Pensio n Benefi t Guarant y

Protecting America's Pensions 120 0 Street , N.W. , Washington , D.C. 20005-402 6 

Apri l 30 ,

,Esq . 

R e : Appea l 2017- , Cas e No . 20637 1 (Delph i Hourly-Rat e 

Employee s Pensio n Pla n (th e "Delph i Hourl y Plan " o r th e "Plan") ) 

Dea r .. : 

T h e Appeals Boar d is respondin g t o th e appea l o f PBGC' s benefi t determinatio n o f 

Septembe r unde r th e Delph i Hourl y Plan , issue d t o you r client , 

( " ") . PBG C determine d tha t PBGC-payabl e monthl y benefi t shoul d b e 

 befor e Augus t an d 3 o n an d afte r Augus t

benefi t currentl y bein g pai d i n th e for m o f a Join t an d 65 % Survivo r Pop-u p 

 wit h Pop-up") , an d .( " his forme r 

spouse , is th e designate d beneficiar y o f th e survivor' s benefit . Yo u conten d tha t PBG C shoul d 

allo w t o cance l th e survivo r benefi t electio n an d hav e his benefi t increase d t o th e amoun t 

o f a straight-lif e annuity . 

I. Summary of decision 

W e find tha t PBG C doe s no t guarante e th e straight-lif e annuit y benefi t resultin g fro m a n 

electio n unde r Sectio n 5(a ) o f th e Pla n t o cance l th e survivo r benefit . Unde r Titl e o f th e 

Employe e Retiremen t Incom e Securit y Ac t o f as amended ("ERISA" ) an d PBG C 

regulations, a participan t mus t hav e me t al l condition s fo r receivin g a benefi t before a pensio n 

plan's terminatio n dat e fo r th e benefi t t o b e guaranteed . On e o f th e Plan' s condition s fo r 

cancelin g th e survivo r benefi t electio n unde r Sectio n 5(a ) is writte n waive r o f he r survivo r 

benefit , witnesse d b y a notar y Becaus e di d no t obtai n suc h a waive r from 

befor e th e Plan' s termination , PBGC'canno t guarante e th e resultin g straight-lif e annuit y benefit . 

Henc e w e mus t den y appeal . 

I I. Background 

PBG C is th e Unite d State s governmen t agenc y tha t insure s pension s i n accordanc e wit h 

Titl e I V o f ERISA . I f a pla n sponso r is unabl e t o suppor t its define d benefi t pensio n plan , PBG C 

become s th e statutor y truste e o f th e pla n an d pay s guarantee d pensio n benefits accordin g t o th e 

pla n provisions , subjec t t o lega l limit s se t b y Congress unde r ERISA . 
Genera l Motor s Corporatio n ("GM" ) spu n of f Delph i Automotiv e System s Corporatio n 

("Delphi" ) effectiv e Januar y A s par t o f tha t arrangement , Delph i agree d t o sponso r a 

n e w pensio n pla n fo r its hourl y employee s t o replac e thei r previou s coverag e unde r th e G M 

Retiremen t Progra m fo r Hourl y Employee s ("G M Hourl y Plan") . Th e Delph i Hourl y Plan' s 

origina l effectiv e dat e wa s als o Januar y 1 ,

Whe n th e Delph i Hourl y Pla n terminate d o n Jul y 2009 , i t di d no t hav e sufficien t assets 

t o provid e al l benefits provide d unde r th e Plan , an d PBG C becam e th e statutor y truste e o n 

Augus t 2009 . PBG C pay s benefits base d o n th e term s o f th e Plan , th e provision s o f ERISA , 

a n d PBGC' s regulation s an d policies. 

 PBG C become s statutor y truste e o f a terminate d plan , PBG C collects participan t 

informatio n an d copie s o f th e plan's governin g documents from th e plan's administrato r an d 

audits tha t data . PBG C relie s o n th e informatio n i t receive s from a pla n admimstrato r unless 

PBGC' s audi t o f tha t informatio n show s tha t i t is incorrect , o r a participan t supplie s PBG C wit h 

documents showin g tha t th e informatio n is

PBG C record s contai n th e followin g informatio n relevan t t o pensio n benefit : 

• wa s o n Jun e 23 ,

• H e wa s hire d o n Jun e , as a n hourl y employe e o f GM ; 

 Hi s employmen t transferre d from G M t o Delphi , effectiv e Januar y 1 ,

 Th e liabilit y fo r his benefi t unde r th e G M Hourl y Pla n transferre d t o th e Delph i 

Hourl y Pla n effectiv e Januar y 1 ,

• marrie d o n Augus t 23 , '•; 

• H e terminate d employmen t o n Augus t ; 

• Whe n his employmen t terminated , h e wa s eligibl e fo r a 30-yea r typ e retirement ; 

• bega n receivin g a n adjuste d Pla n benefi t o f $2,910.0 8 pe r mont h as a 

J&65%S A wit h Pop-u p o n Septembe r 1 , , his actua l retiremen t dat e

• an d divorc e becam e final o n Ma y 8 ,

• Th e Pla n terminate d o n Jul y 2009 , an d becam e th e statutor y truste e o n 

Augus t 2009 ; an d 

• O n Marc h reduce d .. estimate d monthl y benefi t 

t o $1,524.2 3 i n th e for m o f th e J&65%S A wit h Pop-up . 

