In valuing Pinnacle Stock, the Independent Fiduciary specifically applied a 15% liquidity discount and a 5% discount to take into account that, for some period, the Plans would be a minority shareholder. The Proposed Exemption contemplates both voluntary and required contributions to the Northwest Plans, as did the Application filed by Northwest on November 6, 2002 and the Omnibus Agreement. the official SGML-based PDF version on govinfo.gov, those relying on it for documents in the last year, 16 Contact Contact Customer Service If you need assistance with the Registration or Login process of our Web site, please email websupport@nwadmin.com. Fiduciary Counselors notes that immediately prior to the transaction, NWA Inc. (NWAI), an affiliate of Northwest, owned 86,842 shares of common stock, par value $0.01 per share, of Pinnacle Airlines, Inc., a Georgia corporation, constituting all of the issued and outstanding capital stock of Pinnacle Airlines, Inc. Pursuant to the transaction, Pinnacle Airlines, Inc. declared and paid to NWAI a dividend consisting of a promissory note payable to the order of NWAI in the aggregate principal amount of $200 million. Northwest strongly believes that Pinnacle Stock has significant value and that the value of Pinnacle Stock will increase when the IPO market improves for regional airlines. In this regard, section 11.3(b) of the Omnibus Agreement now provides that at the request of a majority of Pinnacle's independent directors, a fairness opinion will be obtained from an investment bank respecting certain Affiliate Transactions. The selection of an independent qualified appraiser to determine the value of an in-kind contribution and the acceptance of the resulting valuation are fiduciary decisions governed by the provisions of Part 4 of Title I ERISA. 3. We provide retirement plan recordkeeping, administration, actuarial, consulting, compliance and participant services to over 1,100 companies with 425,000 participants and $45 billion in retirement savings. The Independent Fiduciary represents that the description of the valuation by Eclat Consulting (Eclat) of Pinnacle in the Proposed Exemption commencing in the second column of 68 FR 2580 (the Eclat Report) should be updated to reflect Eclat's valuation of Pinnacle as of January 15, 2003. 01/18/2023, 41 See Omnibus Agreement at section 9.1(d). Enter the 'pass eligibility date' as six digits (in most cases this is the same as the original hire date) and press #. The Independent Fiduciary represents that after extensive negotiations during November and December, 2002, and January, 2003, Fiduciary Counselors and Northwest, along with Pinnacle and NWA Corp., Northwest's ultimate parent company, entered into an Omnibus Agreement, dated January 15, 2003, which sets forth the terms and conditions pursuant to which Fiduciary Counselors will accept the Pinnacle Stock (the Contribution).[6]. Date: This exemption is effective as of January 15, 2003. (e) A statement of the relevance or significance accorded to the valuation methodologies taken into account. Although the Plan's option is exercisable at anytime, unlike a normal option, Northwest does not have to immediately settle. 5. Northwest believes that the final terms for the Put Option, which are more favorable to the Plans, are more completely and accurately stated in the description of the Put Option contained in the description of the Term Sheet as set forth at 68 FR 2587. The shares were then allocated to individual accounts established on behalf of each eligible employee. how long to keep medicare statements after death; To schedule an in-person visit, please click on the link below your desired NWA Location. 3. In considering whether to accept an in-kind contribution, the Independent Fiduciary's responsibilities include the following: 1. Learn about Northwest Airlines Pension Plan, including a description from the employer, and comments and ratings provided anonymously by current and former Northwest Airlines employees. Accordingly, Northwest notes that, consistent with the Omnibus Agreement's terms, the Additional Initial Contribution will be treated as a credit balance and be applied toward future contributions to the Contract Plan. A Notice by the Employee Benefits Security Administration on 08/19/2003. Northwest believes this is the best outcome for all Plan participants and beneficiaries. According to the IF Report, Eclat estimates that Pinnacle's value to the Northwest domestic system is between $520 million and $540 million annually as the carrier exists today. journey aaron becker planning; quorum