Dear Fellow Pilot,

On Monday, June 19, 2006, Delta Air Lines delivered to the Pension Benefit Guaranty

Corporation (PBGC) a formal Notice of Intent to Terminate the Delta Pilots Retirement

Plan (Retirement Plan), our qualified defined benefit (DB) plan, effective September 2,

2006. Management has informed us that they also intend to terminate the nonqualified

Bridge and Supplemental DB plans shortly thereafter. Attached you will find

“Frequently Asked Questions on Plan Termination.” As we have told you, we expect the

Company to file in the Bankruptcy Court for approval to terminate our Retirement Plan,

as our plan is severely under-funded. The following are some pertinent statistics

regarding our qualified and nonqualified DB plans:

Estimated current liability: $4.1 Billion

Estimated assets: $1.6 Billion

Estimated current liability funded level: 39 percent ($1.6 Billion/$4.1 Billion)

Estimated additional funding required for ongoing plan:

Current Law: $1.6 Billion in the next 4 years plus future

annual funding requirements

Proposed 20-Year Relief: $165 Million per year for 20 years

Annual nonqualified payments

from Supplemental and Bridge plans: $80 Million per year increasing with time

Pilots eligible to retire 9/30/06: 1782

Potential lump sums payable on 9/30/06: approximately $900 Million

Required liquidity shortfall contribution

if half the eligible pilots retire: $900 Million-$1.2 Billion

Estimated PC-3 funded level: 80 percent

In November 2005, we stood before you and told you that the “stars must align” for our

Retirement Plan to survive. They have not. Our Retirement Plan is failing for several

reasons. First, since the fall of 2001 we entered a “perfect storm” of declining asset

values, low interest rates, and a large number of retirements. Also, ERISA, the law that

governs funding of qualified DB plans, prohibits companies from making tax-deductible

funding contributions when the plan is fully funded. Our Retirement Plan was over 140

percent funded as recently as 2000. ERISA also doesn’t require realistic funding

contribution levels during lean years. Prior to bankruptcy, Delta funded our Retirement

Plan at the minimum required by law. Our Retirement Plan has declined from that 140

percent funded level to just 39 percent funded in 6 years. Since entering bankruptcy last

September, approximately $109 million in required contributions to our Retirement Plan

have not been made. Finally, adequate legislation did not pass in a timely manner that

would allow Delta to amortize its large unfunded obligation over a more reasonable

period.

We still ask for your support of pension reform legislation, specifically for passage of the

Akaka language embodied in S1783, the Senate bill for pension reform legislation. The

Akaka amendment would apply the full PBGC age 65 guarantee to pilots who retire at

the FAA mandatory retirement age. This amendment would provide an increase of 54

percent compared to the current age 60 guarantee. Also, pension reform legislation is

essential for the survival of Delta’s non-contract pension plan, and for the plans at other

air carriers.

Letter of Agreement 51 addressed what would happen if our Retirement Plan terminated.

Our current targeted Defined Contribution Plan (DC Plan) matrix will revert to a flat 9

percent, with all pilots receiving Company contributions of 9 percent of their earnings to

their accounts as of the first contribution after Retirement Plan termination. LOA 51 also

requires that a $650 million Note be issued to the pilot group no later than 120 days after

bankruptcy exit.

We hope that you find the attached Frequently Asked Questions regarding pension plan

termination informative and useful. There is also a compilation of R&I information

receive updates on the distribution of your funds from the Money Purchase Pension Plan,

an updated retirement calculator added to our website, information on the newly

negotiated Roth 401(k) feature, and several other topics. We will also update this FAQ

as new information becomes available on the status of our Retirement Plan. If you have

any questions, please do not hesitate to contact us at 800-USA-ALPA, or e-mail our

Fraternally,

MEC R&I Committee

Captain Roger White

Captain Kevin Powell

pension plan maintained on behalf of Delta pilots and their eligible beneficiaries and

survivors. Assets of the Retirement Plan are held in the associated tax-exempt trust.

Important events concerning the Retirement Plan include the following:

that your Credited Service was frozen as of December 31, 2004, but your Final

Average Earnings (FAE) could still increase after that date.

your benefit will be fully frozen as of that date and your FAE will no longer be

allowed to increase after that date. (Your FAE will be the greater of your FAE on

December 31, 2004 or July 31, 2006, or if earlier, the date of your retirement or other

termination of employment.)

this date, known as the “Date of Plan Termination,” or “DOPT.”

The retirement program for pilots consists of seven retirement plans, including defined

benefit (DB) and defined contribution (DC) plans. The Retirement Plan is one of four

plans that, together, are designed to provide the Formula Benefit (see Q&A A3); there is

also a fifth plan for former Western pilots that may offset the benefits of the other DB

plans described below. You might participate in some but not all of these five

interrelated plans:

qualified DB plan:

retire may not exceed the “Annuity Benefit Limit” of Section 415(b) of the

Internal Revenue Code.

while you are still employed may not exceed the “Compensation Limit” of

Section 401(a)(17) of the Internal Revenue Code.

amounts that would exceed these limits.

2. Bridge Plan. The Bridge Plan is a nonqualified, unfunded DB plan, established in

1985 to provide retirement benefits to participants (and their eligible

beneficiaries and survivors) that cannot be provided under the qualified

Retirement Plan due to the Annuity Benefit Limit of Section 415(b) of the

Internal Revenue Code. Like the qualified Retirement Plan, the nonqualified

Bridge Plan was frozen in a soft freeze on December 31, 2004 and will be frozen

in a hard freeze on July 31, 2006.

The Annuity Benefit Limit restricts the amount of benefits that may be paid from

the qualified Retirement Plan each year during your retirement, in the form of a

single life annuity. The limit is adjusted actuarially for benefits paid in a form

other than a single life annuity (e.g., a 50 percent lump sum or a joint and 50

percent survivor annuity). As applied to Delta pilots, the Annuity Benefit Limit

may restrict benefits in the case of early retirement but does not restrict benefits

for most pilots retiring at or near age 60 (meaning that most pilots retiring at or

near age 60 are due no benefits under the Bridge Plan). Following are the most

recent Annuity Benefit Limits under Section 415(b), for captains and first

officers:

Plan Year beginning

July 1

415(b)

Annuity Benefit Limit

(retirement at age 60)

2006 $175,000

2005 $170,000

2004 $165,000

2003 $160,000

2002 $160,000

2001 $140,000

2000 $135,000

Appendix A sets forth the Section 415(b) Annuity Benefit Limits applicable to

benefits that begin at ages below age 60.

3. Supplemental Annuity Plan. The Supplemental Annuity Plan is a nonqualified,

unfunded DB plan, established July 1, 1996 to provide retirement benefits to

participants (and their eligible beneficiaries and survivors) that cannot be

provided under the qualified Retirement Plan due to the Compensation Limit of

Section 401(a)(17) of the Internal Revenue Code. Like the qualified Retirement

Plan and the nonqualified Bridge Plan, the nonqualified Supplemental Annuity

Plan was frozen in a soft freeze on December 31, 2004 and will be frozen in a

hard freeze on July 31, 2006.

