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Update on Aloha Pension Plan for Flight Attendants
[07.09.08] -- Aloha Airlines’ (the “Company”) Chapter 7 Trustee, Dane Field, has agreed to oversee the termination and distribution of the Company-sponsored Money Purchase Pension Plan for Flight Attendants (the “Plan”).
Also, the attorneys representing the Trustee for the Plan termination has indicated a willingness to allow a partial distribution of monies allocated to individual participant’s accounts prior to the receipt of the final determination letter from the Internal Revenue Service (the “IRS”).
Prior to this decision, the termination process of the Plan was uncertain. When the Company entered bankruptcy and later liquidation, it was unclear who had the authority to deal with the Plan to complete the steps necessary for termination and ultimate distribution of funds and whether there would be any funds available to pay the significant cost of the Plan’s termination.
Generally, as a matter of prudent practice, when any pension plan terminates, the plan administrator applies to the IRS for a final review and a letter that determines that the plan is a “qualified” plan under the Internal Revenue Code. The status of “qualification” includes both the plan documents and the manner in which the plan has been administered.
Often, plan documents need to be amended and updated to include provisions required by recent federal laws regarding pension plans.
This is the case with the Aloha Plan. Plan amendments must be prepared and a submission made to the IRS for this final “determination letter”. This will assure that the tax advantages to each Plan participant are preserved.
Prior to the sale of the cargo division and the decision of the Trustee to oversee the Plan termination, there was neither the authority or the funds allocated to take the necessary steps to further Plan termination, secure the determination letter, and distribute the funds.
In fact, prior to the Trustee’s recent decision to oversee this Plan, other attorneys involved would not agree to the MEC and AFA’s repeated requests for a partial distribution pending receipt of the determination letter from the IRS. Now, it seems that the path is clear for the termination process to move on.
The Benefits Board, made up of two flight attendant representatives and two Company representatives, have met to approve the steps necessary to continue the termination process. The Benefits Board also took the necessary steps to re-allocate the fund investments, to better reflect the upcoming scheduled plan termination and distributions.
You will receive notification by mail, at the most current address the Company has on file, when the plan will be terminated. You will also be receiving notification of time, date, and location of informational meetings that will outline your options. This notification will also include the date that the 50% partial distribution, as of the December 31, 2007 valuation, will be available to you.
We realize this update is long awaited. Please understand that the MEC and Benefits Board members have been working consistently and persistently to move this process along.
In Solidarity,
The MEC & Benefits Board
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