See Omnibus Agreement at section 6.2. Northwest states, as noted in the Proposed Exemption, that the Master Trust is established in a manner such that all Plans hold an undivided and commingled interest in the assets of the Trust. Northwest reported that the Omnibus Agreement was executed between Pinnacle Airlines Corporation (Pinnacle), Northwest Airlines, Inc. (Northwest), Northwest Airlines Corporation (NWA Corp.) and Aon Fiduciary Counselors, Inc (Fiduciary Counselors). The Omnibus Agreement also provided for an Additional Initial Contribution to the Contract Plan in the amount of $2,671,983 (118,167 shares valued at $22.61 per share). Fiduciary Counselors' duties also include the discretionary authority to manage the Pinnacle Stock as investment manager. Eclat will furnish a similar valuation report with respect to each subsequent contribution. Based on input from AIC, Eclat then applied a 15 percent liquidity discount and a 5 percent minority discount. on (i) An analysis of Pinnacle's financial condition and earning capacity. Comment: A number of comments noted that the airline industry is experiencing significant financial troubles and that some other airlines are in bankruptcy. Northwests filing with the Securities and Exchange Commission says that participants benefits accruals were frozen as of August 31. Northwest Retiree Benefit Trust exclusively for Northwest Northwest also believes that the value of Pinnacle Stock is less exposed to bankruptcy risk than Northwest stock. This voluntary contribution will eliminate the funding requirements under the Code and ERISA for the 2003 Plan Year that would otherwise be payable with respect to the Pilot Plan. documents in the last year, by the National Oceanic and Atmospheric Administration Thus, the fourth bullet point in the second column at 68 FR 2585 (describing certain voting rights) should be modified accordingly. This table of contents is a navigational tool, processed from the Eclat states in the January 15, 2003 Valuation that the valuation includes competitive, operational and financial elements essential to validating Pinnacle's current market viability as a Northwest regional partner and as a stand-alone airline and that the valuation describes the state of the regional airline industry, delves into some of the more important issues surrounding Pinnacle specifically, provides a brief financial review of the carrier, explains the valuation methodology, compares Pinnacle to Continental Express, and comments on the stability of Northwest. Reliance solely on the valuation provided by the appraiser would not be sufficient to meet this prudence requirement. 612-726-3774. 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. 1. The complete Application file, including all supplemental submissions received by the Department, is available for public inspection in the Public Disclosure Room of the Employee Benefits Security Administration, U.S. Department of Labor, Room N-1513, 200 Constitution Avenue, NW., Washington, DC 20210. Pinnacle's compensation formula within the ASA contractually provides for a target operating margin of 14 percent from 2003 through 2007, with a guaranteed floor of 12 to 13 percent during this period. Comment: Several commenters expressed concern that the exemption would expose the Plans to increased underfunding in the future. (a) The term independent fiduciary means a fiduciary who is: (1) independent of and unrelated to Northwest and its affiliates, and (2) appointed to act on behalf of the Plans for all purposes related to, but not limited to, (A) the in-kind contribution of the Pinnacle Stock by Northwest to the Plans, (B) the holding of the Pinnacle Stock by the Plans; (C) the acquisition, holding, and exercise by the Plans of the Put Option, and (D) any sale of the Pinnacle Stock by the Plans. WebThe Pension and Welfare Benefits Administration (PWBA) is responsible for the administration and enforcement of Title I of the Employee Retirement Income Security (n) An analysis of the degree to which actual control (both in form and in substance) will pass to any of the Plans as a result of any of the contemplated transactions, (o) To the extent that Pinnacle's current or projected revenues and expenses are related to, or dependent upon, contracts, agreements, or understandings between Northwest and Pinnacle, an analysis of Northwest's financial condition, the likelihood of a Northwest bankruptcy, and the potential impact of a Northwest bankruptcy on those contracts, agreements, or understandings, and on the market value of Pinnacle Stock, and. Eclat's original valuation for PBGC was based on publicly available information, primarily a draft S-1 Registration Statement which contained financial information only for the first nine months of 2002. 