The Compensation Limit restricts the amount of earnings that may be considered

under the (qualified) Retirement Plan each year during employment. The

Compensation Limit restricts benefits significantly for many pilots under the

frozen Retirement Plan, meaning that many pilots have earned benefits that

would be payable under the (nonqualified) Supplemental Annuity Plan.

Following are the most recent Compensation Limits:

Plan Year beginning

July 1

401(a)(17)

Annual Compensation Limit

2006 $220,000

2005 $210,000

2004 $205,000

2003 $200,000

2002 $200,000

2001 $170,000*

2000 $170,000*

*$200,000 for pilots still employed on 7-1-2002

4. Money Purchase Pension Plan (“MPPP”). The MPPP is a qualified DC pension

plan, pursuant to which individual accounts are maintained for pilots and their

eligible beneficiaries and survivors under the associated tax-exempt trust. The

MPPP was established effective July 1, 1996 and delivers through individual

accounts a portion of a pilot’s retirement benefits determined under the Formula

Benefit. The MPPP was funded solely with monthly Company contributions

equal to 5 percent of each pilot’s pay (up to the applicable Compensation Limit

each year) from July 1, 1996 through December 31, 2004. Pilots’ account

balances have continued to increase or decrease after December 31, 2004 based

on the MPPP’s investment performance. (Some participants also had accounts

prior to July 1, 1996 when this plan was known as the Delta Pilots Target Benefit

Plan. These accounts, to the extent they remain in the plan, were frozen in 1996,

subject to continued allocation of investment gain and loss.)

The monthly annuity equivalent of a pilot’s account under the MPPP offsets his

Formula Benefit. The offset is first made to the benefits that would be provided

by the nonqualified plans and then, if any MPPP benefit remains, to the benefits

that would be provided by the Retirement Plan. Pursuant to LOA 51, the MPPP

will be terminated June 30, 2006 and all of its assets will be distributed to

participants over the next few months. The monthly annuity equivalent of a

pilot’s MPPP account upon distribution, projected to the age the Retirement Plan

benefits begin, will still be used to offset his Formula Benefit in the same order

as originally provided (first offsetting nonqualified plan benefits, then Retirement

Plan benefits).

5. Western Pilots D-Plan (“Western D-Plan”). The Western D-Plan is a qualified

DB pension plan, established January 1, 1986 to provide retirement (and

survivor) benefits to former Western pilots (and their eligible beneficiaries and

survivors) based on their service prior to October 1, 1987. The Western D-Plan

was frozen effective October 1, 1987. In certain cases, a pilot’s benefit under the

Western D-Plan offsets a portion of his Formula Benefit.

Pilots also participate in two DC plans, the Delta Pilots Defined Contribution Plan and

the Delta Family Care Savings Plan, as follows, but accounts under these two plans do

not impact benefits payable under the other five plans:

1. Delta Pilots Defined Contribution Plan (“Pilots DC Plan”). The Pilots DC Plan is

a qualified DC pension plan. The Pilots DC Plan was established January 1,

2005 to provide additional retirement benefits after the soft freeze of the

Retirement Plan on December 31, 2004. The Company currently makes monthly

contributions to pilots’ accounts under the Pilots DC Plan, in accordance with the

contribution grid established pursuant to LOA 46. Pursuant to LOA 51, the

contribution grid will no longer apply after termination of the Retirement Plan; at

that time, Company contributions to the Pilots DC Plan will be uniform, at 9

percent of each pilot’s pay (up to the Compensation Limit).

2. Delta Family Care Savings Plan (“401(k) Plan”). This is a qualified DC plan that

includes the 401(k) program. The Company currently makes monthly

contributions of 2 percent of each pilot’s pay (up to the Compensation Limit).

Pilots are currently permitted to make both pre-tax and after-tax contributions,

subject to the limits set forth in the 401(k) Plan, and pursuant to LOA 51, will

soon be permitted to make such contributions to the maximum extent allowed by

law.

For each pilot, the Formula Benefit is the highest of the benefits determined under the

FAE Formula, the Delta Minimum Pension Formula and the Northeast Minimum Pension

Formula. In this FAQ, we will consider only the FAE Formula, since it is used to

determine the retirement benefits of most pilots still on the seniority list.

In general, under the FAE Formula, your Formula Benefit is an annual benefit (payable

monthly), commencing at normal retirement age (age 60), equal to:

2.4 percent x Your Years of Credited Service as of 12/31/2004 (25 year max) x Your

FAE

In general, your FAE is defined as the annual average of your earnings in the 36

consecutive calendar months during which your earnings were the highest, out of your

most recent 120 calendar months of employment. Your FAE is the higher of your FAE

determined on 12/31/2004 (the date of the Retirement Plan “soft freeze”) or your FAE

determined on 7/31/2006 (the date of the Retirement Plan “hard freeze”), or if earlier, the

date of your retirement or other termination of employment.

The benefit amount determined under the FAE Formula is subject to adjustment, as

follows:

which commencement of benefits precedes the pilot’s attainment of age 60)

the pilot

portion of the benefits payable under the federal Social Security program, prorated

for less than 25 years of Credited Service at 12/31/2004

for some former Western pilots

Retirement Survivor Benefit option after September 1, 2001 (and for QPRSB

coverage both before and after September 1, 2001, if applicable – see Q&A D17)

Qualified Domestic Relations Order (QDRO)

The Formula Benefit is intended to be provided through a combination of four plans (the

MPPP and three DB plans), as discussed in Q&A A2 above.

LOA 51 provides that ALPA will not oppose the Company’s termination of the

nonqualified Bridge Plan and nonqualified Supplemental Annuity Plan, if such

termination occurs after termination of the qualified Retirement Plan. In its NOIT, the

Company stated that it will terminate the nonqualified plans shortly after September 2,

2006. No benefits have been paid under these plans since the Company filed for

bankruptcy on September 14, 2005, and we believe no benefits will be paid after the

plans are terminated.

The Delta Pilots’ Pension Preservation Organization (DP3), an organization that

represents many retired Delta pilots, recently entered into a settlement agreement with

Delta and the unsecured Creditors Committee. The agreement, subject to bankruptcy

court approval, settles DP3’s litigation on behalf of retired pilots for unpaid benefits from

the nonqualified plans, for the period beginning September 14, 2005 and ending on the

date the nonqualified plans are terminated. It does so through a combination of

administrative and prepetition bankruptcy claims. DP3 has stated it intends to pursue a

claim for unpaid benefits from the nonqualified plans for periods after termination of the

nonqualified plans.

In its NOIT dated June 19, 2006, Delta informed participants that the Retirement Plan

will terminate in a “distress termination” on September 2, 2006, the DOPT. A voluntary

distress termination is the voluntary termination of a DB plan by the employer, where the

plan is underfunded, i.e., the plan’s assets cover less than 100 percent of the plan’s

liabilities.

The Company’s voluntary distress termination of the Retirement Plan as of September 2,

2006 is subject to approval by the bankruptcy court and the PBGC.

We expect the Company will soon file a motion in bankruptcy court requesting approval

of the Company’s voluntary distress termination of the Retirement Plan. In LOA 51,

ALPA agreed not to oppose such a motion.

