Last updated: August 16, 2006

Q1:  What does the recent pension reform mean to Delta employees? Is this going to save our pensions?
A1. Delta now intends to preserve the defined benefit pension plan for its active and retired ground and flight attendant employees. That plan was frozen effective Dec. 31, 2005 such that no further benefits are earned under that plan after that date. Although the pension legislation will not result in ground and flight attendant employees earning additional benefits after the freeze date, it does help us to be able to provide non-pilot employees with the benefits earned through the date the plan was frozen. When plans get turned over to the PBGC, that doesn’t always happen.

Q2. How does the pension reform bill, H.R. 4, help ground employees and flight attendants?
A2. With the legislation in place, Delta intends to preserve its pension plan covering 91,000 active and retired ground and flight attendant employees, thereby preserving your hard-earned benefits and preventing the U.S. pension system from being burdened with additional plan liabilities.

Q3. How does the pension reform bill, H.R. 4, help the company?
A3. This legislation allows Delta and other airlines with frozen plans to fund current pension obligations on a more manageable schedule, using more stable, long-term assumptions. It will give us much more flexibility in our cash flow requirements over the next few years by stretching our required payments out over a longer term.

Q4. Delta’s non-pilot pension plan was frozen on Dec. 31, 2005. Does pension reform change my future retirement benefits or those already accrued?
A4. Pension reform legislation helps preserve already accrued benefits. It does not impact the pension freeze, effective Dec. 31, 2005. Freezing the plan does have an impact on future benefits, but not on benefits that have already accrued. To learn more about how the pension freeze impacts you, you may access the new Web-based Retirement Tool. The tool gives overall information and related personalized data for the Delta Retirement Plan, including the ability to estimate the plan benefits based on retirement date assumptions. Estimates reflect the Dec. 31, 2005 freeze. To access the planning tool, go to Employee Connection and Self Service from DeltaNet, and see Benefits Direct on the left navigation bar. Employees who are not eligible for a defined-benefit plan will not see the Retirement Plan tab and should call the ESC with questions about eligibility.

Q5. Are Delta’s current pension-related challenges a result of poor management of the Pension plan and its funds?
A5. Our pension plans have historically been well-funded. The assets in our pension trusts are professionally managed and have regularly outperformed targeted benchmarks. Additionally, conversion of the non-pilot plan to a cash balance formula and the subsequent freeze of the non-pilot plan as of Dec. 31, 2005 demonstrate pro-active steps we have taken to help address some of our pension related issues. The ERISA funded status of our pension plans is measured on July 1 of each year. On July 1, 2001, our plans had a funded status ratio of 100% or better for ERISA current liability purposes. The funded status of our defined benefit plans took a turn for the worse, largely as a result of a short period of negative investment returns, and a steady fall in the interest rates used for measuring liabilities.

Q6. Since the defined benefit pension plan for ground and flight attendant employees is frozen, is Delta considering a new plan going forward?
A6. Yes. At a future date, most likely when Delta is able to emerge from the Chapter 11 process, we plan to establish a new defined contribution plan to provide retirement benefits, along with the existing Family-Care Savings Plan. This would be in addition to any benefits an employee has already accrued in the defined benefit pension plan up to Dec. 31, 2005.

Q7. Why is Delta moving forward with termination of the pilots’ defined benefit pension plan? Does this action impact the plans for ground and flight attendant employees?
A7. Delta is seeking termination of the pilot plan because features in that plan result in unaffordable costs which would prevent the company from successfully reorganizing and emerging from bankruptcy. The pilot plan’s costs are expected to exceed $1 billion in the near term alone, even with pension reform legislation. This action does not impact Delta's other defined benefit pension plan for its active and retired ground and flight attendant employees.