Update on the UAL stock fund in Flight Attendant 401(k)
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From: AON Fiduciary Counselors, Inc.
To Plan Participants in:
The United Airlines Ground Employee 401(k) Plan,
The United Airlines Management and Administrative 401(k) Plan, and
The United Airlines Flight Attendant 401(k) Plan.
(collectively the “Plans”)
Dear Plan Participant:
As you know, on December 4th, the federal Air Transportation Stabilization Board (“ATSB”) announced that it could not approve the proposal submitted by United Air Lines, Inc. (“UAL”) for a $1.8 billion federal loan guarantee. As a result, we temporarily halted all participant activity into or out of the United Airlines Stock Fund (“Fund” or “Stock Fund”) to permit an orderly sale of the UAL stock remaining in the Fund. All of the remaining UAL stock was sold before UAL filed for bankruptcy and the Fund has been reopened. You are now able to redirect all or a portion of your Stock Fund units into other investment options in your Plan. However, no new investments are being permitted into the Fund at this time.
Aon Fiduciary Counselors Inc. has been acting as the independent fiduciary for the Fund in your Plan since late September. As we told you in our letter of September 27, we directed that no additional UAL stock be purchased for the Fund while UAL was engaged in its restructuring efforts. We did this because UAL had publicly announced that it might file bankruptcy if it did not receive the federal loan guarantee and we determined that it would not be prudent to purchase additional UAL stock under those circumstances. We also directed the trustee of the Plans to gradually increase the percentage of cash investments in the Fund by selling UAL stock.
When the ATSB denied the loan guarantee, more than half of the Fund was invested in a money market fund. We have now sold the remaining UAL stock in the Fund and upon settlement of the final UAL stock sale transactions, the Fund will be entirely invested in the Colchester Street Trust: Money Market Class I.
All existing investment elections into the UAL Stock Fund have been redirected to the Blended Income Fund, the default option under the Plan. This means that new contributions and other amounts that you have directed invested in the Stock Fund will instead be deposited in the Blended Income Fund. You should evaluate the appropriateness of your current investment decisions in light of the current changes. Please remember that there is a restriction on transferring assets from the Blended Income Fund directly to the Money Market Fund.
We do not anticipate that we will reopen the Fund to new investments until a plan of reorganization is confirmed. Assuming that UAL stock is publicly traded at that time and that the Fund is still an investment option in your Plan, you will have an opportunity to decide whether or not to invest in the Fund once you have been informed of the terms of the Company’s reorganization. You will need to contact Fidelity to begin contributing to the Fund at that time if you wish to do so.
Fidelity Investments continues to provide administrative and record keeping services for the Savings Plans. To make any transactions, including transactions out of the Stock Fund, please call the Fidelity Service Center at 1-800-245-9034 or log on to Fidelity NetBenefitsSM at www.401k.com.
Sincerely,
Nell Hennessy
President
AON Fiduciary Counselors, Inc.