Under the Employee Retirement Income Security Act (“ERISA”), the bankruptcy court

may approve the distress termination only if it determines that, unless the Retirement

Plan is terminated, the Company (and each member of the Company’s controlled group

of corporations) will be unable to pay all of its (and their) debts pursuant to a plan of

reorganization and will be unable to continue in business outside of Chapter 11. The

PBGC will approve the termination if it determines that these and other procedural

requirements have been satisfied.

It is also possible that the PBGC could institute proceedings to terminate the Retirement

Plan in an “involuntary termination.” An involuntary termination is the termination of a

DB plan by the PBGC (not by the employer), where the plan is underfunded. The PBGC

may institute the involuntary termination of a DB plan based on the occurrence of any

one of several alternative criteria. One of these criteria has already been met in the case

of the Retirement Plan, i.e., the Company’s failure to meet the applicable minimum

funding standards under ERISA.

The process is the same whether the Retirement Plan is terminated in a voluntary distress

termination or an involuntary termination. Soon after termination of the Retirement Plan,

the PBGC will take over both the assets and administration of the Retirement Plan. All

assets and liabilities of the Retirement Plan will be determined and valued as of DOPT.

The PBGC will pay benefits under the Retirement Plan, determined as of DOPT, based

on the value of the assets of the Retirement Plan, determined as of DOPT. (For this

purpose, the PBGC also considers as assets the value of the recoveries it expects to obtain

from Delta with respect to its claim in the bankruptcy court, excluding the determination

of funded benefits in Priority Category 3, discussed in Part C, below.) All determinations

are made “as of DOPT”. Any investment gains or losses on the assets, subsequent to

DOPT, inure to the benefit or detriment of the PBGC.

The PBGC insures and pays only the retirement and survivor benefits that have been

The PBGC does not insure, and will not pay, any benefits earned under the nonqualified

Bridge Plan or the nonqualified Supplemental Annuity Plan. If you have earned benefits

under the nonqualified plans, it is important to keep in mind that the PBGC will take into

determining the amount of benefits payable following termination, in accordance with the

rules discussed below.

Disability benefits for pilots are provided under the Delta Pilots Disability and

Survivorship Plan (D&S Plan), not under the Retirement Plan. Such disability benefits

will continue to be paid by the D&S Plan (not the PBGC).

ERISA requires the PBGC to assign all benefits and assets of the Retirement Plan among

six specified “Priority Categories." The PBGC determines benefits covered by each

Priority Category and allocates assets to each Priority Category in succession, beginning

with Priority Category 1 and ending with Priority Category 6. All of the assets are first

allocated to provide benefits covered by Priority Category 1; any remaining assets are

then allocated to provide benefits covered by Priority Category 2; any remaining assets

are then allocated to provide benefits covered by Priority Category 3, and so forth, until

all of the assets run out. In other words, the PBGC applies all of the assets of the

Retirement Plan to provide all of the benefits covered by one Priority Category before it

applies assets, if any remain, to provide benefits covered by the next Priority Category.

Category, which may be less than the participant’s total qualified accrued benefit (and, as

noted, does not include any nonqualified benefits).

The Retirement Plan has no benefit liabilities covered by Priority Categories 1 and 2.

Therefore, the PBGC will assign all of the assets of the Retirement Plan to provide

benefits covered by Priority Category 3. Assets are expected to provide only 80-85

percent of the benefits covered by Priority Category 3. The PBGC will allocate the assets

pro rata among all participants’ benefits covered by Priority Category 3. Because assets

will run out in Priority Category 3, no assets will remain for Priority Categories 4, 5 or 6.

Priority Category 1 (PC-1) – PC-1 covers that portion of each individual's accrued benefit

attributable to his own voluntary contributions to the Retirement Plan. There are no

benefits under the Retirement Plan attributable to voluntary contributions.

Priority Category 2 (PC-2) – PC-2 covers that portion of each individual's accrued benefit

attributable to his own mandatory contributions to the Retirement Plan. There are no

benefits under the Retirement Plan attributable to mandatory employee contributions.

Priority Category 3 (PC-3) – PC-3 covers benefits for:

(a) each participant (and survivor) whose retirement (or survivor) benefit was in

pay status at least three years prior to DOPT, and

(b) each participant (and survivor) whose retirement (or survivor) benefit could

have been in pay status at least three years prior to DOPT.

Benefits described in (a) or (b) have equal priority.

Applying these rules to the Retirement Plan, PC-3 would cover the benefits of all active

and retired pilots who are age 53 or older on September 2, 2006, since such persons either

had retired or could have retired by September 2, 2003. PC-3 would also cover the

benefits of all survivors in pay status on September 2, 2003 (as well as the survivors of

pilots who died since September 2, 2003 if the pilot was at least age 50 on September 2,

2003).

The amount of the benefit covered by PC-3 is either the amount in pay status on

September 2, 2003 or the amount that would have been in pay status on September 2,

2003 had the participant retired on September 2, 2003, based on his Credited Service,

FAE, MPPP balance and age at that time. For a participant who was younger than age 60

on September 2, 2003, the benefit determined as of September 2, 2003 would be subject

to the Retirement Plan's early retirement reduction for benefits commencing prior to age

60. The Retirement Plan provides a reduction of 3 percent per year (.25 percent per

month) for pilots retiring prior to age 60.

Benefits covered under PC-3 are based on the Retirement Plan's provisions in effect five

years prior to DOPT, i.e. September 2, 2001. Any benefit increase that has occurred

since September 2, 2001 would be ignored in the calculation of PC-3 benefits (see Q&A

C6 below).

Since there are no benefits covered under PC-1 or PC-2, and the assets are not sufficient

provide benefits covered under PC-3. For purposes of this FAQ, we have assumed that

assets of the Retirement Plan will be sufficient to cover only 80 percent of the benefits

covered by PC-3. If that assumption is correct, then the PBGC will provide only 80

percent of each individual’s benefit covered by PC-3. This funded PC-3 benefit

guaranteed by the PBGC is a fixed amount. If you are currently active or you retired

after September 2, 2003, the PC-3 benefit amount is not dependent on your age when you

begin receiving benefits.

Once the Retirement Plan terminates, the PBGC will assert an unsecured claim in the

bankruptcy court for the Retirement Plan’s unfunded benefits. The PBGC must share

with participants a portion of whatever recoveries it obtains from Delta on its claim.

Such recoveries may allow the PBGC to increase the percentage of your PC-3 benefits to

be paid.

Priority Category 4 (PC-4) – PC-4 covers the benefits that are guaranteed by the PBGC,

the PBGC guarantees payment of a participant's accrued benefit, up to a maximum

amount of $47,659.08 per year at age 65 (including all benefits payable under PC-1

through PC-4). The PBGC schedule in effect when a pension plan actually terminates is

the schedule used to determine the guarantee amounts that apply to participants of a

terminated plan. Any future increases to the PBGC guarantee amounts will not apply to

participants of a plan that has already terminated.