04/28/2023, 244 Other employee groups at the carrier are left with a 401(k) plan that offers no guarantee and places the investment risk on employ-ees themselves. In addition to determining the value of Pinnacle Stock at the time of a proposed contribution, the Independent Fiduciary will provide an annual written valuation of the per share value of all Pinnacle Stock held by the Plans as of each December 31 and at any time the Independent Fiduciary exercises the Put Option described below. Fiduciary Counselors states that the Omnibus Agreement provides: Fiduciary Counselors stated that, in conjunction with Northwest's contribution of Pinnacle stock to the Plans, Northwest has provided the Plans with a Put Option to protect them from a possible decline in Pinnacle's shares' value. As Successor to Northwest Airlines, Inc., and Northwest Airlines Pension Plan for Contract Employees, Defendants, 10 Civ. In addition, U.S. Airways has recently signed an agreement with Mesa for more regional aircraft. NWA Corp. has the option to repurchase such shares in cash, by the issuance of additional Common Stock, or by the use of cash and stock. In 1994 through 1997, Northwest made annual contributions of Series C Preferred Stock to the Employee Stock Plan for the benefit of employees represented by the IAM and IBT (the other labor groups had converted their right to receive Series C Preferred Stock into Common Stock under the Special Conversion Option described below). See Omnibus Agreement at section 6.3. WebNorthwest Airlines Pension Plan for Contract Employees, 484 F.3d 1211 Brought to you by Free Law Project, a non-profit dedicated to creating high quality open legal information. This period could range between 30 and 180 days depending on Northwest's liquidity position. In this process, Northwest and Fiduciary Counselors each select their own nationally recognized valuation expert (Principals' Experts), which experts submit their appraisals to a third expert chosen by the Principals' Experts. 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. On January 11, 2003, the Independent Fiduciary and its advisors conducted a telephone interview with Pinnacle's chief executive officer and chief financial officer as part of its due diligence. [FR Doc. Additionally, by letter dated July 15, 2003, Fiduciary Counselors represents that in preparing the valuation for subsequent contributions, Eclat will reexamine the assumptions used in preparing the initial valuation and will continue to stress test the assumptions in its valuation model to reflect the credit-worthiness of Northwest and changing conditions in the regional jet market. northwest airlines pension documents in the last year, 887 68 FR 49792 - Northwest Airlines Pension Plan for Salaried Employees (Salaried Plan), the Pinnacle contributed over $500 million in revenue to Northwest in 2002 and is expected to grow its regional jet flying approximately 30 percent per year through 2005. Recursos Humanos. Several commenters asked whether the Plan trustees should decide when to initiate a public offering since the Plans will own a majority of Pinnacle Stock. Accordingly, based upon the representations made by the Applicant, the written comments received in response to the Proposed Exemption, the record of the public hearing, and the analysis conducted by the Independent Fiduciary, the Department has determined to grant the exemption. As Northwest's track record demonstrates, Northwest agrees that the Plans need to be soundly funded. In its deliberations, which included its analysis of all aspects of the transactions, the Independent Fiduciary has consistently represented for the record that no contribution of Pinnacle Stock will be accepted on behalf of the Plans unless such transactions are found by the Independent Fiduciary to be in the interests of the Plans. In addition, a fiduciary must act for the exclusive purpose of providing benefits to participants and beneficiaries; must act prudently; and must diversify the investment of plan assets to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so. Pension Benefit Guaranty Corporation. documents in the last year, 494 As the Plans' independent fiduciary, Fiduciary Counselors must act prudently and in the interests of the Plans and their participants. Northwest Airlines: Employee Benefits and Perks | Glassdoor 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. Web1. Any change to the ASA, including any early termination of the ASA by Pinnacle, must be approved by a majority of Pinnacle's independent directors, which majority must include the director designated by the Plans. Any transaction involving Northwest outside the ordinary course of business that involves more than $2 million and any ordinary course transaction that involves more than $5 million must be approved by a majority of the independent directors. Eclat furnished to the Independent Fiduciary its report and opinion as to the value of the contributed Pinnacle Stock at the time of the Initial Contribution on January 15, 2003 (January 15, 2003 