TWA, Inc. has notified the TWA Pilots DAP/401(k) Board of Directors that the 401(k) Plan will be terminated, as called for in the TWA/American Purchase Agreement, on October 31, 2001. This means that plan assets must be liquidated and distributed to plan participants by that date. Please read this communication carefully to find out how the termination will affect you.
You have a number of options depending on your status in the 401(k) plan. No action is required on your DAP account. The DAP is not affected by the 401(k) termination.
1) You have the option to transfer your 401(k) assets to the Directed Account Plan. The Directed Account Plan has been restructured to operate independent of TWA Inc., American Airlines, or ALPA. An independent Board of Directors consisting of two pilot participants of the DAP, two TWA Credit Union officers, and three independent directors has the fiduciary responsibility to operate the plan under ERISA, IRS, and DOL guidelines. The DAP has always been governed by a Board of Directors so there should be little change in the future DAP operations. The DAP will continue “business as usual” with the same low cost structure and flexible investment options.
2) You have the option to transfer your 401(k) assets to an IRA or other qualified plan such as Supersaver, if you are an active employee of the employer.
401(k) Fidelity Funds Window/Brokerage
If you have 401(k) assets with Fidelity, you must move those assets back to the core 401(k) prior to any rollover or transfer to the DAP. Call Benefits Express by September 14th to request a 100% transfer from the Fidelity Fund Window to the 401(k). A second call to Fidelity is necessary if you have assets in the Brokerage Option. Brokerage positions must be liquidated and the money moved to the Fidelity Money Market prior to the transfer back to the core 401(k).
The 401(k) will be terminated with all assets distributed by October 31, 2001.
Default Option
Participants who fail to make any election by October 19th, will have their balance including loan(s) moved to the DAP. Investments in the 401(k) will be moved to the same investment option in the DAP on October 29th.
Distribution forms for requesting a transfer or rollover are available from Benefits Express at 1-877-489-2327 or www.4twadap.com.
Summary
- Decide where you want to invest your 401(k) assets.
- Move your Fidelity Fund Window assets back to the 401(k) if applicable (recommend you request this by September 14th).
- Distribution requests are executed on the Friday of the week that the completed paperwork is received by Benefits Express. Checks are mailed from the trust by UPS to street addresses or Express Mail to PO Boxes on the following Thursday.
- No action on your part will result in defaulting your 401(k) balance to corresponding options in the DAP on October 29th.
- Distributions from the 401(k) since May have been approximately 65% to the DAP, 20% to outside IRAs, and 15% to Supersaver.
Note: Access to your 401(k) account via the Benefits Express Web Site will not be available after September 26, 2001.
Thank you for reviewing this important communication. No one anticipated a 401(k) plan termination, however all the same investment options at the same low cost remain available in the DAP.
Call me at (314) 739-7373 with any questions.
Joe Montanaro
Executive Director