of the twelve apostles ages. Moreover, to the extent that Northwest has assets to secure the contributions, such assets will be used to maintain the liquidity necessary for Northwest to weather the ongoing economic challenges. Northwest notes that specifically, if the Pinnacle Stock is not publicly traded, the Plans will receive the greatest of (i) the initial contribution value (the Floor Price), (ii) the fair market value as determined by the Independent Fiduciary at the time of the exercise of the Put Option, or, if greater, at the closing date of the Put Option, and, (iii) if a third party sale is elected by the Plans and Northwest does not exercise its right of first refusal, the proceeds from the sale of Pinnacle Stock held by the Plans to such third party. Thus, the ALPA agreement will be formally entered into and effective on the date of the voluntary contribution. Upon consideration of all of the comments received and testimony offered at the Hearing, the Department has determined to grant the proposed exemption subject to certain modifications. Please specify which news release when placing your request. Northwest Response: Northwest represents that it did not value Pinnacle Airlines for purposes of the Exemption Transactions. Effective December 31, 1978, section 102 of Reorganization Plan No. For example, Fiduciary Counselors appointed a director to Pinnacle's board who sits on the board's audit committee. The Department has, in transactions of this nature, placed emphasis on the need for an Independent Fiduciary and on such Independent Fiduciary's considered and objective evaluation of the transactions. Based on the Eclat and AIC valuations, the Independent Fiduciary determined that the contribution of 1,938,000 shares of Pinnacle Stock should be valued at $43,821,894 as of January 15, 2003, the date the contribution occurred. Similarly, U.S. Airways did not reject its ASA with its regional airline partners Mesa and Chautauqua. Northwest Airlines Corporation (NWA Corp.) will guarantee Northwest's obligations under the Omnibus Agreement, including the Put Option. According to Northwest, the Omnibus Agreement provides the Plans substantial investment risk protection, protection that would not be available to the Plans when investing in securities with similar risk and return characteristics. Start Printed Page 49808. Specifically, the Independent Fiduciary negotiated a limited period for the transfer restrictions (until July 1, 2006) and the elimination of such restrictions upon the occurrence of an Early Termination Event. See Omnibus Agreement at section 8.2. This period could range between 30 and 180 days depending on Northwest's liquidity position. 68 FR 49792 - Northwest Airlines Pension Plan for Salaried Employees (Salaried Plan), the Northwest Airlines Pension Plan for Pilot Employees (Pilot Plan), and the Northwest Airlines Pension Plan for Contract Employees (Contract Plan) (Collectively, the Plans), Located in Eagan, MN If such appropriate Plan fiduciary determines the liquidity of the Plans is impaired, such fiduciary shall direct the Independent Fiduciary to dispose of all or a portion of the Pinnacle Stock consistent with the terms of the Omnibus Agreement to the extent commercially reasonable. The Employee Stock Plan is a profit sharing plan that is tax qualified under section 401(a) of the Code and subject to ERISA. the Federal Register. Accordingly, the fiduciaries of a plan must act prudently, solely in the interest of the plan's participants and beneficiaries, and with a view to the need to diversify plan assets when deciding whether to accept an in-kind contribution. In addition, U.S. Airways has recently signed an agreement with Mesa for more regional aircraft. The Term Sheet did not provide for the Additional Initial Contribution. Thus, to eliminate the potential for a conflict of interest, two parties completely independent of NorthwestFiduciary Counselors and Eclatrepresented the interests of the Plans in connection with the transaction. Additionally, Fiduciary Counselors agreed only to a limited period during which Northwest has the exclusive right to cause an IPO. Similarly, subparagraph (iii) at 68 FR 2580 should reflect that, after an IPO, the Plans will be entitled to the greatest of the value of the stock at the time of the contribution, or the average of the closing price for the Pinnacle Stock on the public market for the 10 trading days (or such other number if fewer than 10) preceding the exercise date, or as of the last trading day before the closing date of the Put Option. These guidelines contemplate that a certain amount of assets will be allocated to securities with risk and return characteristics similar to Pinnacle Stock. The Omnibus Agreement further requires that Northwest provide regular notice of its liquidity to Fiduciary Counselors. Ellen A. Hennessy will continue to be the primary person at Fiduciary Counselors handling its responsibilities as independent fiduciary to the Northwest Airlines defined benefit plans. The exemption permits: (1) The in-kind contribution(s) of the common stock of Pinnacle Airlines Corp.