taking your future to new heights Southwest Airlines Pilots Retirement Savings Plan

Your Southwest Airlines Pilots Retirement Savings Plan Conversion Brochure—Guiding you through the exciting changes ahead. As previously announced, Schwab Retirement Plan Services, Inc. (SRPS) will be the service provider for the Southwest Airlines Pilots Retirement Savings Plan (the “Plan”) beginning mid-May 2016. This brochure will answer many of your questions about the upcoming conversion process and highlight new features and services available when the Plan returns to SRPS. To help you understand what is happening with your Plan account during the conversion, included in this brochure is a Conversion Calendar that includes important dates and deadlines. Please review it carefully so that you will know what to anticipate during the conversion process. Your account will automatically transfer to SRPS. There will be a blackout period which will begin after close of the market on May 5, 2016. This blackout period is expected to end the week of May 22, 2016. During the blackout period, you will be unable to make changes such as direct investments, change your contribution rate, obtain a loan or distribution, execute a fund transfer or submit a roll-in check. Contributions and loan repayments, if any, will continue to be deducted without interruption. If any portion of your account in the Plan is invested in a Schwab Personal Choice Retirement Account® 1 or “PCRA,” you will be unable to transfer assets from the PCRA to the Plan’s core funds and vice versa. However, trading within the PCRA will be permitted. If you wish to make changes to your account, please note the deadlines for certain transactions included in the Conversion Calendar. To understand what is happening with your current investments and future contributions, please refer to the Investment Guide included with this brochure.

inside this conversion brochure Conversion Calendar................................................................. 2 What You Need to Know About Some Plan Features...... 3 Resources to Help You Aim for New Heights.....................6

Conversion Calendar This calendar will help you plan for any actions that you may wish to take before the conversion begins. Until that time, you will continue to access your account by calling Empower Retirement at 1-866-588-2728 or online at www.swapa401k.com.

May 5, 2016 by 3:00 p.m. CT If you wish to conduct any of the following before the conversion, you must do so at Empower Retirement by 3:00 p.m. CT on Thursday, May 5, 2016: • request a contribution rate change • change investment elections for future contributions • execute a fund transfer* • request an online loan or distribution transaction • submit completed distribution or loan paperwork in good order • ensure your roll-in check is received Please note, some transactions may require paperwork to initiate a request. Please build in additional time to receive and complete the paperwork. *If any portion of your account is invested in a Schwab Personal Choice Retirement Account® 1 (PCRA), you will be unable to transfer assets from the PCRA to the Plan’s core funds and vice versa. However, trading within the PCRA will be permitted.

May 5, 2016 at 3:00 p.m. CT Blackout period begins. Assets will be prepared for in-kind transfer to SRPS. Once SRPS is in receipt of all assets, certain assets will be liquidated and reinvested same day in new funds. This information is detailed in the Investment Guide.

Week of May 22, 2016 Blackout period is expected to end. After the conversion is complete, you can log in to workplace.schwab.com/swapa to access your account. Or you may call Participant Services at 1-800-724-7526 to speak with a representative. The date set forth for the end of the blackout period is an estimate based on prior experience. This estimate should not be considered a guarantee for any purpose.

Whether or not you are planning to retire in the near future, you are encouraged to carefully consider how this conversion may affect your retirement planning, as well as your overall financial plan. Additionally, it is very important that you review and consider the appropriateness of your current investments prior to the blackout period.

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Plan Features What You Need to Know About Some Plan Features The Plan’s provisions will not change with the conversion. There are some features that will be impacted at conversion. Review the chart below so you will know more about each feature and can then decide if you want to take action once the conversion is complete.

Feature

Action

What will happen

Plan Investment Options

Action may be needed if you wish to reallocate prior to conversion

Once the conversion is complete, the Plan will offer a wider array of funds and investment options. To learn more about all the investment strategies and funds, please read the Investment Guide. It is always a good practice to regularly review your investments.

May be needed

If you have previously elected to have your account rebalanced at certain frequencies at Empower Retirement, please note this feature will not transfer with your account information. This feature is available at SRPS. Once the conversion is complete, you may elect to have your account rebalanced quarterly, semi-annually or annually.

Electronic Delivery Preferences

May be needed

Your electronic delivery preferences will not transfer with your account information. However, you can elect to have your statement and other important documents delivered electronically after the conversion is complete.

Beneficiary Election

Action may be needed if your beneficiary information is not current

Beneficiary elections at Empower Retirement will transfer with your account information. It is always a good reminder to regularly review and update, if necessary, your designations. Once the conversion is complete, log in to your account and review your designations.

Loan Repayments

No action required

Loan repayment deductions will continue without interruption. You are not required to take any action.