The PBGC guarantee amount is phased-in for benefit increases that have not been in

effect for five full years prior to DOPT. For benefit increases first effective during the

five years prior to DOPT, the PBGC guarantee amount is phased-in, at 20 percent per

year (or if greater, up to $20 in monthly benefit per year), beginning on the effective date

of the plan amendment that increased benefits. For example, a benefit increase first

effective three years before DOPT would be 60 percent phased-in at DOPT.

The PBGC guarantee applies to a participant's benefits under the plan without regard to

when the participant is (or was) eligible to retire. The maximum guarantee amount

commencement date or DOPT. The PBGC guarantee for a retired pilot who has already

commenced his benefits would be based on the retired pilot's age as of DOPT, using the

PBGC schedule in effect on plan termination. The PBGC guarantee for an active pilot

would be based on his age as of the date he actually retires and commences his

Retirement Plan benefit, using the PBGC schedule in effect on DOPT. This amount is

increased for participants who are older than age 65 and decreased for participants who

are younger than age 65.

The maximum PBGC guarantee amount that applies at any given age is based on a

benefit payable in the form of a single life annuity. The guarantee amount is adjusted for

benefits payable in a form other than a single life annuity (e.g., a joint and 50 percent

survivor annuity).

Appendix B sets forth the PBGC schedule of guaranteed benefits, for ages 50 through 70,

for plans terminating in 2006.

Priority Category 5 (PC-5) – PC-5 covers all other vested benefits under the Retirement

Plan. Since assets of the Retirement Plan run out in PC-3, the PBGC will pay no benefits

covered by PC-5.

Priority Category 6 (PC-6) – PC-6 covers all other benefits under the Retirement Plan.

Since assets of the Retirement Plan run out in PC-3, the PBGC will pay no benefits

covered by PC-6.

for your MPPP account. The actuarial equivalent of your MPPP account is first applied

to offset your nonqualified benefits under the Bridge Plan and the Supplemental Annuity

Plan, and then, if any portion of your MPPP account remains, it is applied to offset your

under the Retirement Plan after this offset as your qualified accrued benefit for purposes

of allocation among the Priority Categories.

In general, the PBGC will pay the following, assuming that our Retirement Plan

terminates September 2, 2006, that the funded percentage of PC-3 is 80 percent, and that

the PBGC does not treat post-retirement increases in the Annuity Benefit Limit as

increases pursuant to plan provisions that have not been in effect for five years as of

DOPT for purposes of PC-3:

(a) Pilots who retired before September 2, 2001 — Greater of (1) or (2) below:

(1) Approximately 80 percent of the qualified benefit the pilot was receiving

as of September 2, 2003 (PC-3 benefit), or

(2) 100 percent of the qualified benefit the pilot is receiving immediately

before September 2, 2006, up to the maximum PBGC guarantee amount

(PC-4 benefit, per Appendix B)

(b) Pilots who retired on or after September 2, 2001 but before September 2, 2003 —

Greater of (1) or (2) below:

(1) Approximately 80 percent of the qualified benefit the pilot was receiving

as of September 2, 2003, adjusted to eliminate all benefit increases under

the Retirement Plan since September 2, 2001 (PC-3 benefit), or

(2) 100 percent of the qualified benefit the pilot is receiving immediately

before September 2, 2006, adjusted to phase-in any benefit increases

under the Retirement Plan since September 2, 2001, up to the maximum

PBGC guarantee amount (PC-4 benefit, per Appendix B)

Note: In the case of a retired pilot who received the 50 percent lump sum, the

benefit payable by the PBGC will be subject to adjustment as described in Q&A

C8.

(c) Active pilots age 53 or older on September 2, 2006, and retired pilots age 53 or

older on September 2, 2006 who retired on or after September 2, 2003 — Greater

of (1) or (2) below:

(1) Approximately 80 percent of the qualified early retirement benefit the

pilot would have been entitled to receive if he had retired September 2,

2003, adjusted to eliminate all benefit increases under the Retirement

Plan since September 2, 2001 (PC-3 benefit), or

(2) 100 percent of the qualified benefit the pilot is entitled to receive under

the Retirement Plan as of September 2, 2006, adjusted to phase-in any

benefit increases under the Retirement Plan since September 2, 2001, up

to the maximum PBGC guarantee amount (PC-4 benefit, per Appendix

B)

Note: In the case of a retired pilot who received the 50 percent lump sum, the

benefit payable by the PBGC will be subject to adjustment as described in Q&A

C8.

(d) Active pilots under age 53 on September 2, 2006 — Lesser of (1) or (2) below:

(1) 100 percent of the qualified benefit the pilot is entitled to receive under

the Retirement Plan as of September 2, 2006, adjusted to phase-in any

benefit increases adopted under the Retirement Plan since September 2,

2001, or

(2) The maximum PBGC guarantee amount (PC-4 benefit, per Appendix B)

The actuary for the Retirement Plan has identified several benefit increases under the

Retirement Plan since September 2, 2001. ALPA is presently analyzing how these

increases must be treated for purposes of determining benefits under PC-3 and phase-in

of the PBGC guarantee amount under PC-4. As of this date, no final determinations have

been made by the PBGC. Following are the most significant benefit increases since

September 2, 2001, as well as the Retirement Plan actuary’s view of how they should be

treated:

under Section 401(a)(17) of the Internal Revenue Code have increased since

September 2, 2001. (See the tables in Q&A A2 contained in the discussions of the

nonqualified Bridge Plan and nonqualified Supplemental Annuity Plan.) The actuary

for the Retirement Plan believes that, for purposes of PC-3, the Annuity Benefit

Limit in place on September 2, 2003 (without regard to the increase due to the

Economic Growth and Tax Relief Reconciliation Act of 2001), and the

Compensation Limit in place on September 2, 2001, will apply, and that for purposes

of PC-4, the increases in both of the limits since September 2, 2001 will be phasedin.

variable annuity, variable increases have occurred since September 2, 2001, although

the variable benefit unit actually decreased from April 1, 2001 through April 1, 2004.

The actuary for the Retirement Plan believes that, for purposes of PC-3, the variable

benefit in pay status on April 1, 2004 will apply (because it is lower than the benefit

in pay status on September 2, 2001), and that for purposes of PC-4, 20 percent of the

variable increase of April 1, 2005 will be phased-in and 0 percent of the variable

increase of April 1, 2006 will be phased-in.

Example 1: Assume that on DOPT a retired pilot is age 67, has been retired for seven

years and has an accrued benefit of $7,000 per month under the Retirement Plan. Since

this pilot has been retired for more than three years at DOPT, the benefit he is currently

receiving would generally be the benefit that was in pay status three years prior to DOPT.

In that case, the PC-3 benefit would be $7,000.

Therefore, if assets were sufficient to cover 100 percent of the benefits in PC-3, the

benefit payable for this pilot under PC-3 would be $7,000 per month.

If assets are sufficient to cover only 80 percent of PC-3 benefits, the benefit payable for

this pilot under PC-3 would be $5,600 ($7,000 times 80 percent) per month.

Example 2: Assume that on DOPT a retired pilot is age 61, has been retired for one year

and that his monthly FAE was $12,000. Assume also that he had completed 25 years of

Credited Service precisely on 12/31/2004. His benefit under the Retirement Plan is

$7,200 per month.