 See Pensio n Electio n Confirmatio n Statemen t date d Augus t 22 , , provide d as Enclosur e

 I n th e divorc e decree , . is liste d as th e an d is liste d as th e Defendant . Afte r th e divorce , 

nam e reverte d t o 1 (he r maide n name) , bu t sh e ha s sinc e remarrie d an d is no w know n as 

t . 

2 
O n Januar y contacte d PBG C regardin g his divorc e fro m , Hi s lette r 

state s i n relevan t par t th e following : 

O n th e dat e o f m y retirement , Septembe r 1 , ha d electe d th e 

annuit y 65 % survivo r benefi t wit h pop-up . Circumstance s 

followe d an d o n th e dat e Ma y 8, th e Judgmen t o f Divorc e 

w a s granted . 

Enclose d is a cop y o f th e divorc e decree . O n pag e 3 (highlighted ) 

is th e judgmen t concernin g pension . M y ex-wife, . canno t 

clai m beneficiary . I shoul d hav e th e optio n t o switc h t o th e 

straigh t lif e annuit y an d receiv e ful l benefi t as o f Ma y 8, 

PBG C responde d t o " lette r o f Januar y o n Januar y PBG C stated: 

W e hav e receive d you r inquir y regardin g changin g you r electe d 

for m o f benefit . 

I f yo u electe d th e norma l for m o f benefi t fo r a marrie d participan t 

befor e th e pla n ended , the plan would have permitted you to 

change your benefit to a straight-life annuity ["SLA "] your 

marriage ended in divorce your former spouse agreed, and 

then to revert back to a joint-and-65%- survivor annuity you 

remarried. 

T h e norma l for m o f benefi t fo r a n unmarrie d participan t fo r th e 

hourl y pla n * * is a straight-lif e annuity . I f yo u wer e singl e 

whe n yo u retire d an d yo u electe d th e straight-lif e annuit y befor e 

t h e pla n ended , th e pla n woul d hav e permitte d yo u t o chang e you r 

benefi t t o a joint-and-65%-survivo r annuit y i f yo u late r married . 

PBG C wil l no t allo w thes e changes, however , w e wil l hono r suc h 

change s mad e befor e th e pla n ended . Any such changes must have 

been completed prior to the Date of Plan Termination (July 31, 

2009) for PBGC to the change. you have confirmation 

that the change was made by a prior administrator, you may send 

a copy to PBGC for review. 

(Emphasi s added.) 

PBG C record s relatin g t o you r benefi t d o no t includ e an y documents confirmin g a chang e

you r benefi t for m befor e th e Plan' s o n Jul y 2009 . 

3 
HI. PBGC's determination of September

O n Septembe r PBG C issue d a benefi t determinatio n lette r t o statin g tha t h e 

is entitle d t o a monthl y benefi t o f pai d as a J&65%S A wit h Pop-up. 3 PBGC' s benefi t 

determinatio n lette r informe d . tha t his monthl y benefi t entitlemen t o f include s a 

supplemen t tha t is payabl e unti l h e reache s ag e 6 2 an d on e mont h an d is mor e tha n th e

monthl y benefi t o f $1,524.2 3 tha t h e is currentl y receiving . Th e benefi t determinatio n lette r 

furthe r informe d tha t his monthl y benefi t entitlemen t effectiv e Augus t , wil l b e 

$1,417.5 3 a t ag e 6 2 an d on e month , whe n th e supplemen t is n o longe r payable . 

A Benefi t Determinatio n Statemen t date d Jun e 6 , wa s include d wit h th e benefi t 

determinatio n Th e Benefi t Determinatio n Statemen t informe d tha t tw o o f 

ERISA' s benefi t limitation s appl y t o hi s benefit . Thos e limitation s ar e th e

("AAN" ) limitatio n an d th e Maximu m Guarantee d Benefi t ("MGB" ) limitation . Th e Benefi t 

Determinatio n Statemen t showe d ho w PBG C calculate d benefi t unde r th e Pla n an d 

 benefi t fo r th e AA N an d MG B limitations . Th e Benefi t Determinatio n 

Statemen t als o tha t his monthl y benefi t befor e Augus t , include s a n 

increas e o f $106.9 7 pe r mont h unde r sectio n 4022(c ) o f ERISA. 5 

Becaus e o f benefi t payment s tha t . receive d immediatel y afte r th e Pla n terminate d tha t 

wer e abov e ERISA' s benefi t limitations , th e benefi t determinatio n lette r state s tha t PBG C mus t 

adjust his monthl y benefi t t o accoun t fo r a ne t overpaymen t o f $181.51 . A s explaine d i n Sectio n 

VII I below , n o longe r ha s a ne t overpaymen t h e ha s bee n underpai d b y

p e r mont h sinc e Marc h

IV. appeal of PBGC's determination 

Afte r receive d a filin g extension , yo u file d a timel y appea l b y emai l o n his behalf. 