Valuation). Northwest replied that Northwest does not manage Pinnacle. On April 25, 2003, Fiduciary Counselors provided to the Department the Independent Fiduciary Report on Contribution of Pinnacle Airlines Corp. Stock to the Northwest Airlines Pension Plan For Contract Employees dated March 16, 2003 (the IF Report), the January 15, 2003 Eclat valuation of Pinnacle (the January 15, 2003 Valuation), and an explanation of the valuation of the Put Option. Pension Plan Administration ALPA represents that it recognizes the need for Northwest to preserve liquidity so ALPA has agreed to modify the collective bargaining agreement and the Pilot Plan to permit the Pilot Plan to acquire and hold employer securities through a voluntary contribution to the Pilot Plan. documents in the last year, 84 Page 49 of 61. documents in the last year, 422 2578 Federal Register /Vol. 68, No. 12/Friday, January 17, Accordingly, Northwest notes that, consistent with the Omnibus Agreement's terms, the Additional Initial Contribution will be treated as a credit balance and be applied toward future contributions to the Contract Plan. (j) That the fair market value of the stock has been determined by way of a prudent investigation. As Pinnacle grows to 95 aircraft, the number of passengers and revenue will more than double. Northwest stated that it would not. northwest airlines pension Northwest sought the exemption to permit the Pinnacle Stock contribution as part of its overall strategy of managing the current economic uncertainty. In valuing Pinnacle Stock, the Independent Fiduciary specifically applied a 15% liquidity discount and a 5% discount to take into account that, for some period, the Plans would be a minority shareholder. The notice also invited interested persons to submit comments on the proposed exemption and/or to request that a public hearing be held. ?_QjcbCW DiY;Y(5!%.7C#/7w>IgW*.8t Northwest Airlines Pension Plan For Contract Employees Start Printed Page 49803Northwest stated [i]n the absence of an exemption, Northwest would have to consider the contribution of NWA Corp. stock or an IRS waiver. WebNORTHWEST AIRLINES INC. 2700 Lone Oak Pkwy. Northwest may not terminate Fiduciary Counselors as the Independent Fiduciary without the consent of ALPA and may not appoint a new Independent Fiduciary without the consent of ALPA. Northwest airlines founded 90 years ago DA.C from www.diecastaircraftforum.com. Pursuant to the terms of the Omnibus Agreement, Northwest contributed Pinnacle Stock to the Contract Plan. 04/28/2023, 204 Investigates Pension Fund at Northwest The Independent Fiduciary and its advisors also met with the senior officers of Pinnacle. Airline Employee's ERISA Claims Precluded by RLA In this regard, the Plans acquired Pinnacle Stock at a favorable price and the Plans obtained voting and management rights, anti-dilution rights, limits on Northwest's ability to terminate the ASA, rights to sell the Pinnacle Stock or dispose of it in an IPO in a variety of circumstances, and a protective Put Option. The IF Report explains that, because Pinnacle's operations are so entwined with Northwest's, Eclat evaluated Northwest as well as Pinnacle in its November 27, 2002 report to the PBGC (The Eclat Report). The voluntary contribution to the Pilot Plan will consist entirely of Pinnacle Stock. Northwest asserts that, while the Department has required collateral for some similar exemptions in the past, it has not required collateral in all cases. This, together with the reporting planned by Fiduciary Counselors, will permit ALPA to monitor the Independent Fiduciary. A decision to issue only additional Common Stock must be approved by a majority of the three directors elected by the holders of the Series C Preferred Stock. ]Vu"@eh_AZm*9? travel symbol copy and paste Director, Office of Exemption Determinations, Employee Benefits Security Administration, Department of Labor. Northwest Airlines Pension Northwest has entered into a 10-year ASA with Pinnacle through 2012 that provides substantial value. This document contains a final exemption issued by the Department of Labor (the Department) from certain prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 (ERISA or the Act) and from certain taxes imposed by the Internal Revenue Code of 1986 (the Code). 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. In accordance with section 408(a) of the Act and section 4975(c)(2) of the Code and the procedures set forth in 29 CFR Part 2570, Subpart B (55 FR 32836, 32847, August 10, 1990) and based upon the entire record, the Department finds that the exemption is: (b) In the interests of the plans and their participants and beneficiaries; and. Signed at Washington, DC this 14th day of August 2003. # A1430. Fiduciary Counselors, AIC and Eclat represent that the ASA between Northwest and Pinnacle provided the framework for the final valuation. See Omnibus Agreement at section 8.8. 