I understand that our DAP will more than likely continue, but that at some time this year, our 401(k) Plan will terminate. I think that I understand our options with the assets held directly in these plans. What about assets held in the “Fidelity Funds Window”? Must these assets funnel back through the Hewitt held plans for an IRA transfer or can we do an “in kind” transfer to an IRA?
No “in kind” transfers will be available. There is no administrative procedure within our Plans to allow for in-kind transfers. Assets in the “Fidelity Funds Window” will have to come back to the “core” before further transfer is possible. For a DAP or 401(k) rollover, you must first request a 100% transfer of your Fidelity Funds Window to come back to the DAP and/or 401(k). This happens around the fifteenth of each month and takes about three business days. Once the assets are back in the “core”, a transfer or rollover is possible. That would happen on the Friday of the week your completed “distribution” paperwork is received by Benefits Express. You should request the Fidelity Funds to come back before you request the transfer or rollover.
In the AA SuperSaver packet we received, they specifically addressed the issue by stating “SuperSaver allows two outstanding loans per participant, including any loans rolled over from your TWA plan.” As you see, the positions are contradictory, so my question is “Why the difference?”.
Our Plans do not allow a rollover of loans into the Plans. This is an administrative restriction not a legal one. AA SuperSaver must be set up to accept loans in a rollover. We will be unable to accept loans in a 401(k) to DAP transfer. IRA’s cannot accept loans either. DAP manual loan repayments after TWA LLC goes away will be available for those who remain in the DAP.
Everybody knows the NAV (share price) of nearly all funds are down right now. If we rollover to an outside plan such as an IRA or AA SuperSaver, will not our shares in the affected account be sold at current prices and the current DOLLAR value, as opposed to the number of SHARES, be transferred? If so, this would “lock in the loss”.
Yes, any request to rollover would result in “cashing out”, that is, selling all existing shares and transferring the cash value of your shares to the outside plan.
If we elect to stay within our current plan, when the 401(k) is rolled into the DAP, will we transfer shares rather than dollars, hence taking a loss?
No, you would still be “cashing out” of the 401(k) Plan. The difference, if you use the DAP for your rollover, is in the time out of the market. Transferring your 401(k) to the DAP will happen on the Friday of the week your “Distribution” paperwork is received by Benefits Express. Your 401(k) shares are sold and immediately purchased into the DAP Stable Value Option. You can (on Monday) transfer your ex-401(k) assets from the Stable Value into the same DAP Options that you sold out of from the 401(k) on the previous Friday. You would be out of the market one day (on Monday following the Friday transfer).
This is quite an incentive to stay with the current plans, if true, at least until share prices recover.
No one knows what the market will do while you are in the process of a rollover.
Like many pilots, I have been putting 11% pre-tax into the pilot’s 401(k). What happens now? If 14.3% of former DAP money is now going into the AMR SS plan, and our 401(k) is no longer accepting new money, and in fact will have to be rolled over, will the 11% no longer be withheld from my pay or will it also be going into the AMR plan? Quite a number of fellow crew members are asking the same question and there seems to be no published answer. The plan summary from AMR is generic and doesn’t address the specific pilot concerns. Thank you.
Your future 401(k) pre-tax contributions will go to American SuperSaver in addition to the company’s 14.3%. This money will be withheld from your paycheck by TWA LLC payroll and sent to SuperSaver. You should have seen that on your April 25th check stub. Any changes to the level of contributions or investment choices for future contributions need to be completed with SuperSaver. You can, of course, still move your existing money around within our 401(k) until you transfer it.
If I want to roll my DAP/401(k) to the SuperSaver without the “tax-hit”… What do I write in the “check payable to”? What address do I put on the back of the form for a direct mail to supersaver?
You should check with SuperSaver for their procedures. There is no “tax-hit” with a proper rollover. Remember to consider any outstanding loans.
Is it possible to make a partial funds transfer to an IRA or SuperSaver, or is it going to be all or none?
A partial distribution is possible from the DAP.
If I wanted to transfer all of my DAP assets (except for what is in the “Fidelity Funds Window”, is that permissible?
Yes.
A more likely scenario is the possibility that I might want to transfer xxx dollars or xx percentage of my DAP and/or 401(k) assets. Is that permissible?
Only a 100% transfer or rollover of your 401(k) is possible. Partial distributions from your DAP are allowed.
If so, are dollars taken equally from each component of the DAP or can we specify where (i.e. which fund) they come from?
All distributions are taken out of your account pro rata (same percentage that is in the option). If this leaves you with an allocation different from desired, you will have to rebalance on the next day!