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Roth Rollover Frequently Asked Questions - updated April 1, 2009

New - updated 4/1/09

I received the letter from Rob Kight and IRS Form 8935. Does this mean Delta will be giving me the amount on IRS Form 8935 as an extra payment?
No. The amount reported on IRS Form 8935 was already paid to you as a result of either Delta’s or Northwest’s emergence from bankruptcy (e.g. a cash lump sum payment, an award of unrestricted or restricted stock, a bankruptcy claim, etc.). You will not be receiving the amount on IRS Form 8935 as an additional payment.

I received the letter from Rob Kight and IRS Form 8935. Does this mean that Delta has taken some portion of my pension benefit or my 401(k) benefit and put it into a Roth IRA?
No. The amount on the form represents bankruptcy related payments that have already been made to you. This form is only used to let you know how much you can contribute to a Roth IRA should you choose to do so.

I received the letter from Rob Kight and IRS Form 8935. Does this mean I will be taxed on the amount on the form?
No. The amount on the form represents bankruptcy related payments that have already been made to you (e.g. a cash lump sum payment, an award of unrestricted or restricted stock, a bankruptcy claim, etc.). You have already been taxed on those payments. This form is only used to let you know how much you can contribute to a Roth IRA should you choose to do so.

Is this another W-2 form? Why did I get it?
You did not receive a W-2 form. You received an IRS Form 8935 that is used to report the amount you are eligible to contribute to a Roth IRA. This is a special form created just for the purpose of new legislation that got passed in December of 2008. For most active employees, this is the only one of these forms you will ever receive. For some retirees, you may receive another of these forms upon final resolution of all the claims in our bankruptcy case.

Can I use my Cash Balance amount in the Delta Retirement Plan to fund the Roth IRA? What about any portion of any defined benefit pension plan that I have?
No. The Cash Balance amount or any other part of your qualified pension plan cannot be taken out of the plan unless you terminate or retire from Delta.

I have already spent this money. Does this mean I can’t take advantage of the Roth IRA?
No, you can still take advantage of this Roth provision. You can use other money such as savings or a loan to roll into a Roth IRA. You are just restricted to the amount reported on IRS Form 8935.

I have spent the money so can I put a lesser amount into a Roth IRA than what is reported on my IRS Form 8935?
Yes. You can contribute any amount into a Roth IRA, even a portion, up to the total amount reported to you on IRS Form 8935.

I am a Delta retiree, and I received only part of my bankruptcy claim. When will Delta pay me the additional amount that is owed to me? Will I be able to rollover that amount to a Roth account?
The timing of the final distribution of bankruptcy claims is not known at this time. All disputed claims must be resolved before final claims can be paid. A separate IRS Form 8935 will be mailed to you within 90 days of future bankruptcy payments, and you will have the opportunity to contribute that amount to a Roth IRA account.

I didn’t get a letter and Form 8935. Should I have gotten one?
You should have gotten the letter and form only if you are or were both a participant in a defined benefit pension plan sponsored by either Delta or Northwest and received a payment from Delta’s or Northwest’s emergence from bankruptcy (e.g. a cash lump sum payment, an award of unrestricted or restricted stock, a bankruptcy claim, etc.).

If I should have gotten the letter and form and did not, how do I ask that a copy be sent to me?
Please call the ESC at 1-800-MYDELTA to confirm that you are an eligible employee or retiree, and they can send you a copy.

If I was not a participant in a defined benefit pension plan, but received a bankruptcy related payment, can I take advantage of this?
No. The legislation passed by Congress requires that you are or were both a participant in a defined benefit pension plan sponsored by either Delta or Northwest and received a payment from Delta’s or Northwest’s emergence from bankruptcy (e.g. a cash lump sum payment, an award of unrestricted or restricted stock, a bankruptcy claim, etc.).

How long do I have to take action?
You have until June 22, 2009 to make the contribution to a Roth IRA.

How was June 22, 2009 chosen?
This is the date written in the legislation. It is 180 days from the date that the Act was signed into law (December 23, 2008).

How do I set up a Roth account?
You should contact your financial advisor for help with setting up a Roth IRA. Examples of companies who can help you are Fidelity, ING, Delta Community Credit Union, Schwab, etc.

The amount reported on my Form 8935 is more than the limits to contribute to a Roth IRA. Am I limited to the restricted amount that I can contribute to a Roth IRA?
No. The amount on your Form 8935 is eligible for a “Rollover” Roth IRA and is not limited to the current year amount for contributions to a Roth IRA.

