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This announcement is to update all DAP/401(k) participants on some upcoming changes.

The conclusion of the purchase agreement has raised a number of questions concerning the future of the DAP and the 401(k).


The DAP will continue to serve all 4500 participants including over 2200 retirees, their families and beneficiaries. We will be announcing a new plan sponsor within a few weeks. We are in the process of preparing a plan amendment for the IRS and getting agreements from all the concerned parties. The end result for participants should be no change in the DAP. Retirees in the DAP will not have to take any action. It should be business as usual. You may expect numerous outside solicitations for managing

your money, but nothing has changed in your Directed Account Plan. You do not have to move your money!

TWA LLC Active Pilots in the DAP will be able to stay in the plan with their existing assets. Ongoing, they will have the same options as a retiree. Active pilots could also rollover to an IRA or to the AA Supersaver, or take distributions (you should consult a tax advisor before taking a cash distribution since it could have significant tax consequences).

An active pilot could take no action and continue to manage their retirement assets within our DAP options until ready to access the funds at a later date. Staying in the DAP does not reduce anyone’s choices in the future.


Retirees/Actives in the 401(k) Plan should consider a rollover to the DAP. The 401(k) will eventually be terminated which will require action by all 401(k) participants. All 401(k) participants have the ability to roll out to an IRA of their choice including AA Supersaver for active pilots. Comparing plans for choice and flexibility, consideration should be given to a rollover to the DAP for all it’s investment option

choices, mutual fund window, brokerage option, account access, low cost, and the ability to make frequent transfers. Transfers to the DAP from the 401(k) can be initiated on the Web or through Benefits Express at 1-877-4TWADAP. Your money will move out of the 401(k) on the Friday of the week completed paperwork is received and move into the DAP on the same day. There will be an administrative delay of 7-10 days or more for transfers outside of our Plans.


Loans are no longer available from the DAP or the 401(k). If you have a loan outstanding from either Plan you will be able to continue to make payments on the loan as long as TWA LLC Payroll is available. Loans cannot be rolled over to another Plan or IRA. Loans will default upon any rollover, which will cause a 1099 form to be issued and create a tax liability for the participant. We are working with the TWA Credit Union to offer all DAP/401(k) participants with a plan loan balance a new loan from the credit union. This would enable the participant to avoid the tax liability of a default and keep the additional assets sheltered in the plan.


We are working on a plan that, subject to IRS approval, would allow other TWA employee groups to transfer from their soon-to-be terminated plans, to the DAP. That would increase the DAP asset base and could lower our already low costs. It would also provide an excellent retirement investment vehicle for hundreds of individuals who are going to find themselves faced with difficult investment decisions.

  • RETIREES- The DAP will continue for you with business as usual without any action on your part. If you have 401(k) assets, you should consider a rollover into the DAP now.
  • ACTIVE Pilots-Plan for a necessary movement of funds in the 401(k). Consider a rollover to the DAP. Consider remaining in the DAP with your existing assets.

Q What is the earliest date that we can roll the assets of our 401K

plan into the DAP, an IRA, or AA Supersaver?

Retirees can do this immediately. Active pilots have not had their status changed from active to terminated. That change will be made by May 1, 2001. Once the status is changed active pilots will be able to access their funds for rollover. Remember, one of the choices is to roll over the 401(k) to the DAP and to leave the DAP in place with the possibility to compound tax-deferred in a sheltered account. Refer to for “Forms Online”. Download “Distribution Forms” and fill them out to facilitate a rollover to the DAP, an IRA, or AA Supersaver.

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