October 29, 2004
To the Participants in the Delta Retirement Plan:
You may have read about the Pension Funding Equity Act of 2004 (PFEA), which was signed by President Bush on April 10, 2004. This letter explains how this legislation affects Delta’s contributions to this Plan. Also, please be sure to read the government-required notice on the back of this letter.
Companies are required to make "regular contributions to their defined benefit pension plans as well as "additional contributions to plans that are underfunded, often referred to as Deficit Reduction Contributions (DRC). The legislation allows companies in the airline and steel industries to defer up to 80% of the DRC in the 2004 and 2005 plan years.
As permitted under PFEA, Delta has made a special election that reduces the amount of contributions that are required to be made for the 2004 plan year to the Delta Retirement Plan. The election was made on September 30, 2004. The following information is being provided to you pursuant to the new law. A decision regarding the 2005 plan year will be made at a later date.
Delta believes it is a prudent financial step under our current circumstances to take advantage of the short term relief offered by the new legislation. However, even with this deferral, as noted in Delta’s announcement of its financial results on October 20, 2004, we will still have substantial liquidity needs in 2005.
This letter is intended to clarify what the pension deferral means and to keep you fully informed of what Delta has elected. While the notice on the reverse summarizes information about the Pension Benefit Guaranty Corporation (PBGC), filing this election does not indicate that Delta has taken any other action beyond election of DRC Relief under the PFEA. If you need further assistance, please call the Employee Service Center at 1-800-MY DELTA between 8 am and 5 pm EST.
Sincerely,
Robert L. Kight
Managing Director - Global Benefits & Health Resources
Pension Funding Equity Act Notice to participants and beneficiaries who have a benefit in the Delta Retirement Plan (Employer Identification Number 58-0218548 / Plan Number 002) The company has elected to take advantage of the ‘alternative deficit reduction contribution of the Pension Funding Equity Act of 2004 and defer up to 80% of the ‘additional contribution’, often referred to as Deficit Reduction Contribution (DRC). On September 30, 2004, the company made this election for the 2004 plan year. The estimated amount of the minimum required contribution for the 2004 plan year after taking into account the deferral allowed under the PFEA is $0. The 2004 minimum required contribution for the 2004 plan year is estimated to have been $395 million without taking into account the deferral allowed under PFEA. The Pension Benefit Guaranty Corporation (PBGC) is a federal corporation created by the Employee Retirement Income Security Act of 1974 (ERISA), the Act under which Delta’s pension plans are governed. (Please note that the PBGC does not guarantee certain types of benefits as further explained below.) When a defined benefit pension plan terminates without enough money to pay all benefits, the PBGC steps in to assume responsibility for that plan. The PBGC pays many people all pension benefits, but some people may lose certain benefits that are not guaranteed. The PBGC pays pension benefits up to certain maximum limits. The maximum guaranteed benefit is $3,698.86 per month or $44,386.32 per year for a 65 year-old person in a plan that terminates in 2004. The maximum benefit may be reduced for an individual who is younger than age 65. For example, it is $2,404.26 per month or $28,851.11 per year for an individual who starts receiving benefits at age 60; and $1,664.49 per month or $19,973.88 per year for an individual who starts receiving benefits at age 55. The maximum benefit will also be reduced when a benefit is for a survivor. The PBGC does not guarantee benefits for which you do not have a vested right when a plan terminates, usually because not enough years have been worked for the company. The PBGC also does not guarantee benefits for which you have not met all age, service, or other requirements at the time the plan terminates. Benefit increases and new benefits that have been in place for less than a year are not guaranteed. Those that have been in place for fewer than 5 years are only partially guaranteed. Early retirement payments that are greater than payments at normal retirement age may not be guaranteed. For example, a supplemental benefit that stops when you become eligible for Social Security may not be guaranteed. Benefits other than pension benefits, such as health insurance, life insurance, death benefits, vacation pay, or severance pay, are not guaranteed. The PBGC generally does not pay lump sums exceeding $5,000. Where to obtain more information: For more information about this plan, Employer Identification Number 58-0218548 (Plan Number 002), sponsored by Delta Air Lines, Inc., contact the Employee Service Center by e-mail at esc.delta@delta.com, or call 1-800-MY DELTA. For more information about the PBGC and the benefits it guarantees, you may request a free copy of "Your Guaranteed Pension" by writing to Consumer Information Center, Dept. YGP, Pueblo, Colorado 81009. Your "Guaranteed Pension" is also available on the PBGC's Web site at <http://www.pbgc.gov>.