Q. Who will participate in the Profit Sharing Plan?
A. Both pre-merger East and West IAM represented eligible “active” Fleet Service employees based on the period of time they were represented by the IAM. For East employees, that would be the period January 1, 2006 through December 31, 2006. For West employees that would be the period of time beginning with the first day of the first pay period after they were certified as represented by the IAM through the end of the year. For Fleet Service that date will be May 20, 2006.
Q. What is meant by eligible “active” employees?
A. To be eligible you must have been “actively employed” on December 31, 2006 and had company W-2 compensation during 2006. Any employee who terminated prior to that date would not be eligible, but an employee on inactive status (unpaid leave) on that date would be considered “actively employed” and would be eligible based on any Company W-2 earnings they received during the year. Any employee who terminated after December 31, 2006 would also be eligible.
Q. What about employees who were furloughed or on Worker’s Compensation during 2006, are they eligible?
A. Yes, as long as they had some Company W-2 earnings during the year and met the definition of active. However, unemployment insurance benefits and Worker’s Comp benefits do not count as W-2 earnings for determining eligibility or for use in distributing profit shares.
Q. Are employees who retired or furloughed eligible?
A. Unions had the opportunity to decide whether to include employees who were furloughed or who retired and had W-2 operating company income during the fiscal year. The IAM opted to include these individuals in the Profit Sharing. Keep in mind there are some cases where the employee retired during 2005, but had some earnings in 2006. In those cases the earnings are included, because the employee retired and had company operating earnings in the plan year of 2006.
Q. What about someone who took an Early Out or Voluntary Separation?
A. If their Early Out or Voluntary Separation was a separation from the company, they are not eligible because they were not active on Dec 31, 2006. If, however, their Early Out or Voluntary Separation was a retirement, and they had company earnings during 2006 they are eligible.
Q. When will profit share be paid out?
A. The Company plans to issue the profit share pay-out on March 15 in a separate check, which will be considered normal earnings.
Q. What is the IAM Fleet Service share of the profit sharing pool?
A. Under the collective bargaining agreement, the Fleet Service share of the profit sharing pool is equal to the Fleet Service share of total labor cost savings achieved under the “Transformation Plan,” which is the code phrase for the savings under the labor agreements restructured through the bankruptcy process. The Fleet Service share of the total Profit Sharing ($58.7 million) allocated to all Union groups is as follows
IAM – Fleet Service Workers – 9.176390%
$58.7 Million X 9.176390% = $5,386,540.96 allocated to the Fleet Service Employees.
Q. How will the individual’s share of the profit pool be determined?
A. The profit sharing pay-out within the Fleet Service group is based upon eligible individual W-2 earnings, for the period the employee is included in the profit share divided by the total eligible W-2 for all the Fleet Service Employees.
Example:
The Total W-2 earnings for the East and West Fleet Service Employee for 2006 using the total W-2 for the East and using the total W-2 for the West from May 20, 2006 is $162,762,027.88
Each individual amount of Profit Share would be calculated as follows:
Individual W-2 earnings - divided by Total Fleet Service Earnings - multiplied by the amount of Profit allocated to the Fleet Service Group = Estimated Individual amount of Profit Share
| Individual W-2 Earnings | Total Fleet Service Earnings 2006 | Percentage of Allocated Profit Share | Allocated Profit Share | Individual Profit Share |
| $10,000 | $162,762,027.88 | 0.006144% | $5,386,540.96 |
$330.95 |
| $15,000 | $162,762,027.88 |
0.009216% |
$5,386,540.96 | $496.42 |
| $20,000 | $162,762,027.88 | 0.012288% | $5,386,540.96 | $661.89 |
| $25,000 | $162,762,027.88 | 0.015360% | $5,386,540.96 | $827.36 |
| $30,000 | $162,762,027.88 | 0.018432% | $5,386,540.96 | $992.84 |
| $35,000 | $162,762,027.88 | 0.021504% | $5,386,540.96 | $1,158.31 |
$40,000 |
$162,762,027.88 |
0.024576% |
$5,386,540.96 |
$1,323.78 |
| $45,000 | $162,762,027.88 | 0.027648% | $5,386,540.96 | $1,489.26 |
| $50,000 | $162,762,027.88 | 0.030720% | $5,386,540.96 | $1,654.73 |
Note: If the amount of Profit Share due a Fleet Service Employee using the above formula is less than $50.00, that employee will receive a minimum distribution of $50.00
Q. Are employee contributions to a 401(k) or Section 125 plan contributions included as earnings for profit sharing distribution purposes?
A. Yes. These are “elective deferrals” of earned wages and considered part of gross W-2 earnings for Profit Sharing Plan purposes.
Q. Will the company make contributions to the 401K plan for any employees who are entitled to a company match?
A. Yes, normal 401k Company contributions will apply to any eligible employee who is entitled to a company match.
Q. Will the Company make contributions to a Company Defined Contribution Pension Plan for employees who are eligible to participate?
A. Yes, if an employee participates in a Defined Contribution Pension Plan, the Company will make the regular contributions based on the profit share amount the employee receives.
Q. If employees are enrolled in the 401K plan, will the Profit Sharing Check be eligible for employee contributions to the 401K?
A. The Profit Share Check is considered normal earnings and employees who are enrolled in the 401K plan will have the percentage that is on file at the time the check is issued deposited in the employees 401K account.
Q. Can employees make changes to the percentage they put into the 401K plan?
A. Rules under the current 401K plan for changes to the amount an employee can defer into the 401K plan will apply, so you may want to contact the plan administrator.
Q. What about credit Union deductions such as loan payments, will they be deducted?
A. No, credit Union deductions for loan payments will not be deducted from the profit share payment.
Q. If employees are inactive (on a leave of absence) when Profit Sharing Plan distributions are made are they still eligible?
A. Yes, as long as there were some company W-2 earnings during 2006.
Q. Are distributions from the Profit Sharing Plan taxable?
A. Yes. Any payout from the Plan is treated as ordinary income and subject to payroll and income tax. Employees will be taxed at the Federal supplemental earnings rate of 25%. Normal FICA, state, local, state disability, and unemployment withholding rates will also apply.