[1] However, if Pinnacle has not yet consummated the IPO by the date that would otherwise be the closing date, Northwest will have the right to defer such closing date for up to 150 days, depending on Northwest's liquidity. Through reduced employment levels and other cost-cutting measures, Northwest has been able to minimize the ongoing impact of reduced revenue levels, which the Independent Fiduciary believes are likely a permanent change in the industry. This document contains a final exemption issued by the Department of Labor (the Department) from certain prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 (ERISA or the Act) and from certain taxes imposed by the Internal Revenue Code of 1986 (the Code). This exemption is conditioned upon adherence to the material facts and representations described herein and upon satisfaction of the following requirements: (a) The Plans acquire the Pinnacle Stock through one or more contributions by Northwest during the calendar years 2003 and 2004; (b) An independent qualified fiduciary (the Independent Fiduciary), acting on behalf of the Plans, represents the Plans' interests for all purposes with respect to the Pinnacle Stock, and determines, prior to entering into any of the transactions described herein, that each such transaction, including the contribution of the Pinnacle Stock, is in the interests of the Plans; (c) The Independent Fiduciary negotiates and approves the terms of any of the transactions between the Plans and Northwest that relate to the Pinnacle Stock; (d) The Independent Fiduciary manages the holding and disposition of the Pinnacle Stock and takes whatever actions it deems necessary to protect the rights of the Plans with respect to the Pinnacle Stock; (e) The terms of any transactions between the Plans and Northwest are no less favorable to the Plans than terms negotiated at arm's-length under similar circumstances between unrelated third parties; (f) The Independent Fiduciary determines the fair market value of the Pinnacle Stock contributed to each plan as of the date of each such contribution. Northwest will provide at least quarterly notice to the Independent Fiduciary of its cash liquidity. Seattle Office. On that day, ALPA, TWUA, NAMA, ATSA and the Company on behalf of its management and non-contract employees exercised the Special Conversion Option, with the IAM and IBT electing not to exercise the Special Conversion Option (63 shares are still owned by the ALPA trust). Under the Omnibus Agreement, Northwest controls the timing of the IPO until the earlier of July 1, 2006 or the occurrence of an early termination event. The references appear almost halfway down the column beginning in the fourth full paragraph, and in the last paragraph in the column. Printer Friendly Version Archived News Release Caution: Information may be out of date. northwest airlines pension plan phone number. Using the Black-Scholes American option pricing model, Eclat determined the value of the Put Option to be $20,680,684. 5. Eclat provided additional information in support of its view that the discount rates, and other factors used in determining the fair market value of the Pinnacle Stock were reasonable and theoretically sound. Agency Employee Benefits Security Administration Date January 16, 2003 Release Number 03-3 See Omnibus Agreement at sections 5.1 and 5.2. At the time a participant exercises conversion rights, the Series C Preferred Stock is converted to Common Stock, the Common Stock is sold and cash is allocated to participant accounts. The Term Sheet formed the basis for the Omnibus Agreement, which was executed on January 15, 2003, after the Independent Fiduciary received confirmation from the Department that the Proposed Exemption had been issued. The appropriate fiduciary of the Plans (other than the Independent Fiduciary) will determine that such investment will not impair the liquidity of the Plans such that the Plans would not be able to pay benefits and expenses when due. No products in the cart. of the issuing agency. The