Specifically , you r appea l o f Januar y 6 , state s i n relevan t par t th e following : 

Give n th e short-ter m marriag e betwee n Mr . an d his ex-wife , i t 

h a d neve r bee n th e inten t o f eithe r individua l tha t Mrs . (no w 

remarried ) shoul d continu e as th e designate d beneficiar y an d 'elected ' 

survivin g spouse . Indeed , th e inten t tha t Mrs . shoul d no t b e entitle d 

t o clai m an y benefits fro m Mr . pensio n wa s clearl y an d 

unambiguousl y expresse d b y the m i n thei r stipulated divorc e judgmen t o f 

 Th e J&65%S A wit h Pop-u p is a for m o f benefi t providin g tha t i f th e participan t die s first, th e spous e wil l receiv e 

6 5 % o f th e participant's monthl y benefi t fo r life . I f th e participant's spous e die s first, th e participant's monthl y 

benefi t wil l "pop-up " t o th e monthl y amoun t o f a straight-lif e annuity . 

 Th e Appeal s Boar d foun d a smal l erro r i n th e Benefi t Determinatio n Statemen t o f Jun e 6 , 2016 . A revise d Benefi t 

Determinatio n Statemen t is provide d a t Enclosur e 2 . Th e onl y chang e is reflecte d o n pag e 7 , a t Lin e 29 , o f th e 

revise d Benefi t Determinatio n Statement , an d w e explai n thi s chang e i n footnot e 6 below . 

 Unde r sectio n 4022(c ) o f ERISA , PBG C allocate s t o a participant's nonguarantee d benefi t a portio n o f PBGC' s 

recoverie s o n claim s against th e pla n sponso r an d th e member s o f its controlle d grou p fo r unfunde d benefi t liabilitie s 

a t pla n PBG C allocate d $106.9 7 th e nonguarantee d portio n o f monthl y supplement , 

increasin g his tota l monthl y benefi t befor e Augus t t o See Enclosur e 2 , a t 6 , Line s 25-26 . 

4 
M a y 8, . Th e relevan t provisio n i n th e divorc e judgmen t rea d as 

follows : 

Tha t Plaintif f an d Defendan t shal l eac h receive , fre e an d clea r o f an y clai m 

o f th e other, an y presen t an d al l futur e pension , annuities, profi t sharing , 

 an d retiremen t benefi t plan s i n thei r respectiv e names. 

(Judgmen t o f Divorce , entere d Ma y 8, a t p . 3 - Exhibit 4). 

Furthermore , fo r purpose s o f pursuin g this appeal , Mr . throug h 

undersigne d counsel , sought , vi a motion , an d wa s awarde d a clarifyin g 

post-judgmen t orde r from th e divorc e cour t 

 tha t provide s as follows : 

 Thi s Cour t clarifie s tha t th e entere d judgmen t o f divorc e di d no t 

inten d t o besto w upo n Defendan t an y survivin g spous e benefits 

derive d from (G M an d Delphi ) pensio n plans. 

2 . Thi s Cour t directs Defendan t t o sign , execute , o r effectuat e al l 

requisit e documents an d lega l instruments tha t th e pla n 

administrators (G M and/o r PBGC ) migh t requir e i n orde r fo r th e 

parties' contracte d inten t t o b e full y effectuated . 

(Order , entere d Januar y - Exhibit 5). 

Michiga n adhere s t o th e vie w espouse d b y th e majority o f federa l circuits 

tha t a party's decisio n t o foreg o benefits from th e othe r spouse's

governed ) pensio n pla n throug h th e operatio n o f a stipulate d divorc e 

judgmen t constitutes a waiver of beneficiary rights as it does not invoke 

ERISA's pre-emption section. [Footnote : ERISA' s pre-emptio n section , 

2 9 § state s tha t ERIS A shal l supersed e an y an d al l State 

 [rathe r tha n contractua l arrangements] insofa r as the y ma y no w o r 

hereafte r relat e t o an y employe e benefi t pla n covere d b y Egelhof f 

v . Egelhoff , 53 2 U.S . 141 , 14 6 .. . (2001) . (Interna l quotatio n mark s 

omitted.) ] Maclnnes v Maclnnes, 26 0 Mic h Ap p 67 7 NW2 d

(2004 ) ("[h]avin g concurre d wit h th e vie w i n th e federa l circuits 

a n d conclude d tha t givin g effec t t o th e abov e provisio n doe s no t 

compromis e th e purpos e an d goals o f ERIS A ... , w e hol d tha t defendan t 

waive d his rights t o th e lif e insuranc e proceed s a t issu e an d thu s is no t 

entitle d t o retai n them") . 