When I received my cash lump sum emergence payment from Delta in May 2007, I elected to have it put into my 401k plan. Can I use this amount?
No, any payments put into a 401k plan (qualified plan) are not eligible for this Roth IRA rollover and any such amounts are not reflected on your Form 8935. The amount reflected on your Form 8935 is eligible for rollover to a Roth IRA.

Who do I call if I have more questions?
The ESC at 1-800-MYDELTA (1-800-693-3582)

Why didn’t someone tell us about this Roth provision in 2007 when we first received the bankruptcy related payments?
In 2007, this provision was not available. The legislation was signed into law on December 23, 2008.

Frequently Asked Questions - March 27, 2009

How am I impacted by the Workers, Retiree, and Employer Recovery Act of 2008 and Section 125 – Rollover of Amounts Received in Airline Carrier Bankruptcy to Roth IRAs?
The Workers, Retiree, and Employer Recovery Act of 2008 allows certain active and former airline employees to make contributions to a Roth IRA equal to the value of certain bankruptcy related payments.

What is a Roth IRA?
A Roth IRA is an individual retirement account, which allows you to make contributions on an after-tax basis. The earnings on a Roth IRA are generally tax free when you take a distribution.

Am I required to do anything as a result of this legislation?
No, you are not required to rollover your bankruptcy claim payments to a Roth IRA. Your action is strictly voluntary; however, the ability to contribute these amounts to a Roth IRA may present a favorable tax opportunity for you. You may want to consult your financial or tax advisor to discuss the features of a Roth IRA.

Who is eligible to take advantage of this legislation?
Airline employees and retirees must both have been 1) a participant of a defined benefit retirement plan that was terminated or frozen pursuant to the special airline funding rules of the Pension Protection Act, and 2) received a payment resulting from a bankruptcy claim, note or other fixed obligation approved by the bankruptcy court (an "Eligible Payment"). Eligible defined benefit plans include the Delta Retirement Plan, Delta Pilots Retirement Plan, Western Air Lines, Inc. Pilots Defined Benefit Plan, Northwest Airlines Pension Plan for Pilot Employees, Northwest Airlines Pension Plan for Contract Employees, and Northwest Airlines Pension Plan for Salaried Employees.

What bankruptcy payments qualify as Eligible Payments?
Eligible bankruptcy payments include lump sum emergence payments, stock or restricted stock issued directly in connection with emergence, proceeds of a note provided during bankruptcy, and bankruptcy claim payments made directly to you. The amount that may be contributed to a Roth IRA is limited to the taxable portion of an eligible payment. In order words, no payments made as contributions to a qualified plan count in the amount that is eligible for contribution to a Roth IRA.

How can I determine my "eligible payment"?

Delta has determined for each individual the amount it believes constitutes an eligible payment. This amount will be reported to you on Form 8935. Examples of eligible payments include bankruptcy claims paid to employees and retirees, lump sum emergence payments, stock or restricted stock distributions connected directly with awards granted at emergence, and amounts received as the result of any bankruptcy claim or note, in the form of cash or stock.

You can verify these amounts by using your year-end paystub for 2007, 2008, or 2009, or 1099 for the same years, and total the bankruptcy related payments received for those years.

When should I receive my report?

Under the Act, Delta's responsibility is to report to you and the IRS on or about March 23rd, the amount we have determined as your Eligible Payment for all bankruptcy related amounts paid to you prior to December 23, 2008 (the day the Act was signed into law).

For any additional Eligible Payments made after that date, we will report to you and the IRS the amount of such payment within 90 days of the payment.

Is there a deadline for making contributions to the Roth IRA?
The Act provides that you must make any contributions to the Roth IRA within180 days from the date of the enactment (December 23, 2008) which is June 22, 2009 for the initial report and 180 days from the receipt of payment for any future reports.

I already spent the money provided by the bankruptcy court. Can I use other personal funds to be able to participate?
Yes. You do not need to use the exact same funds for the contribution into a Roth account. You may use other funds, up to the eligible payment amount, and you may want to consult a financial advisor.

What types of payments could be made after December 23, 2008?
Payments made after December 23, 2008 will include the final distribution on bankruptcy claims in either the Delta or Northwest bankruptcy case. Neither Delta or Northwest has completed the process of settling all outstanding claims and so both companies will be making a final distribution to eligible claim holders in the future. This process will apply primarily to retirees of Delta.

When will Delta / Northwest be making the final distribution on bankruptcy claims?
The final distribution will be made once all outstanding bankruptcy claims have been resolved. The final distribution date is unknown at this time.

Can I get a replacement form 8935 if I misplace the original?
You can call 1-800-MYDELTA for a replacement form.

Where can I get more information on Roth IRAs and the Act?
You may refer to IRS Publication 590.

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