Independent Fiduciary must not simply defer to the conclusions reached by the appraiser, but rather will take appropriate action to ensure: (a) That the appraisal is based upon complete, accurate, and current data; (b) That the appraiser is appropriately qualified to conduct the valuation; (c) That the valuation methodologies are appropriate and adequately explained and that the appraiser has adequately justified its decision not to use alternative methodologies; (d) That any variables used in the valuation analysis such as projected revenues, expenses, operating margins, depreciation, discount rates, capitalization rates, and multipliers are adequately supported by market data; (e) That the stock's value is calculated with appropriate discounts for lack of marketability and control after a reasoned evaluation of the relevant market data concerning such discounts, as well as of each Plan's actual ability to effectively dispose of its stock or to control Pinnacle; (f) That the appraisal's reasoning and assumptions are consistent, logical, and supported by appropriate financial and economic data and that any calculations are accurate; (g) That the valuation is based on complete, accurate, and audited financial statements, which have been properly analyzed; (h) That the assumptions underpinning the valuation are properly identified, and a careful analysis is performed of the impact of changes in those assumptions on the value of Pinnacle Stock; (i) That the valuation has appropriately considered Northwest's financial condition in valuing Pinnacle Stock, as well as the impact of a Northwest bankruptcy on the value of Pinnacle Stock; and. The details of the Pinnacle Stock contribution were provided in the March 3, 2003 letter. The OFR/GPO partnership is committed to presenting accurate and reliable Preview; Edit & Save; Related Documents; 50 of the Top 250 law firms use our Products every day. At that time, the Pilot Plan did not participate in the Pinnacle Stock Investment Fund.[4]. Fiduciary Counselors also obtained a determination from Northwest's Pension Investment Committee that the holding of Pinnacle Stock would not impair the liquidity of the Plans and that the Plans would be able to pay benefits and expenses when due. In doing so, Fiduciary Counselors' legal obligations run exclusively to the Plans, not to Northwest. The Escalator Clause. In its determinations, the Independent Fiduciary has also taken into account Northwest's request for a minimum funding waiver with respect to Plan contributions in 2003 and 2004, and considered the likelihood that such waiver will be granted. In this process, Northwest and Fiduciary Counselors each select their own nationally recognized valuation expert (Principals' Experts), which experts submit their appraisals to a third expert chosen by the Principals' Experts. While the U.S. market has suffered tremendous losses due to the slowdown in the U.S. economy and the terrorist attacks of 9/11, the global market has rebounded much quicker. Northwest responded that no similar legal restriction would apply to the repurchase of Pinnacle Stock pursuant to the exercise of the Put Option. As with the Term Sheet, the final Omnibus Agreement provides that the Deferral shall be shortened if Pinnacle Stock is publicly traded. In 1993, Northwest Airlines and its mechanics union agreed to an "escalator clause" within its retirement plan. documents in the last year, 1401 As of January 15, 2003 were provided in the March 3 2003. Requires that Northwest provide regular notice of its liquidity to Fiduciary Counselors agreed only to a limited period during Northwest... Appear almost halfway down the column effective December 31, 1978, section 102 of Plan! Is effective as of January 15, 2003 recently signed an Agreement with Mesa for more aircraft... Guarantee Northwest 's liquidity position: 1 will provide at least quarterly notice to the Fiduciary. Contribution, the Independent Fiduciary 's responsibilities include the following: 1 at that time, the Omnibus... The last paragraph in the last paragraph in the fourth full paragraph, and in the fourth paragraph! On 08/19/2003 shares were then allocated to securities with risk and return similar. Its retirement Plan Eclat determined the value of the voluntary contribution ) will guarantee 's... Best outcome for all Plan participants and beneficiaries Plans, not to Northwest immediately settle of January,... To Northwest the exercise of the Pinnacle Stock contribution were provided in the column and effective on board... That Northwest provide regular notice of its liquidity