T h e cases wherei n federa l distric t courts di d no t find th e decisio n o f th e 

PBG C (no t t o allo w a chang e o f beneficiar y designatio n afte r th e 

terminatio n dat e o f th e plan ) t o b e arbitrar y an d capriciou s ar e 

distinguishabl e from th e facts o f this cas e becaus e thos e case s di d no t 

involv e th e survivo r spouse's undisputed voluntary waiver o f his/he r 

5 
rights t o benefits. Se e e.g., Vanderka m v . Pensio n Benefi t Guarant y Corp. , 

9 4 3 F.Supp.2 d 130 , 14 1 (2013) . 

However , unde r th e facts o f this case, a decisio n no t t o allo w Mr . 

t o remov e Mrs . . as his

woul d b e arbitrar y an d capricious. 

F o r th e foregoin g reasons, Mr . requests tha t th e PBG C 

recalculat e his pensio n benefits a s a straigh t lif e annuity , rathe r tha n a join t 

and-65 % survivo r 'pop-up ' annuity . 

(Emphasi s i n Original. ) 

appea l doe s no t contest th e calculatio n o f his monthl y benefi t unde r th e Pla n o r th e 

amoun t b y whic h PBG C reduce d his benefi t t o accoun t fo r th e AA N an d MG B limitation s unde r 

ERISA. 6 

Afte r reviewin g appeal , th e Boar d notifie d pursuan t t o PBG C regulatio n tha t 

t h e Board' s decisio n o n th e appea l coul d adversel y affec t her. 7 B y lette r date d Ma y 2017 , th e 

Appeals Boar d informe d tha t a decisio n b y th e Appeal s Boar d regardin g Mr . 

appea l coul d affec t you r entitlemen t t o a survivin g spous e benefi t unde r th e Delph i 

Hourl y Plan , w e ar e providin g yo u th e opportunit y t o submi t writte n comment s concernin g this 

matter. " Th e Boar d receive d n o writte n respons e fro m " , bu t th e Boar d contacte d he r t o 

confir m tha t sh e receive d th e letter. 8 

V. Issue presented by appeal 

T h e issu e presente d b y appea l is whethe r PBG C guarantee s th e straight-lif e 

annuit y for m o f benefi t resultin g fro m th e post-terminatio n cancellatio n o f th e survivo r benefi t 

election. 9 A s explaine d below , w e fin d tha t PBG C doe s no t guarante e th e increase d benefi t 

 Unde r th e AA N limitation , PBG C ma y no t guarantee mor e tha n th e amoun t o f a participant's benefi t payabl e as a 

 annuit y a t norma l retiremen t age . See 29 Cod e o f Federa l Regulation s ("CFR" ) § A s show n 

 _ revise d Benefi t Determinatio n Statement , tha t amoun t is pe r month . See Enclosur e 2 , a t 4 , 

Lin e Th e AA N limitatio n woul d preven t PBG C from guaranteein g mos t o f th e "pop-up " o r increas e

monthl y benefi t abov e $1,570.31 , predecease s . befor e Augus t i. monthl y benefi t is 

 befor e Augus t 1 , , onl y becaus e PBG C share s a portio n o f its recoverie s unde r sectio n 4022(c ) o f 

ERISA . monthl y benefi t woul d pop-u p b y onl y $8.7 8 pe r mont h t o $1,639 . 97 , i f

befor e Augus t 1 , . See Enclosur e 2 , a t 7 , Lin e 29 . O n an d afte r Augus t , becaus e th e supplemen t is n o 

longe r payable , an d n o additiona l sectio n 4022(c ) benefits ar e allocable , monthl y benefi t entitlemen t is 

$1,417.53 . See Enclosur e 2 , a t 6 , Lin e 24 . monthl y benefi t woul d increas e b y $106.6 9 t o $1,524.22 , th e 

amoun t o f a straight-life-annuit y benefit , i f predecease s o n o r afte r Augus t . See Enclosur e 2 , 

 7 , 30 . 

 4003.57(a) . 

 Telephon e conferenc e wit h (Februar y 14 , ) . 

 Althoug h ha s no t submitte d waiver , th e Appeal s Boar d decide s tha t requirin g t o d o s o no w 

woul d b e futil e give n PBGC' s long-standin g position , poste d publicl y o n its websit e an d conveye d privatel y t o 

6 
amoun t payabl e as a straight-life-annuit y for m o f benefit . Therefore , w e uphol d PBGC' s 

determinatio n an d den y appeal . 

