Association of Former Pan Am Employees, Inc.

Special Retirement Alert from AFPAE

February 11. 2001 TO: ALL FORMER PAN AM / NAL EMPLOYEES FROM: AFPAE RE: IMPORTANT DEVELOPMENT I wanted to report on the Friday's events, particularly the conference with Judge Lynch. In general the conference went very well. The judge flatly rejected PBGC's argument that our case was "moot," (or made irrelevant by subsequent events). Therefore he is permitting us to move forward with discovery. Discovery is a process by which we can make formal document requests concerning PBGC's policies and practices, particularly regarding determination of benefits. We can also depose PBGC officials regarding their conduct. The judge wants us to show some concrete situations where PBGC failed to act as a fiduciary. One example I gave him at the conference is where PBGC insisted that widows demand a survivorship pension before the PBGC would look for a signed waiver in their files. The judge clearly agreed that that was a good example of the kind of conduct I was talking about. The judge also rejected PBGC's claim that discovery should be limited to the issues that directly affect the three named plaintiff's. (Both sides agreed that the case can proceed without being treated as a class action) Therefore it becomes relevant that whether the persons suing has actually suffered the injury being complained of. The judge agreed to permit discovery on any issue that could possibly affect the plaintiff's. All of these positive developments by no means insure ultimate victory. The judge contemplates that the case will be disposed of via summary judgment (another motion) after conclusion of discovery. Therefore it is imperative that we focus on concrete instances of where PBGC did not protect the interests of the Plan participants -- where a real fiduciary would have done so. Following is a list from my memory. 1. Failure to protect and gain control over plan records. -- permitting salary and other records to be lost or destroyed. 2. Forcing employees to prove their overtime to get the more generous pre-1979 benefits based on total compensation. Rejecting tax returns and other evidence of earnings. 3. Not taking control of all of the records former National Airlines employees. Not having a list of such employees or following up to determine whether such employees were eligible for benefits. 4. Generally failing to take a proactive role in identifying employees that became eligible for benefits. 5. Failing to provide a determination of the underlying plan benefit within a reasonable period of time, even if the amount of the guaranteed benefit could not be provided. 6. Numerous and widespread mistakes and systematic errors in the calculation process. (we need to identify specifics). 7. Failure to recognize administrative practice to the extent recognized in similar plans. Please let me know any specifics with respect to PBGC's conduct, particularly with respect to benefit calculations. Please be as specific as possible as to the types and extent of the errors uncovered. This is critical. If we can show a systematic pattern of errors and judgment calls that were decided against the participants, it much more likely that the Judge will decide in our favor. It is important that, we focus on the calculation of benefits under the Plan, as opposed to calculation of the amount of the PBGC's guarantee. This is very important. Please call if you have any questions. Harvey _____________________________________________________________________ IT IS VERY IMPORTANT THAT ALL OF YOU READ THE PARAGRAPH IN RED ABOVE. HARVEY STATES, "[Both sides agreed that the case can proceed without being treated as a class action)." FOR THOSE OF YOU WHO HAVE BEEN SITTING ON THE FENCE BECAUSE YOU THOUGHT THAT YOU WOULD NOT HAVE TO JOIN AFPAE AND INVEST $25 A YEAR DUES, ALONG WITH YOUR $125 FOR OUR LEGAL DEFENSE FUND, YOU HAD NOW BETTER RETHINK YOUR REASONING. YOU MAY VERY WELL BE LEFT OUT IN THE COLD AFTER THIS CASE HAS BEEN SETTLED. WHY DO YOU THINK THAT THE PBGC HAS AGREED TO THIS? MAYBE, IT IS TO LIMIT THE PEOPLE THAT THEY WILL HAVE TO PAY TO THOSE EMPLOYEES WHO HAVE FILED APPEALS AND ARE AFPAE MEMBERS! WE HAVE WARNED EVERYONE ABOUT THIS FOR OVER ELEVEN YEARS. NOW, THE WRITING IS ON THE WALL. I THINK THAT ALL OF YOU WHO ARE NOT AFPAE MEMBERS SHOULD JOIN RIGHT NOW AND FILE YOUR APPEALS. FOR MORE INFO CALL RICHARD BROOKS 561-357-1065, I WILL ANSWER ALL YOUR QUESTIONS. FOR AN APPLICATION TO JOIN AFPAE PLEASE GO TO: WWW.PANAM.ORG/AFPAE.HTM ON OUR HOME PAGE, ABOUT 3/4 OF THE WAY DOWN, YOU WILL SEE A CLICK ON RECTANGLE THAT SAYS, "MEMBERSHIP APPLICATION FORM." DOUBLE CLICK. FILL OUT THE FORM ON YOUR COMPUTER, PRINT IT OUT, AND MAIL IT OUT ALONG WITH YOUR TWO CHECKS. DON'T COME SCREAMING TO US LATER IF YOU DO NOT JOIN AFPAE AND FILE YOUR APPEALS. THE ONLY THING LEFT FOR YOU TO DO AT THAT POINT WILL BE TO GO OUT AND RAISE $823,000 SO YOU CAN BRING SUIT AGAINST THE PBGC TO GET YOU PENSION BENEFITS.

Form Updated: Wednesday, January 27, 1999 11:09:10 AM