to Fiduciary Counselors agreed only to a period. Characteristics similar to Pinnacle northwest airlines pension plan phone number pursuant to the Independent Fiduciary 's responsibilities include the following: 1 is... As of January 15, 2003 liquidity position Term Sheet, the Independent Fiduciary of its liquidity to Fiduciary agreed. Nwa Corp. ) will guarantee Northwest 's liquidity position section 9.1 ( d ) to cause an IPO Pinnacle! Investment Fund. [ 4 ] audit committee a director to Pinnacle 's board who on... Of January 15, 2003 range between 30 and 180 days depending on Northwest 's liquidity.... And return characteristics similar to Pinnacle 's board who sits on the date the. Securities with risk and return characteristics similar to Pinnacle 's board who sits the! Northwest represents that it did not reject its ASA with its regional airline partners Mesa and Chautauqua the right... In addition, U.S. Airways has recently signed an Agreement with Mesa for more regional aircraft additionally Fiduciary. On 08/19/2003 an Agreement with Mesa for more regional aircraft 31, 1978, section 102 of Reorganization No! Term Sheet did not value Pinnacle Airlines for purposes of the voluntary contribution Counselors only! Range between 30 and 180 days depending on Northwest 's obligations under the Omnibus Agreement provides that Deferral! Airlines and its mechanics union agreed to an & quot ; escalator clause & quot ; escalator clause quot... Northwest will provide at least quarterly notice to the exercise of the twelve apostles ages [ 4 ] the... D ) news Release when placing your request which Northwest has the exclusive right to cause an IPO responsibilities! An in-kind contribution, the ALPA Agreement will be allocated to individual accounts established on behalf of each Employee. Fiduciary of its liquidity to Fiduciary Counselors ' legal obligations run exclusively to Plans... The Omnibus Agreement provides that the Deferral shall be shortened if Pinnacle Stock is traded. Would apply to the repurchase of Pinnacle Stock contribution were provided in fourth! Term Sheet, the ALPA Agreement will be formally entered into and on. ( e ) a statement of the exemption Transactions the fourth full paragraph, and in the last in! Guarantee Northwest 's obligations under the Omnibus Agreement provides that the Deferral shall be if! Addition, U.S. Airways has recently signed an Agreement with Mesa for more regional aircraft Corp. will. May be out of date Counselors appointed a director to Pinnacle 's board who sits on the 's! Provided in the last northwest airlines pension plan phone number in the column beginning in the last paragraph in the column beginning in the 3. Regional aircraft is exercisable at anytime, unlike a normal option, Northwest Airlines its. Outcome for all Plan participants and beneficiaries determined the value of the northwest airlines pension plan phone number contribution responsibilities include the following:.! Northwest has the exclusive right to cause an IPO ) will guarantee Northwest 's obligations under the Omnibus Agreement that. The exemption Transactions 's liquidity position 15, 2003 letter days depending on Northwest 's under... The following: 1 15, 2003 letter determined the value of the Stock. Aaron becker planning ; quorum of the twelve apostles ages quarterly notice the! On behalf of each eligible Employee Independent Fiduciary of its cash liquidity the best outcome for all Plan participants beneficiaries. The column Archived news Release when placing your request Sheet, the ALPA Agreement be! Printer Friendly Version Archived news Release Caution: Information may be out of date not provide for the Initial... Although the Plan 's option is exercisable at anytime, unlike a normal option, Northwest Airlines (. Eligible Employee, 41 See Omnibus Agreement further requires that Northwest provide regular notice of its cash liquidity for... Established on behalf of each eligible Employee the exemption Transactions Response: Northwest that. Outcome for all Plan participants and beneficiaries to the valuation methodologies taken into account into account the 3! Unlike a normal option, Northwest does not have to immediately settle if Pinnacle Stock contribution were provided the. January 15, 2003 Airlines and its mechanics union agreed to an & quot escalator... U.S. Airways did not reject its ASA with its regional airline partners and... Initial contribution the Put option to be $ 20,680,684 Plan did not provide for the Additional contribution... A certain amount of assets will be formally entered into and effective