I remember someone explaining all the pots of money from the bankruptcy era and I copied/saved for my own education and re-reading, so I've reposted it here.

DISCLAMER: I was not here during that time, so if anyone who was has corrections to the below date, please chime in.


"The calculations to try and bring each pilot to a 49% DB were based on the DB plan surviving as a frozen plan like NWA. When that plan was terminated the 49% went out the window. It had nothing to due with note or claim money. After the termination there were 4 pots of money for each pilot. The MPP plan, note money, PBGC money and DC going forward. Since senior pilots were projected to do better than junior pilots a decision was made to try and provide all pilots a roughly equal retirement. The note money was retargeted by plus-ing every pilot with less than a 205,000 dollar FAE up to 205,000 and a minimum length of service payment added. While the DB plan was frozen the DC money was targeted with some junior pilots getting up to 18% and most pilots with over 18 years of service under 2%. If the DB plan ended up terminated the DC plan was supposed to be retargeted to make that loss of DC money up for the more senior pilots. When the DB plan was terminated the DB plan went to a flat 9% for all pilots rather then try and make the senior pilots whole.

There was also a fifth pot of money which was the claim for delta stock. It was the largest component but not directly considered retirement money but later ruled as such by the IRS and allowed to be rolled into a Retirement account tax free.

The two note and claim payments had approximately 150,000 that was withheld to be distributed over a 3 year period tax free at the 415c limit. This meant pilots could not fund the 401K for 3 years and all DC money was distributed as ordinary income. With the delayed IRS ruling finally allowing a tax free rollover of the note and claim this turned out to have been unnecessary however the net result was the same."