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  • The Directed Account Plan has a successor plan sponsor. It will continue to operate as a qualified retirement plan serving thousands of participants and their families just as it has for the last eight years. We will continue to operate with the same low cost structure, which has averaged less than one half of one percent per year. The 401(k) will still be terminated at some future date. 401(k) participants should transfer their assets to the DAP or rollover to an outside account now unless a 401(k) loan is outstanding.
  • Quarterly Statements-A reminder that quarterly statements have replaced the monthly statement that stopped with the March 2001 issue. This is the first of the Quarterly mailings. A special year-end statement summarizing the entire year will be added to the quarterly mailings. A statement on demand can always be obtained upon request from Benefits Express (1-877-4TWADAP (1-877-489-2327) or the Web Site at http://resources.hewitt.com/4twadap.
  • 401(k) Rollovers- Participants have started to elect to rollover or transfer their 401(k) balances in preparation for the 401(k) plan termination that we anticipate by the end of the year. The distributions to date reflect that over 75% of the pilots are electing to transfer their balances to the DAP, 5% to American Supersaver, and 20% to outside IRAs or cash outs. Some (around 50) pilots have elected to cash out and pay taxes and penalty on their balances. This strategy is usually not the best long-term plan. Consult a tax expert before requesting any cash distribution.
  • Loans- DAP and 401(k) loans are presently being repaid by TWA Airlines LLC payroll deduction for active pilots. DAP loans may be repaid by personal check once LLC is transitioned to American just as retirees repay now. DAP and 401(k) loans will default with any rollover or transfer. American SuperSaver has indicated that pilots may do a rollover that includes a loan balance but those procedures have not been finalized. Pilots who desire a rollover to Supersaver with a loan balance should delay the rollover until they are notified that they can do so without a loan default. As previously announced, rollovers of any DAP or 401(k) account with a loan outstanding will result in a loan default and the associated tax liability.

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