In calculating the pilot’s PC-3 benefit, we need to determine what benefit he would have

received if he had retired on September 2, 2003, three years prior to the DOPT, when he

would have been age 58. Since Credited Service was frozen at 12/31/2004 and he had

completed 25 years of Credited Service precisely on that date, he would have had

approximately 23-2/3 years of Credited Service on September 2, 2003. Since the pilot

was then only 58 years old, he would have been subject to an early retirement reduction

of 6 percent (3 percent per year for each of the 2 years prior to age 60). Assuming that

the pilot’s monthly FAE as of September 2, 2003 was also $12,000, his PC-3 benefit

would be approximately $6,407 [2.4 percent times 23-2/3 years times $12,000 times (1 –

6 percent)]. If his FAE was lower as of September 2, 2003, the PC-3 benefit would be

lower.

Therefore, if assets were sufficient to cover 100 percent of the benefits in PC-3, the

benefit payable for this pilot under PC-3 would be $6,407 per month.

If assets are sufficient to cover only 80 percent of PC-3 benefits, the benefit payable for

this pilot under PC-3 would be $5,126 ($6,407 times 80 percent) per month.

Example 3: Assume that on DOPT an active pilot is age 57 and that his monthly FAE is

$10,000. Assume also that he had completed 25 years of Credited Service precisely on

12/31/2004. This pilot has an accrued benefit under the Retirement Plan of $6,000 per

month, payable at age 60.

In calculating the pilot’s PC-3 benefit, we need to determine what benefit he would have

received if he had retired on September 2, 2003, three years prior to the DOPT, when he

would have been age 54. Since Credited Service was frozen at 12/31/2004 and he had

completed 25 years of Credited Service precisely on that date, he would have had

approximately 23-2/3 years of Credited Service on September 2, 2003. Since the pilot

was then only 54 years old, he would have been subject to an early retirement reduction

of 18 percent (3 percent per year for each of the 6 years prior to age 60). Assuming that

the pilot’s monthly FAE as of September 2, 2003 was also $10,000, his PC-3 benefit

would be approximately $4,658 [2.4 percent times 23-2/3 years times $10,000 times (1 –

18 percent)]. If his FAE was lower as of September 2, 2003, the PC-3 benefit would be

lower.

Therefore, if assets were sufficient to cover 100 percent of the benefits in PC-3, the

benefit payable for this pilot under PC-3 would be $4,658 per month, payable at such

time that the pilot actually retires and commences his benefit, regardless of age at that

time.

If assets are sufficient to cover only 80 percent of PC-3 benefits, the benefit payable for

this pilot under PC-3 would be $3,726 ($4,658 times 80 percent) per month, payable at

such time that the pilot actually retires and commences his benefit, regardless of his age

at that time.

Note that the pilot’s actual age when benefits commence does not impact the PC-3

guarantee amount.

Example 1: Assume a retired pilot is age 67 on DOPT, has been retired for seven years

and has an accrued benefit of $5,000 per month under the Retirement Plan. Since this

pilot has been retired for more than three years at DOPT, the benefit he is currently

receiving would generally be the benefit that was in pay status three years prior to DOPT.

In that case, the PC-3 benefit would be $5,000.

Therefore, if the assets were sufficient to cover 100 percent of the benefits in PC-3, the

benefit payable for this pilot under PC-3 would be $5,000 per month. So his entire

benefit would be payable under PC-3.

However, if assets are sufficient to cover only 80 percent of PC-3 benefits, the benefit

payable for this pilot under PC-3 would be $4,000 ($5,000 times 80 percent) per month.

But the PBGC dollar guarantee for a 67 year-old is $4,805.62 per month. If the funded

PC-3 benefit is only $4,000 per month, this pilot would also be entitled to a benefit in the

amount of $805.62 per month from PC-4 to bring his total PBGC guarantee up to the

$4,805.62 per month level. Under legislation proposed by Senator Akaka (discussed

below in Part E), the age 67 PBGC dollar guarantee would be $7,393.27, and this pilot

would be entitled to a benefit in the amount of $1,000 per month from PC-4 to bring his

total PBGC guarantee up to his $5,000 per month accrued benefit level.

Example 2: Assume an active pilot age 44 with 20 years of Credited Service has an

accrued benefit at DOPT of $6,500 per month, payable at age 60. Because this pilot was

not eligible to retire three years prior to DOPT, he does not receive any benefit in PC-3.

If he retires at age 60, his benefit under the Retirement Plan will be $2,581.53 per month

($3,971.59 under the legislation proposed by Senator Akaka), which is the PBGC dollar

guarantee for a participant commencing benefits at age 60. If he retires at another age,

his benefit will be based on the PBGC dollar guarantee for that age.

The maximum PBGC guarantee amount will be reduced (but not below zero) by the

amount of annuity the pilot “gave up” by electing to receive the lump sum.

If the pilot retired before September 2, 2001, his initial PC-3 benefit (prior to applying

the PC-3 funded percentage) will be the benefit he was receiving as of September 2,

2003, i.e. the net benefit remaining after the lump sum was paid out. (Note: We have

ignored the possibility that the PBGC may treat post-retirement increases in benefits due

to increases in the Annuity Benefit Limit after September 2, 2001 as increases pursuant to

plan provisions that have not been in effect for five years as of DOPT.)

If the pilot retired on or after September 2, 2001 and is covered by PC-3, the PBGC will

reduce his initial PC-3 benefit (prior to applying the PC-3 funded percentage) to take into

account the lump sum payment he received. The PC-3 benefit will be determined by

calculating the qualified benefit the pilot would have received if he had retired on

September 2, 2003 (adjusted to eliminate all benefit increases adopted under the

Retirement Plan since September 2, 2001 and ignoring the fact that when he actually

retired he elected the lump sum). That amount will then be reduced by the amount of

annuity he “gave up” by electing to receive the lump sum. The PC-3 funded percentage

will be applied to that reduced benefit.

If the pilot retired on or after September 2, 2003 and is not covered by PC-3, the PBGC

will reduce his PC-4 guarantee amount (per Appendix B) by the amount of annuity he

“gave up” by electing to receive the lump sum.

Example 1: Assume that on DOPT a retired pilot is age 67, has been retired for seven

years and has an accrued benefit of $7,000 per month under the Retirement Plan. If he

elected to receive the 50 percent lump sum at retirement, he would currently be receiving

a benefit of $3,500 per month. In this case, the PC-3 benefit would be $3,500.

Therefore, if assets were sufficient to cover 100 percent of the benefits in PC-3, the

benefit payable for this pilot under PC-3 would be $3,500 per month because the lump

sum would be ignored.

If assets are sufficient to cover only 80 percent of PC-3 benefits, the benefit payable for

this pilot under PC-3 would be $2,800 ($3,500 times 80 percent) per month.

The PBGC also reduces the pilot’s PC-4 guarantee by the annuity he “gave up” by

receiving the lump sum. The PC-4 guarantee at age 67 is $4,805.62 per month. Now we

need to subtract the $3,500 annuity he “gave up” by receiving the 50 percent lump sum.