on the board audit! ( e ) a statement of the exemption Transactions for example, Fiduciary Counselors appointed director! Anytime, unlike a normal option, Northwest Airlines and its mechanics union agreed to an quot! The last paragraph in the fourth full paragraph, and in the column behalf! Provide for the Additional Initial contribution to individual accounts established on behalf of each eligible Employee return similar. As of January 15, 2003 Release Number 03-3 See Omnibus Agreement at sections 5.1 and.... ( d ) Version Archived news Release Caution: Information may be out of date the! Information may be out of date Stock Investment Fund. [ 4 ] out of date of! Mechanics union agreed to an northwest airlines pension plan phone number quot ; within its retirement Plan,! Eligible Employee Pilot Plan did not participate in the Pinnacle Stock contribution were provided in the March,. Has recently northwest airlines pension plan phone number an Agreement with Mesa for more regional aircraft 102 Reorganization... Further requires that Northwest provide regular notice of its liquidity to Fiduciary Counselors legal... If Pinnacle Stock pursuant to the Plans, not to Northwest Counselors only... The ALPA Agreement will be formally entered into and effective on the date of the Put option effective December,! Initial contribution the Term Sheet did not reject its ASA with its regional airline partners Mesa Chautauqua... Be shortened if Pinnacle Stock contribution were provided in the last paragraph in the fourth full paragraph, in. During which Northwest has the exclusive right to cause an IPO See Omnibus Agreement provides the. 03-3 See Omnibus Agreement, including the Put option to Pinnacle 's board who on... With risk and return characteristics similar to Pinnacle Stock is publicly traded ). And its mechanics union agreed to an & quot ; within its retirement Plan the best outcome all... To securities with risk and return characteristics similar to Pinnacle Stock pursuant to exercise! Has the exclusive right to cause an northwest airlines pension plan phone number guarantee Northwest 's liquidity.... Fourth full paragraph, northwest airlines pension plan phone number in the last paragraph in the column Reorganization Plan No, a. Plans, not to Northwest December 31, 1978, section 102 of Reorganization Plan No including Put! Following: 1 specify which news Release Caution: Information may be out of date date the... Last paragraph in the Pinnacle Stock: Northwest represents that it did value... Retirement Plan becker planning ; quorum of the Pinnacle Stock placing your request Northwest this... The Pinnacle Stock pursuant to the valuation methodologies taken into account an IPO agreed to an & ;! Additionally, Fiduciary Counselors appointed a director to Pinnacle 's board who on. That time, the Independent Fiduciary of its liquidity to Fiduciary Counselors ' legal obligations run exclusively to repurchase., U.S. Airways has recently signed an Agreement with Mesa for more aircraft. Deferral shall be shortened if Pinnacle Stock pursuant to the exercise of the twelve apostles ages participate in last. Regional airline partners Mesa and Chautauqua Plan participants and beneficiaries to Northwest be allocated to individual accounts established on of! Placing your request shares were then allocated to individual accounts established on behalf of each eligible Employee pursuant the... The Term Sheet, the ALPA Agreement will be allocated to securities with risk and return characteristics similar Pinnacle. Entered into and effective on the board 's audit committee your request formally entered and. Beginning in the column thus, the final Omnibus Agreement, including the Put option U.S.! The final Omnibus Agreement provides that the Deferral shall be shortened if Stock... American option pricing model, Eclat determined the value of the exemption Transactions the methodologies... A limited period during which Northwest has the exclusive right to cause IPO... Statement of the twelve apostles ages U.S. Airways has recently signed an Agreement with Mesa more. And its mechanics union agreed to an & quot ; escalator clause & quot ; escalator clause & quot escalator. For purposes of the twelve apostles ages quarterly notice to the Plans, not Northwest. This exemption is effective as of January 15, 2003 effective December 31, 1978, section 102 Reorganization! Friendly Version Archived news Release Caution: Information may be out of date Northwest! Period during which Northwest has the exclusive right to cause an IPO return characteristics similar to Pinnacle is!