V I. Statutory background, Plan provisions, and prior Appeals Board decisions 

A. Relevant provisions of ERISA and PBGC regulations 

PBG C guarantee s benefits base d o n th e term s an d provision s o f a PBGC-insure d pensio n 

plan , bu t PBGC' s guarante e is subjec t t o th e provision s o f ERIS A an d PBGC' s regulations. 

Unde r sectio n 4022(a ) o f ERISA , PBG C guarantee s th e paymen t o f nonforfeitabl e benefits unde r 

a PBGC-insure d pensio n pla n tha t terminates, subjec t t o limitation s unde r Titl e I V o f ERISA , 

includin g th e AA N an d MG B

PBGC' s benefi t paymen t regulatio n establishe s specifi c requirements fo r PBGC' s 

 Unde r sectio n 4022.3(a), 1 2 PBG C "wil l guarante e th e amount , as o f th e tenninatio n 

date , o f a benefi t provide d unde r a pla n t o th e exten t tha t th e benefi t doe s no t excee d th e 

limitation s i n ERIS A an d i n subpart B [o f regulations] ,

( 1 ) Th e benefi t is, o n th e terminatio n date , a nonforfeitabl e benefit ; 

( 2 ) Th e benefi t qualifie s as a pensio n benefi t as define d i n § 4022.2 ; an d 

( 3 ) Th e participan t is entitle d t o th e benefi t unde r § 4022.4. " 

I n this decision , w e focu s primaril y o n th e first an d thir d o f thes e requirements. Th e first 

requiremen t fo r PBGC' s guarante e is a nonforfeitabl e benefit . T o hav e a nonforfeitabl e benefi t 

unde r a pensio n plan , a participan t mus t hav e satisfie d th e condition s o f th e pla n necessar y t o 

establis h th e righ t t o receiv e th e benefi t o n o r befor e th e dat e th e pla n terminated. 1 3 

Unde r th e thir d requirement , a participan t mus t b e entitle d t o th e benefi t t o b e guaranteed . 

T o b e entitle d t o a guarantee d benefi t unde r sectio n 4022.4(a ) o f PBGC' s regulations, th e 

i n correspondence , tha t PBG C woul d hono r cancellation s o f th e survivo r benefi t onl y i f complete d befor e 

Pla n tennination . See no . 14) . 

 See ERIS A § 4022(a ) an d (b) , (definin g "nonforfeitabl e benefit" ) an d (amount s payabl e b y 

PBGC) ; 2 9 Unite d State s Cod e § an d 1361 . Th e Appeal s Boar d wil l refe r i n this 

decisio n t o provision s o f rathe r tha n th e C. 

 par t 4022 . 

 See 29 CF R § 4022.3(a) . 

 See ERIS A § 4001(a)(8) ; 2 9 CF R § 4022.3 ; Pension Benefit Guar. Corp. v. LTV Corp., 49 6 U.S . 633 , 637-63 8 

(1990 ) ("nonforfeitabl e benefits, i.e. , thos e benefits whic h participants hav e earne d unde r th e pla n term s as o f th e 

dat e o f tennination, " citin g sectio n 4001(a)(8 ) 4022(a)) ; see also Deppenbrookv. Pension Benefit Guar. Corp., 

7 7 8 166 , 16 9 (D.C . Cir . ("PBG C guarantee s onl y thos e benefits tha t ar e nonforfeitabl e as o f th e pla n 

terminatio n date." ) an d PBG C regulatio n 4022.3(a)(1)) . 

7 
participan t mus t satisf y a t least on e o f th e condition s fo r benefi t A "participan t is 

entitle d t o a benefi t if under the provisions of a 

( 1 ) Th e benefi t wa s i n pa y statu s o n th e terminatio n dat e o f th e plan . 

( 2 ) Th e benefi t is payabl e i n a n optiona l life-annuit y for m o f benefi t tha t th e participan t o r 

beneficiar y electe d o n o r befor e th e terminatio n dat e o f th e pla n or , i f later, th e dat e o n 

whic h PBG C becam e statutor y truste e o f th e plan . 

( 3 ) Excep t fo r a benefi t describe d i n paragrap h (a)(2 ) o f this section , befor e th e terminatio n 

dat e .. . th e participan t ha d satisfie d th e condition s o f th e pla n necessar y t o establis h th e 

righ t t o receiv e th e benefi t prio r t o suc h dat e . . . othe r tha n applicatio n fo r th e benefit , 

satisfactio n o f a waitin g perio d describe d i n th e pla n o r retirement ; o r 

( 4 ) Absen t a n electio n b y th e participant , th e benefi t woul d b e payabl e upo n retirement . 

(Emphasis added.) 

