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CARP Annual Funding Notices

Date: April 24, 2020

Annual Funding Notices (AFN) for CARP will be distributed to eligible participants starting tomorrow (some via e-delivery and others via U.S. mail).  These funding notices are required to be produced during the early part of the year and to be distributed to plan participants. While it might appear the timing of these notices is in some way related to recent changes in the broader markets, we are assured these are being published and released as required by law.

There are two different groups of employees:

The company will distribute the Group 1 cover letterto active employees.  Given the current environment, this letter addresses many questions including:

  • Recent volatility of plan funding
  • Impact of this volatility to benefit payments
  • 2020 Lump sum conversion rates.


The Group 2 cover letter will be sent to participants who have left United (are receiving annuity payments or are deferred vested participants, etc.) or are alternate payees or beneficiaries.  It should be noted that the number of deferred vested participants that are eligible for a lump sum payment is small and the company has elected not to create a separate communication for this group of individuals.

Additionally, management will be creating a tile on the front page of Your Benefit Resources (YBR) with the intent of making the attached FAQ available to employees as well as for use by personnel at the Benefits Center to respond to any questions they may receive.  

Management prominently points out in this communication that recent volatility in the broader financial markets has shown that it is difficult to predict future plan funding levels, as well as lump sum distribution conversion rates. As a result, the plan has seen a significant increase in lump sum distribution requests in recent weeks.   

However, management does not anticipate the funding level to impact CARP’s ability to pay benefits in the near term. In fact, 2020 lump sum distribution conversion rates are much more favorable than ever, resulting in higher lump sum distribution payout amounts, for those 18,000 of you who are eligible.For example, someone retiring this year would receive a lump sum payment 10% to 31% higher (depending on age and payment timing) than if she/he had commenced their lump sum in the second half of 2019.   

One final point, we believe it is important to point out that the 2019 CARP participant notice does include information about the Pension Benefit Guarantee Corporation (PBGC).   The inclusion of this information is mandated by law and in no way suggests the plan is actively under the management of the PBGC.  (This is something that has recently been rumored. This is not a PBGC plan.)

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