Contribution Rate

No action required

Your contribution rate will transfer with your account settings and you are not required to take any action. It is always a good idea to regularly review your contribution rate. Once the conversion is complete, please log in to your account and review your contribution rates.

Automatic Savings Increase

No action required

Your participant-directed automatic savings increase will transfer with your account information. You do not need to take action to continue with this feature.

Automatic Account Rebalance Schedule

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Feature

PCRA Investors

Login ID and Password

Action

What will happen

No action required

Your investments within PCRA will not change. Your login credentials for your PCRA at schwab.com will not change. Once the conversion is complete, your PCRA and your Plan account will be fully integrated at schwab.com.

Action may be needed after conversion to transact on your account

SRPS will assign and mail each participant an initial password. When you access your account for the first time after the conversion, whether by phone or online, your login ID will be your Social Security number (no dashes). Your initial password will be mailed to you as the Plan prepares to come out of the blackout period. During your initial login, you will be required to change your login credentials for security purposes. Once you establish your new login credentials, they may be used to access your account in whatever method is most convenient to you: by web, phone or app. Please call Participant Services at 1-800-724-7526 should you need help or immediate access as soon as the conversion is complete.

Participant Services

No action required

workplace.schwab.com/swapa available 24/74

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Get help if you need it. You will have access to the helpful and knowledgeable Participant Services Representatives that you may have experienced before at SRPS. Representatives are available Monday through Friday between 6:00 a.m. and 10:00 p.m. CT at 1-800-724-7526.

Participant Services 1-800-724-7526 Monday through Friday, from 6 a.m. to 10 p.m. CT

Schwab Workplace Retirement app accessible 24/7

Here’s What You Can Expect When The Plan Arrives At SRPS • An enhanced selection of investment options which will include target date funds, passively- and activelymanaged funds and of course, PCRA1 • Access to retirement plan advice provided by Morningstar®, 2 offering specific recommendations for your retirement plan investments and a savings strategy to help you work toward your retirement goals • More intuitive website functionality along with a new web address: workplace.schwab.com/swapa • Full transaction capabilities on the Schwab Workplace Retirement app for iPhone®, iPad®, Android™, and Kindle Fire3 • Compatibility with Direct Connect for Quicken, which allows you to access your Plan transaction data directly within Quicken • Knowledgeable Participant Services Representatives to help you with details about the Plan, website navigation, and on-the-go connectivity • Refreshed account statement design highlighting data that’s believed to be most important to you • Interactive tools in which you can model different factors such as your savings rate, desired retirement replacement income, and more, to help you work toward where you want to be during a time when you’re no longer working

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Resources To Help You Aim For New Heights Stay Connected Once the conversion is complete, you will have access to the following resources to help you stay focused on your approach to retirement.

Website

Mobile app

workplace.schwab.com/swapa Available 24/74

Available 24/7

Participant Services 1-800-724-7526 Monday through Friday 6 a.m. to 10 p.m. CT

Online chat Monday through Friday 8:30 a.m. to 6:30 p.m. CT

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Scan the QR code below to access the download page or visit workplace.schwab.com/mobile

Schwab Personal Choice Retirement Account® (PCRA) is offered through Charles Schwab & Co., Inc. (Member SIPC), a registered broker-dealer, as part of the Plan, with Plan recordkeeping services provided by Schwab Retirement Plan Services, Inc.

1

Retirement plan investment advice is formulated and provided by Morningstar® Retirement ManagerSM (“Morningstar”), which is not affiliated with or an agent of Charles Schwab & Co., Inc. (CS&Co.), a federally registered investment advisor; Schwab Retirement Plan Services, Inc. (SRPS); or any of their affiliates. The Morningstar service is available to participants enrolled in plans that use the recordkeeping and related services of SRPS. Participant access to the Morningstar service is facilitated through CS&Co. Neither CS&Co., SRPS, nor their affiliates supervise, make recommendations with respect to, or take responsibility for monitoring the advice provided to participants by Morningstar. Advice Consultants are not employees of Morningstar and act solely as facilitators to participants accessing the Morningstar service. Morningstar advice is limited to the fund investment options available under your Plan as selected by your Plan Sponsor or other fiduciary.

2

Requires a wireless signal or mobile connection.

3

Apple®, the Apple logo, iPad®, and iPhone® are trademarks of Apple Inc., registered in the U.S. and other countries. Android™ is a trademark of Google Inc. Use of this trademark is subject to Google Permissions. Kindle, Kindle Fire, and Amazon are trademarks of Amazon.com, Inc. or its affiliates. Access may be limited or unavailable during periods of peak demand, market volatility, and system upgrades, or for other reasons.

4

Schwab Retirement Plan Services, Inc. provides recordkeeping and related services with respect to retirement plans and has provided this communication to you as part of the recordkeeping services it provides to the Plan.

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