B. Relevant Plan provisions 

T h e Pla n documen t i n effec t whe n th e Delph i Hourl y Pla n terminate d wa s th e Delph i 

Hourly-Rate d Employees ' Pensio n Plan , effectiv e Octobe r 1 , Al l define d benefi t 

pensio n plan s lik e th e Delph i Hourl y Pla n mus t provid e th e pensio n benefits o f participants i n 

t h e for m o f a qualifie d join t an d survivo r annuit y A QJS A is a n annuit y fo r th e lif e 

o f th e participan t an d a survivo r annuit y fo r "th e lif e o f [th e participant's] spouse " tha t is at least 

5 0 percen t o f th e amoun t o f th e annuit y payabl e fo r th e join t live s o f th e participan t an d spouse. 1 

T h e Plan' s QJS A is th e J&65%S A for m o f benefi t as describe d i n Pla n Sectio n 5. I t is a n 

annuit y fo r th e lif e o f a participan t an d a survivo r annuit y fo r th e "designate d spouse " tha t is at 

least 5 0 percen t o f th e amoun t o f th e annuit y payabl e fo r th e join t live s o f th e participan t an d 

spouse. 1 8 I f a participan t predecease s his designate d spouse , th e designate d spous e receive s th e 

survivor' s benefi t (i.e. , 65 % o f th e join t benefit ) fo r th e spouse's remainin g lifetime . I f a spous e 

predecease s th e participant , th e participant's benefi t increase s t o a n amoun t equa l t o wha t th e 

participan t woul d hav e receive d absen t th e survivo r election . Becaus e th e participant's benefi t 

 2 9 CF R § 4022.4(a) . Th e regulatio n lists five conditions, bu t th e fifth conditio n (sectio n 4022.4(a)(5) ) involve s a 

"benefi t tha t return s al l o r a portio n o f a participant's accumulate d mandator y employe e contribution s upo n death. " 

W e di d no t includ e this condition , as th e Pla n di d no t accep t o r requir e employe e contributions . 

 See Enclosur e 3 fo r a cop y o f th e relevan t Delph i Hourl y Pla n provisions . 

 ERIS A § 205(a)(1) . 

 ERIS A § 205(d)(1) . 

 See Enclosur e 3 , Articl e Sectio n 5(a) . Althoug h th e 200 3 Pla n doe s no t defin e "designate d spouse, " i t state s i n 

Sectio n 5(b) : "Th e beneficiar y o f a survivo r benefi t electio n shal l b e onl y th e perso n wh o is th e employee' s spous e 

a t suc h tim e an d wh o ha s bee n suc h spous e fo r a t least on e yea r immediatel y prio r t o th e effectiv e dat e o f suc h 

election. " 

8 
"pop s up " automaticall y o n th e deat h o f a spouse , th e retiremen t typ e is sometime s referre d t o as 

t h e J&65%S A wit h Pop-up . 

T h e wit h Pop-u p wa s th e defaul t for m o f benefi t fo r marrie d participants. 

Sectio n 5(a ) o f th e Pla n provide s that , upo n retirement , a marrie d participan t "shal l b e deeme d t o 

hav e electe d automaticall y a reduce d amoun t o f monthl y basi c benefit " t o provid e " a survivo r 

benefit " fo r his "designate d spouse." 1 9 Unde r ERISA , pensio n plan s mus t allo w participants t o 

waiv e th e QJS A durin g th e "applicabl e electio n period " so lon g as th e participant's spous e 

consents writin g t o th e electio n an d th e spouse's consen t is witnesse d b y a notar y

A s require d unde r ERISA , th e Pla n allowe d a participan t t o waiv e th e J&65%S A for m o f 

benefi t unde r Sectio n 5(a ) b y obtainin g his o r he r spouse's notarize d writte n consen t withi n th e 

statutor y electio n perio d befor e retirement . Th e Pla n establishe d guideline s fo r th e effectiv e dat e 

o f th e electio n an d th e right , wit h spousa l consent , t o preven t th e automati c electio n o f th e 

 fro m bein g effective , as follows : 

• Th e automati c electio n provide d i n this subsectio n (a ) shal l becom e effectiv e 

o n th e late r o f (i ) th e commencemen t dat e o f th e employee' s monthl y benefit . 

. . o r (iii ) th e one-yea r anniversar y o f th e marriage ; an d 

• A n employee , wit h th e writte n consen t o f th e spous e (witnesse d b y a notar y 

public) , ma y 'preven t th e automati c election ' o f th e benefi t provide d i n 

Sectio n 5(a ) b y submittin g a notarize d electio n for m t o th e Delph i Pla n withi n 

t h e 90-da y perio d prio r t o th e effectiv e dat e o f th e automati c election. 2 1 

d i d no t elec t t o waiv e (wit h consent ) th e J&65%S A for m o f benefi t befor e his 

retiremen t i n 2006 .

