraiser's qualifications to evaluate Pinnacle Stock. 484 F3d 1211 Opeta v. Northwest Airlines Pension Plan for NORTHWEST AIRLINES PENSION PLAN Additionally, ALPA requested that it be involved in the monitoring of the Independent Fiduciary. Ms. DuVaney is a participant in the Contract Plan, a defined benefit plan for union members established by Northwest Airlines Corp. in 1970, covering all In doing so, Fiduciary Counselors' legal obligations run exclusively to the Plans, not to Northwest. The Independent Fiduciary and its advisors reviewed various documents relevant to the Contribution, including without limitation, Northwest's certificate of incorporation; Northwest's corporate bylaws; the certificate of incorporation of Pinnacle; the Master Trust agreement pursuant to which the Plan assets are currently held and managed; audited financial statements of the Plans for 2000 and 2001; the current Plan documents; the Plans' annual reports on Forms 5500 for 2000 and 2001; other information provided by Northwest regarding the Plans' assets (including the Plans' investment guidelines and portfolio composition); a statement prepared by the Plans' actuaries of the Plans' liquidity needs to pay benefits and administrative expenses in the near future and the sources of funds (other than the Pinnacle Stock) available to satisfy such liquidity needs; and certain of Pinnacle's collective bargaining agreements. Specifically, the Independent Fiduciary negotiated a limited period for the transfer restrictions (until July 1, 2006) and the elimination of such restrictions upon the occurrence of an Early Termination Event. Effective December 31, 1978, section 102 of Reorganization Plan No. Some commenters asked if Northwest would be willing to guarantee the Plans a minimum rate of return on the Pinnacle Stock such as a rate equal to the inflation rate. Comments: Commenters expressed a concern that the contribution of Pinnacle Stock involves a conflict of interest on the part of Northwest. If the employee 3. The IF Report notes that in the Eclat Report, Eclat's valuation of the Pinnacle Common Stock was considerably lower than the value it ultimately determined for the Independent Fiduciary in the January 15, 2003 Valuation. In addition, the Independent Fiduciary negotiated the right to engage an investment banker on behalf of the Plans in an IPO, at Northwest's expense. 4 of 1978 (5 U.S.C. Without modifications to the pilot collective bargaining agreement, the Proposed Exemption contemplated that the other two Plans would receive a contribution of Pinnacle Stock in an amount equal to the maximum amount permitted under section 407(a)(2) of ERISA, while the Pilot Plan would receive no contributions of Pinnacle Stock. Northwest Airlines, Inc.Current Liability Funded Status at January 1, 2003. The appropriate fiduciary of the Plans (other than the Independent Fiduciary) will determine that such investment will not impair the liquidity of the Plans such that the Plans would not be able to pay benefits and expenses when due. By permitting the contribution of Pinnacle Stock, Northwest is able to preserve needed cash so that it can withstand several years of losses. SUMMARY: This document contains a notice of pendency before the Department of Labor (the Department) of a September 9, 2005 (PLANSPONSOR.com) - Northwest Airlines has frozen two pension plans that cover salaried employees, Business Insurance reports. These tools are designed to help you understand the official document The result was a net value of $339,178,820.00 for the purposes of determining the value of the stock contributed on January 15, 2003. [7] For ease of reference, Northwest refers to the Employee Stock Plan, but the factual discussion of the Series C Preferred Stock remains accurate after the merger with the Northwest 401(k) plans. Kondratowicz, a former customer-service agent for Northwest, is a participant in the Northwest Airlines Pension Plan for Contract Employees, which Northwest administers. Section 1C of the Northwest Pilots Agreement, the Collective Bargaining Agreement between Northwest and the Air Line Pilots Association dated as of September 13, 1998, as amended, or any successor agreement. At that time, the Pilot Plan did not participate in the Pinnacle Stock Investment Fund.[4]. The Independent Fiduciary must not simply defer to the conclusions reached by the appraiser, but rather will take appropriate action to ensure: (a) That the appraisal is based upon complete, accurate, and current data; (b) That the appraiser is appropriately qualified to conduct the valuation; (c) That the valuation methodologies are appropriate and adequately explained and that the appraiser has adequately justified its decision not to use alternative methodologies; (d) That any variables used in the valuation analysis such as projected revenues, expenses, operating margins, depreciation, discount rates, capitalization rates, and multipliers are adequately supported by market data; (e) That the stock's value is calculated with appropriate discounts for lack of marketability and control after a reasoned evaluation of the relevant market data concerning such discounts, as well as of each Plan's actual ability to effectively dispose of its stock or to control Pinnacle; (f) That the appraisal's reasoning and assumptions are consistent, logical, and supported by appropriate financial and economic data and that any calculations are accurate; (g) That the valuation is based on complete, accurate, and audited financial statements, which have been properly analyzed; (h) That the assumptions underpinning the valuation are properly identified, and a careful analysis is performed of the impact of changes in those assumptions on the value of Pinnacle Stock; (i) That the valuation has appropriately considered Northwest's financial condition in valuing Pinnacle Stock, as well as the impact of a Northwest bankruptcy on the value of Pinnacle Stock; and.
The Swiss Lottery Tropico 5 Numbers, Dallas Open Tennis 2022, Chrysanthemum Tea Fertility, Can Sinus Infection Cause High Blood Pressure, How To Make It Rain In Terraria Calamity, Articles N