2007) Annotate this Case U.S. Court of Appeals for the Ninth Circuit - 484 F.3d 1211 (9th Cir. 3. In addition, Delaware law would not restrict NWA Corp., a Delaware corporation, from repurchasing the Pinnacle Stock as the guarantor of the Put Option. In addition, the Independent Fiduciary will monitor on an ongoing basis the prudence of the Plans' continued holding of Pinnacle Stock consistent with the fiduciary standards of ERISA. Northwest Response: Northwest represents that it did not value Pinnacle Airlines for purposes of the Exemption Transactions. As previously mentioned in the March 3 Comment, the changes to the description of the Put Option in the Proposed Exemption are noted by the Independent Fiduciary who adds that the Proposed Exemption should be revised in accordance with the definition of Market Value in section 1.1 and the language of section 8.3 of the Omnibus Agreement. If, on August 1, 2003, NWA Corp. decides not to repurchase the Series C Preferred Stock, beginning on August 1, 2003 and on each succeeding quarter end date, NWA Corp. must use all Available Cash (a defined term in the Agreements) to effect partial repurchases of the Series C Preferred Stock, but only if and to the extent NWA Corp. is not prohibited from making such repurchases under applicable Delaware corporate law or any loan agreement to which NWA Corp. is a party. Webfunny ways to say home run grassroots elite basketball Menu . Current and former employees report that Northwest Airlines provides the following benefits. The allocation method made pursuant to the Letter Agreement will result in a modest change in the percentage of the Contract and Salaried Plans' assets invested in Pinnacle Stock compared to the ratable allocation contemplated by the Proposed Exemption. does steven weber have a brother; charlie bears lantern; My Cart. There will be no change in their personnel assigned to this engagement or in the manner in which the fees are split between the two organizations. Northwest has from 30 to 180 days to settle the option. Scheduling work rules, wages, it grew have calculated the payments based on his potential entitlement to temporary partial disability. documents in the last year, 1008 The Proposed Exemption was requested in an application filed on Start Printed Page 49793behalf of Northwest pursuant to section 408(a) of the Act and section 4975(c)(2) of the Code, and in accordance with the procedures set forth in 29 CFR part 2570, subpart B (55 FR 32836, August 10, 1990). Ms. DuVaney is a participant in the Conclude Plan, one defined benefit blueprint for unity members traditional by Far Airlines Corp. in 1970, covering every Northwest employees before Oct. 1, 2006. By permitting the contribution of Pinnacle Stock, Northwest is able to preserve needed cash so that it can withstand several years of losses. Fiduciary Counselors notes that there will be no change in its providing objective and independent investment management. (b) A statement that the appraiser is independent of Pinnacle and Northwest, and that the appraiser has no interest in the securities issued by Pinnacle or Northwest. win back retirement benefits lost in airline bankruptcies Northwest Airlines Pension The IF Report notes that the Independent Fiduciary drew upon the resources of its affiliate, Aon Investment Counseling, Inc. (AIC), to assist it in its financial analysis and valuation of the Pinnacle Stock. In response to the solicitation of comments from interested persons, the Department received over 1,700 letters, e-mails, faxes and phone calls, of which more than 1,000 requested that a public hearing be held on the Proposed Exemption. Delta Air Lines Must Face Lawsuit Over Pension Payments 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. 04-56719. northwest airlines pension Northwest guarantees the principal attributable to the investment in Pinnacle Stock. The director designated by the Plans will have the right to serve on Pinnacle's audit committee to the extent permitted under applicable SEC and stock exchange rules. (p) Any other factors necessary for a prudent determination of the market value of Pinnacle Stock. This is because a cash contribution is not a viable alternative given the company's liquidity needs. grassroots elite basketball ; why does ted lasso have a southern accent . ; Northwest Airlines Pension Plan for Contract 4. Pinnacle itself had revenues of approximately $345.2 million for 2002. WebPortuguese products available Online we mail to all lower 48 states. northwest airlines pension information. Based on the Eclat and AIC valuations, the Independent Fiduciary determined that the contribution of 1,938,000 shares of Pinnacle Stock should be valued at $43,821,894 as of January 15, 2003, the date the contribution occurred. The Plan is a defined benefit pension plan for the benefit of certain union-represented employees.

Dr Charlie Ward Who Is He, Tesla W2 Former Employee, Articles N