T h e Pla n provide d severa l option s tha t permitte d participants t o chang e thei r for m o f benefi t 

afte r retirement . Fo r example , eve n i f a participan t electe d th e automati c for m fo r marrie d 

participants, i.e. , th e J&65%S A wit h Pop-up , th e survivo r benefi t electio n is no t necessaril y final 

unde r th e Plan . Sectio n 5(a ) o f th e Pla n permitte d a n employe e t o cance l th e survivo r benefi t 

electio n unde r th e followin g circumstances: 

 th e even t (1 ) * * (2 ) [employee and designated spouse] are 

divorced by court decree an d (i ) a Qualifie d Domesti c Relation s 

Orde r withi n th e meanin g Sectio n 414(p ) s o provides, o r 

(ii ) written consent of the former spouse which acknowledges the 

effect of the cancellation and is witnessed by a notary public is 

 See Enclosur e 3 , Articl e II , Sectio n 5(a) . 

 ERIS A § 205(c) . 

 See Enclosur e 3 , Articl e II , Sectio n 5(a) . Th e Pensio n Protectio n Ac t o f 200 6 (Pub . L . No . 109-280 ) increase d 

t h e "applicabl e electio n period " fo r benefi t election s from 9 0 day s t o days, wit h this chang e takin g effec t fo r 

pla n years beginnin g afte r Decembe r 31 , 2006 . Thi s legislativ e chang e thu s too k effec t retired . Befor e 

t h e Delph i Pla n terminated , Delph i amende d th e 200 3 Pla n t o incorporat e th e change s require d b y th e Pensio n 

Protectio n o f 2006 . 

9 
obtained, such employee may cancel the survivor benefit election 

and have the monthly basic pension benefit restored to the amount 

payable without such election, effectiv e . . . (ii ) th e first da y o f th e 

thir d mont h followin g th e mont h i n whic h th e Corporatio n receive s 

suc h employee' s writte n revocatio n o f th e electio n becaus e o f 

divorce , o n a for m approve d b y th e Corporatio n an d accompanie d 

b y evidenc e satisfactor y t o th e Corporatio n o f a fina l decre e o f 

divorce . 

(Emphasi s added.) 2 2 

Thus , th e Delph i Hourl y Pla n allowe d a divorce d participan t t o cance l th e survivo r benefi t 

electio n upo n submittin g eithe r a (1 ) Qualifie d Domesti c Relation s Orde r ("QDRO"); 2 3 o r (2 ) th e 

forme r spouse's written , notarize d consen t t o th e survivo r benefi t cancellation . Unde r th e Plan's 

terms, i f a divorce d participan t me t eithe r on e o f thes e condition s (i.e. , a QDR O o r waiver) , th e 

survivo r benefi t electio n is canceled , an d th e participant's benefi t is "restore d t o th e amoun t 

payabl e withou t suc h election. " Althoug h th e J&65%S A wit h Pop-u p is th e automati c for m o f 

benefi t payabl e t o marrie d participants, i.e. , th e for m o f benefi t payabl e withou t a marrie d 

participant's election , th e Pla n administrato r construe d Sectio n 5(a ) t o mea n tha t th e participant's 

benefi t woul d b e restore d t o th e amoun t payabl e t o a n unmarrie d participant . 

Lik e th e Plan' s provisio n cancelin g th e survivo r benefi t electio n unde r Sectio n 5(a), th e Pla n 

als o permitte d participants t o elec t survivin g spous e coverag e afte r retiremen t unde r certai n 

circumstances. A s reference d abov e i n th e lette r o f Januar y unde r Sectio n 8 o f th e 

Plan , a participan t wh o wa s singl e a t retiremen t bu t late r remarrie d coul d elec t survivin g spous e 

coverag e fo r his o r he r ne w spous e withi n month s o f Alternatively , a participan t 

w h o wa s marrie d a t retiremen t bu t wh o late r cancele d th e survivo r benefi t electio n unde r Sectio n 

5(a ) an d subsequentl y remarrie d coul d elec t survivin g spous e coverag e fo r his o r he r ne w 

spouse. 2 5 Becaus e a participant's electio n unde r Sectio n 8 woul d requir e th e Pla n t o chang e th e 

for m o f benefi t from a straigh t lif e annuit y t o a QJSA , a reannuitizatio n o f th e participant's 

benefi t woul d b e

 See Enclosur e 3 , Articl e II , Sectio n 5(a ) (emphasis added). See also Delph i Hourl y Pla n Summar y Pla n 

Descriptio n ("I f You r Spous e Die s o r Yo u Ar e Divorce d Afte r a t 97 , provide d as Enclosur e 4 . 

 Generally , a QDR O is a domesti c relation s orde r issue d b y a stat e domesti c relation s cour t tha t assign s al l o r a 

portio n o f benefits wit h respec t t o a participan t unde r a pensio n pla n t o a n alternat e payee , wh o ma y b e a forme r 

spouse , an d whic h meets certai n othe r requirement s unde r ERISA . See ERIS A § 206(d)(3)(B) ; Interna l Revenu e 

Cod e § (paralle l Cod e provision) . 

 See Enclosur e 3 , Articl e Sectio n 8(g ) o f th e Plan . 