The result is a net PC-4 guarantee of $1,305.62 ($4,805.62 minus $3,500) after adjusting

for the lump sum he received. If the funded portion of his PC-3 benefit was less than

$1,305.62, he would receive additional benefits from PC-4 to bring the total up to the

$1,305.62 PBGC guarantee for PC-4. If PC-3 is 80 percent funded, his funded PC-3

benefit of $2,800 would exceed the PC-4 guarantee of $1,305.62, and therefore, he would

receive $0 under PC-4.

Example 2: Assume that on DOPT a retired pilot is age 61, has been retired for one year

on DOPT, and that his monthly FAE was $12,000. Assume also that he had completed

25 years of Credited Service precisely on 12/31/2004. His benefit under the Retirement

Plan is $7,200 per month. If he elected to receive the 50 percent lump sum at retirement,

he would currently be receiving a benefit of $3,600 per month.

To calculate his PC-3 benefit we need to determine the initial PC-3 amount as if he had

not received a lump sum payment, and then reduce it by the amount of annuity he “gave

up” by electing the lump sum. In calculating the pilot’s initial PC-3 benefit, we need to

determine what benefit he would have received if he had retired on September 2, 2003,

three years prior to the DOPT, when he would have been age 58. Since Credited Service

was frozen at 12/31/2004 and he had completed 25 years of Credited Service precisely on

that date, he would have had approximately 23-2/3 years of Credited Service on

September 2, 2003. Since the pilot was then only 58 years old, he would have been

subject to an early retirement reduction of 6 percent (3 percent per year for each of the 2

years prior to age 60). Assuming that the pilot’s monthly FAE as of September 2, 2003

was also $12,000, his PC-3 benefit would be approximately $6,407 [2.4 percent times 23-

2/3 years times $12,000 times (1 – 6 percent)]. If his FAE was lower at that time, the PC-

3 benefit would be lower. Now we need to subtract the $3,600 annuity he “gave up” by

receiving the 50 percent lump sum. The result is a net PC-3 benefit of $2,807 ($6,407

minus $3,600) after adjusting for the lump sum he received.

Therefore, if assets were sufficient to cover 100 percent of the benefits in PC-3, the

benefit payable for this pilot under PC-3 would be $2,807 per month.

If assets are sufficient to cover only 80 percent of PC-3 benefits, the benefit payable for

this pilot under PC-3 would be $2,246 ($2,807 times 80 percent) per month.

The pilot’s PC-4 guarantee is also reduced by the annuity he “gave up” by receiving the

lump sum. The PC-4 guarantee at age 61 is $2,859.54 per month. Now we need to

subtract the $3,600 annuity he “gave up” by receiving the 50 percent lump sum. The

result is a net PC-4 guarantee of $0 ($2,859.54 minus $3,600, but not less than zero) after

adjusting for the lump sum he received. In this case, the pilot will only receive a PBGC

guarantee based on the funded portion of his PC-3 benefit.

Example 3: Assume that on DOPT a retired pilot is age 52 and has been retired for one

year. Because he is under age 53 on DOPT, he is not covered by PC-3. Assume his

benefit under the Retirement Plan is $4,800 per month. If he elected to receive the 50

percent lump sum at retirement, he would currently be receiving a benefit of $2,400 per

month. The PC-4 guarantee at age 52 is $1,548.92 per month. Subtracting the $2,400

annuity he “gave up” by receiving the 50 percent lump sum, the result is a net PC-4

guarantee of $0 ($1,548.92 minus $2,400, but not less than zero) after adjusting for the

lump sum he received. In this case, the pilot will be entitled to receive no further benefits

after DOPT.

No. A pilot's level of Priority Category is not affected by whether the pilot retires before

or after DOPT. When a plan is terminated in a distress termination, the plan's assets will

be allocated among (and in the order of) the six Priority Categories discussed above.

Under these Priority Categories, a retired participant has no higher claim on the assets

than does an active participant. Furthermore, for purposes of PC-3, where all of the

Retirement Plan’s assets will be allocated, a participant's level of priority would be

If a participant is already retired and receiving benefits on DOPT, the PBGC will

continue the form in which the benefits are being paid after DOPT, and the participant

cannot change that form. However, we have been advised that, in the case of pilots who

have retired since October 1, 2005 and who elected but have not received a lump sum due

to the liquidity shortfall, the PBGC will allow a new election for the value of the

remaining unpaid lump sum.

For benefits not already in pay status as of DOPT, the PBGC makes distributions

available in the following forms: single life annuity; joint and 50 percent, 75 percent or

100 percent survivor annuity; 5-, 10-, or 15-year certain-and-continuous annuity; and

joint and 50 percent survivor "pop-up" annuity (in which case, if the designated

beneficiary dies first, the participant's benefit "pops up" to the level that would have been

paid in the form of a single life annuity).

The PBGC does not pay benefits in the form of a lump sum or partial lump sum (other

than for very small lump sums). In fact, the Retirement Plan may not pay lumps sums or

partial lump sums after June 19, 2006, the date the Company issued the Notice of Intent

to Terminate. This means that no lump sum payments can be made after June 19, 2006,

even if the Retirement Plan were to come out of liquidity shortfall.

No, with the following exception. Under LOA 51, the Company contributions to the

Pilots DC Plan will be a flat 9 percent of earnings for all pilots, rather than the

percentages from the contribution grid in LOA 46.

In accordance with the provisions of the Retirement Plan, once you reach age 50, you

may start your benefit after you retire or otherwise terminate your employment with

Delta. Age 50 is the earliest date at which you are eligible to begin receiving benefits

under our Retirement Plan.

No; there are no cost-of-living adjustments. We also believe that the PBGC will not pay

any variable increases for pilots receiving variable benefits from the Retirement Plan.

During the transition, the plan administrator must continue to carry out the normal

operations of the Retirement Plan, such as processing retirement applications and paying

benefits. However, pursuant to PBGC guidelines, the plan administrator must reduce

benefits to the levels estimated to be payable under the PBGC’s Priority Categories. The

purpose of these guidelines is to reduce the possibility of overpayments that the PBGC

would seek to recoup later (see Q&A D6 below).

The PBGC's benefit determination process is a two-step process. Based on its initial

analysis of the Retirement Plan's assets and liabilities as of DOPT, the PBGC will

initially adjust benefits to retired pilots and to pilots as they retire in the future, as

necessary, to pay PBGC-determined "estimated benefits." Then, following a period of

time during which the PBGC will conduct a complete analysis of the Retirement Plan’s

assets, liabilities and recoveries, the PBGC will make a final benefit determination for

each participant. The PBGC's stated goal is to get the final benefit determinations

completed within three years after DOPT. The PBGC will notify each participant of its

final benefit determination, and will provide the opportunity for each participant to

appeal this final benefit determination within the 45-day period following such notice.

If the participant has been underpaid since DOPT based on the PBGC’s final benefit

determination, then the PBGC will pay the participant the amount of such shortfall in a

lump sum payment with interest following the final benefit determination. If the

participant has been overpaid since DOPT, the PBGC may recoup the overpayment,

allowing the participant to repay the excess amount without interest. Repayments may be

made in a lump sum, or by having future monthly benefit checks reduced until the

overpayment has been repaid, or by making repayments in installments if there are no

future monthly benefit payments from which deductions may be made.

The PBGC has no authority to recover from a participant any benefit payments made

from the Retirement Plan before September 2, 2003, but does have the authority to

“recapture” a portion of benefit payments made after September 2, 2003. In general, the

amount the PBGC may recapture is equal to the total of benefit payments made to the

participant during the three-year period beginning September 2, 2003, minus the sum of

(a) the amount that would have been paid in the form of a single life annuity during such

period plus (b) the amount equal to the present value of his future benefits payable by the

PBGC after DOPT. Although it has this authority, we understand (based on past

experience) that the PBGC would not likely seek to recapture any portion of the partial

lump sum payments that have been made to retired participants after September 2, 2003,

since the lump sum payments were not being made in anticipation of the Retirement Plan

terminating but rather were made in the ordinary course of plan administration.

No. No reduction will be made to your Social Security benefits, whether your Retirement

Plan benefits are paid by the Retirement Plan or by the PBGC. Although your net

Retirement Plan benefit is calculated after application of the offset attributable to your

Social Security benefits (maximum of $259/month at age 62), this reduction has no

impact whatsoever on the actual amount of your Social Security benefits.

No. There is no relationship between your Retirement Plan benefits and your military

retirement benefits.

The PBGC guarantees for ages between full years are pro-rated to the nearest full month,

using straight line interpolation. For example, using the 2006 PBGC schedule, the PBGC

guarantee for age 61 and 6 months would be $2,998.55 per month (which is halfway

between the $2,859.54 guarantee for age 61 and the $3,137.56 guarantee for age 62).

No. If your benefit covered by PC-4 is less than the PBGC guarantee amount for your

age and payment form, this simply means that your benefit covered by PC-4 would be

fully insured by the PBGC. In this situation, you would receive your full benefit covered

by PC-4 at the time you actually retire.

Yes. Your $2,000 normal retirement benefit payable at age 60 would be fully insured by

the PBGC, since it is lower than the maximum PBGC guarantee of $2,581.53 at age 60.

If, however, you retire early and commence your benefit prior to age 60, your benefit

would be calculated with the early retirement reduction of 3 percent/year (.25

percent/month). Such reduced benefit would be protected up to the PBGC guarantee

applicable to your age when you commence your benefit. The earliest date you may

commence your benefit is age 50. If you retired and commenced receiving your benefit

at age 50, your calculated benefit would be $1,400/month ($2,000 x 70 percent), but you

would receive only $1,390.06/month, the PBGC guarantee amount at age 50.

The PBGC guarantee amounts are all expressed in the form of a single life annuity. The

guarantee amounts must be converted to actuarial equivalent amounts for benefits paid in

other forms. The dollar amount of the guarantee will be lower for benefits paid in the

form of either a joint and 50 percent survivor annuity or a joint and 50 percent contingent

annuity, and will be determined by the PBGC using applicable actuarial assumptions.

No. The Retirement Plan requires that a participant retire or otherwise terminate

employment with Delta in order to begin receiving benefits. The earliest retirement age

under the Retirement Plan is age 50. A participant who terminated employment prior to

age 50 may commence benefits only on or after attaining age 50.

Yes, as is currently allowed by the Retirement Plan.

If a married pilot dies before commencing his Retirement Plan benefit, his surviving

spouse is entitled to receive the Qualified Pre-Retirement Survivor Benefit (QPRSB).

The QPRSB is a monthly benefit payable to the pilot’s surviving spouse's equal to 50

percent of the amount the pilot would have received, assuming he had retired on the day

before his death (or if he was under age 50, assuming that he had survived to age 50 and

then retired), and elected to receive his benefit in the form of a joint and 50 percent

survivor annuity. If the pilot was not yet age 50 when he died, the surviving spouse’s

benefit may begin when the pilot would have attained age 50. The PBGC will continue

to provide the QPRSB to surviving spouses, whether the pilot’s death is before or after

the DOPT.

If a single pilot dies before commencing his Retirement Plan benefit, no survivor benefits

are payable under the Retirement Plan.

If a married pilot or single pilot dies after commencing his Retirement Plan benefit,

benefits will be payable to the pilot’s survivors only if survivor benefits are provided

under the form of benefit the pilot elected.

Generally, no, since QPRSB charges no longer apply to the benefits of pilots still on the

seniority list. However, if a participant has a benefit that was subject to QPRSB charges

under the terms of the Retirement Plan applicable to that participant, then the PBGC will

apply those charges.

We do not know whether the PBGC will continue to allow pilots the option to be covered

for this benefit. If the PBGC does allow continued coverage, we expect charges would

be applied for such coverage in a manner similar to the way the Retirement Plan currently

charges for such coverage. Charges are made by applying an appropriate reduction to

benefits when they become payable.

The same rules apply whether the survivor's benefit is paid as a result of the pilot's death

before retirement or after retirement. If the survivor benefit has been in pay status for

three years as of DOPT, then the survivor benefit will be covered by PC-3. Assuming

PC-3 is 80 percent funded, then only 80 percent of the survivor benefit will be paid under

PC-3.

If the survivor benefit has been in pay status for less than three years as of DOPT (i.e.,

the participant died after September 2, 2003), then the survivor benefit will be in PC-3

only if the participant's retirement benefit would have been in PC-3. That is, the

survivor's benefit will be in PC-3 if the participant was at least age 50 by September 2,

2003. If so, then for purposes of determining the amount of the survivor's benefit

covered by PC-3, the participant will be deemed to have died on September 1, 2003.

Survivor benefits are also payable under PC-4, up to the maximum PBGC guarantee

amount (per Appendix B).

Together, the pilot and the alternate payee under the QDRO share the PBGC guarantee

amount that would have applied to only the pilot had there been no QDRO.

Yes. Your benefits under the Retirement Plan are taxable whether they are paid directly

from the Retirement Plan or by the PBGC.

After the transition of the Retirement Plan to the PBGC, we expect, based on prior

experience, that retirees covered under the Delta medical and dental plans will be billed

directly by Delta or its agent.

Yes.

Termination of the Retirement Plan does not affect benefits payable under the Western

D-Plan. If the Western D-Plan is later terminated in a distress or involuntary termination

in which PC-4 is not fully funded by Western D-Plan assets, then participants in the

Western D-Plan will be subject to the PBGC guarantee amount aggregation rules

discussed in Q&A D25 below.

Generally, the PBGC aggregates an individual's benefits from two or more terminated

plans for purposes of applying the PBGC maximum guarantee. However, such

The Eastern pilots’ plan was 100 percent funded through PC-4, which is the PBGC

guarantee, and partially funded through PC-5. Because the PBGC will use none of its

own funds to pay benefits under the Eastern plan, former Eastern pilots who also have a

benefit under the Delta Pilots Retirement Plan will be entitled to receive the full PBGC

guarantee with respect to the Delta Pilots Retirement Plan.

The situation is different under the TWA and Pan Am pilots’ plans. PC-4 benefits were

not 100 percent funded by plan assets in either of these plans. Therefore, to the extent

that a participant had a benefit payable under PC-4 from either of these plans, the portion

of such benefit funded by the PBGC’s assets will reduce the PBGC maximum guarantee

amount (per Appendix B) that is available to that pilot with respect to the Delta Pilots

Retirement Plan.

The PBGC does not aggregate benefits with respect to two or more participants when

applying the PBGC guarantee. If a pilot is entitled to a monthly pension benefit in her

own right under the Retirement Plan and to a monthly survivor benefit with respect to her

deceased husband who was also a pilot, the PBGC will not aggregate the two benefits

when determining the maximum PBGC guarantee. This individual would be entitled to a

separate PBGC guarantee for each of the two benefits.

The Health Coverage Tax Credit (HCTC) may apply to an individual who is age 55 or

older, receiving benefits from the PBGC, not eligible for Medicare or Medicaid, and

enrolled in a qualifying health plan. The tax credit is equal to 65 percent of the amount

of health insurance premiums paid by the eligible individual. The HCTC is administered

by the HCTC Program, within the IRS. After receiving information from the PBGC, the

HCTC Program sends eligible individuals the HCTC program kit, including an

for more information.

On November 16, 2005, the Senate passed S 1783, the Pension Security and

Transparency Act of 2005. Prior to passage of S 1783, two amendments affecting airline

DB plans were adopted. One amendment provided that special 20-year funding relief

could be elected for passenger airline DB plans. The second amendment incorporated the

language from S 665, a bill previously introduced in the Senate by Senator Akaka. That

language provides for potentially higher PBGC dollar guarantees for pilot participants in

terminated DB plans.

On December 15, 2005, the House passed HR 2830, the Pension Protection Act of 2005.

It has no airline-specific relief provisions and does not contain the Akaka amendment

language included in S 1783.

A Conference Committee was appointed by the House and Senate early in March, 2006

to resolve the differences between the two bills. When the House appointed its members

to the Conference Committee, it also passed a non-binding resolution asking its conferees

to accept the airline funding relief provisions of the Senate bill as well as the language

providing for potentially higher PBGC dollar guarantees for pilots of terminated defined

benefit plans (the Akaka amendment).

The Conference Committee is continuing to try to arrive at a compromise bill that both

the House and Senate can agree on. Unfortunately, they have already missed two selfimposed

deadlines (April 15 and Memorial Day), and have now set July 4 as their new

target. We are hopeful that they will reach agreement shortly, and ALPA has been urging

them to do so.

Even with the 20-year funding period provided in S 1783, the Retirement Plan is not

likely to survive the bankruptcy process. Among other reasons, the amount of annual

cash contributions required for the Delta Pilots Retirement Plan, even under the relaxed

funding rules, might affect Delta’s ability to attract financing sufficient to fund an exit

from bankruptcy. While the legislative funding relief may allow Delta to maintain the

non-contract employees’ DB plan after bankruptcy, due to the lower contribution

requirements for that plan, it is unlikely that it can save our Retirement Plan.

Yes. The language added to S 1783 by the Akaka amendment could be very important to

the Delta pilots. As explained earlier, the PBGC dollar guarantees are based on the age

of the pilot at the later of the date his benefit commences or DOPT. The Akaka

amendment would allow pilots to receive the full age 65 PBGC dollar guarantee at the

FAA mandatory retirement age (currently age 60). As presently worded, the Akaka

amendment would apply to the Retirement Plan even if the legislation is enacted after the

DOPT.

The table set forth in Appendix C illustrates how the PBGC dollar guarantees would be

impacted by the current Akaka amendment language. You can see that, under the Akaka

amendment, the PBGC maximum guarantee amounts would be approximately 53.85

percent higher than they are without the Akaka amendment.

60 $160,000 $165,000 $170,000 $175,000

59-11/12 136,251 140,509 144,766 149,024

59-10/12 135,427 139,659 143,891 148,123

59-9/12 134,603 138,809 143,015 147,222

59-8/12 133,779 137,959 142,140 146,321

59-7/12 132,955 137,110 141,264 145,419

59-6/12 132,131 136,260 140,389 144,518

59-5/12 131,307 135,410 139,514 143,617

59-4/12 130,483 134,560 138,638 142,716

59-3/12 129,659 133,711 137,763 141,814

59-2/12 128,835 132,861 136,887 140,913

59-1/12 128,011 132,011 136,012 140,012

59 127,187 131,162 135,136 139,111

58 118,190 121,884 125,577 129,271

57 109,985 113,422 116,859 120,296

56 102,486 105,689 108,891 112,094

55 95,617 98,605 101,593 104,581

54 89,313 92,104 94,895 97,686

53 83,516 86,126 88,736 91,345

52 78,175 80,618 83,061 85,504

51 73,246 75,535 77,824 80,113

50 68,689 70,836 72,982 75,129

*Limit is adjusted for benefits paid in a form other than a single life annuity.

Note that for ages below age 59, straight line interpolation would be used for ages

between the integer ages shown.

70 (1.66 x limit) $6,592.84 $79,114.08

69 (1.49 x limit) $5,917.67 $71,012.04

68 (1.34 x limit) $5,321.93 $63,863.16

67 (1.21 x limit) $4,805.62 $57,667.44

66 (1.10 x limit) $4,368.75 $52,425.00

65 (100 percent of limit applies at 65) $3,971.59 $47,659.08

64 (.93 x limit) $3,693.58 $44,322.96

63 (.86 x limit) $3,415.57 $40,986.84

62 (.79 x limit) $3,137.56 $37,650.72

61 (.72 x limit) $2,859.54 $34,314.48

60 (.65 x limit) $2,581.53 $30,978.36

59 (.61 x limit) $2,422.67 $29,072.04

58 (.57 x limit) $2,263.81 $27,165.72

57 (.53 x limit) $2,104.94 $25,259.28

56 (.49 x limit) $1,946.08 $23,352.96

55 (.45 x limit) $1,787.22 $21,446.64

54 (.43 x limit) $1,707.78 $20,493.36

53 (.41 x limit) $1,628.35 $19,540.20

52 (.39 x limit) $1,548.92 $18,587.04

51 (.37 x limit) $1,469.49 $17,633.88

50 (.35 x limit) $1,390.06 $16,680.72

70 $79,114.08 $121,713.96

69 $71,012.04 $109,249.32

68 $63,863.16 $98,251.08

67 $57,667.44 $88,719.24

66 $52,425.00 $80,653.80

65 $47,659.08 $73,321.68

64 $44,322.96 $68,189.16

63 $40,986.84 $63,056.64

62 $37,650.72 $57,924.12

61 $34,314.48 $52,791.60

60 $30,978.36 $47,659.08

59 $29,072.04 $44,726.16

58 $27,165.72 $41,793.36

57 $25,259.28 $38,860.44

56 $23,352.96 $35,927.64

55 $21,446.64 $32,994.72

54 $20,493.36 $31,528.32

53 $19,540.20 $30,061.92

52 $18,587.04 $28,595.40

51 $17,633.88 $27,129.00

50 $16,680.72 $25,662.60