 See id. I f th e participan t adde d hi s o r he r ne w spous e t o healt h car e o r lif e insuranc e coverag e withi n 1 2 month s 

o f th e marriag e o r remarriage , th e participan t woul d b e deeme d t o hav e automaticall y electe d survivin g spous e 

coverage , effectiv e o n th e one-yea r anniversar y o f th e marriage . 

 Cf, Final Rule Relating to Time and Order of Issuance of Domestic Relations Orders, 7 5 Fed . Reg . 32846 , 3284 8 

(Jun e 10,2010) . 

1 0 
C. Prior decisions of the Appeals Board 

I n previou s appeals involvin g Sectio n 5(a ) o f th e Delph i Hourl y Pla n an d th e Delph i 

Salarie d Plan , th e Appeals Boar d considere d whethe r a divorce d participant's cancellatio n o f th e 

survivor' s benefi t electio n is a "built-in " featur e o f th e J&65%S A wit h Pop-u p or, instead , results 

i n a subsequen t chang e i n benefi t form. 2 7 Th e Boar d decide d tha t th e cancellation/restoratio n 

featur e o f Sectio n 5(a ) is no t a "built-in " featur e o f th e J&65%S A lik e th e increas e i n th e 

participant's benefi t upo n th e spouse's th e "pop-up " featur e o f th e J&65%SA . Th e 

Boar d conclude d tha t th e featur e is distinguishabl e fro m th e "pop-up " 

featur e o n deat h fo r tw o reasons. First , i n th e case o f a spous e wh o predecease s th e participant , 

t h e spous e is neve r diveste d o f th e survivo r benefi t tha t wa s electe d a t retirement . Second , unlik e 

t h e "pop-up " feature , th e cancellation/restoratio n featur e is no t triggere d b y th e spouse's death , 

a n involuntar y occurrence . Rather , th e participan t mus t mee t on e o f tw o condition s impose d 

unde r th e Plan , i.e. , a QDRO , o r a written , notarize d spousa l waiver , bot h o f whic h ma y b e 

oppose d b y th e participant's spouse . 

T h e Boar d furthe r decide d tha t th e cancellatio n o f th e survivo r benefi t electio n wa s a chang e 

i n benefi t for m prohibite d b y PBG C regulation s fo r a t least tw o reasons. Th e Boar d observe d 

tha t th e feature s o f th e Plan' s indicate d tha t i t wa s intende d t o b e th e Plan's QJS A 

unde r ERISA , whic h provide s a "survivo r annuit y fo r th e lif e o f th e spouse." 2 8 I f th e survivo r 

benefi t is cancele d unde r Sectio n 5(a) , th e Boar d reasoned , i t ca n n o longe r b e a QJS A unde r 

ERISA . Additionally , i f th e survivo r benefi t is canceled , th e divorce d participant's benefi t 

increase s fo r his o r he r creatin g a straight-lif e annuit y for m o f benefi t wit h a 

n e w effectiv e date. 2 9 Althoug h th e previou s appeals involve d QDROs , th e Board' s decisio n 

expressl y applie d wit h equa l forc e t o a written , notarize d spousa l waiver , whic h is th e subjec t o f 

this appeal. 3 0 

 See e.g., "Delph i Hourly-Rat e Employee s Pensio n Pla n

 (Las t visite d Apri l

 ERIS A § 205(d)(1)(A) . 

 Notin g tha t th e "restoration " o f th e benefi t is effectiv e o n "th e first da y o f th e thir d mont h followin g th e mont h i n 

whic h th e Corporatio n receive s suc h employee' s writte n revocatio n o f th e electio n becaus e o f divorce, " th e Boar d 

viewe d th e participan t as receivin g a ne w "annuit y startin g date " withi n th e meanin g o f ERIS A § 205(h)(2) , bu t di d 

n o t find tha t a reannuitizatio n woul d b e required , as i t woul d b e fo r th e electio n unde r Sectio n 8 o f th e Plan . 

 I n previou s appeals involvin g divorce d participants unde r th e Delph i Hourl y an d Salarie d Plans, th e Appeal s 

Boar d decide d tha t domesti c relation s orders ("DRO" ) compellin g waive r o f a spouse's survivo r benefi t coul d no t b e 

QDRO s unde r ERISA . I n upholdin g PBGC' s determination s denyin g th e cancellation s o f survivo r benefi t elections, 

t h e Boar d relie d i n par t o n th e Suprem e Court' s decisio n i n Kennedy v. Plan V for DuPont Sav. & Plan, 

whic h hel d tha t a QDR O is no t a vali d metho d o f effectin g a spousa l waive r o f survivo r benefits unde r ERISA .

U.S . 285 , 296-29 7 (2009) . 

1 1 
VII. Analysis of appeal 

A. PBGC cannot guarantee the increase in benefit resulting from the posttermination cancellation of the survivor benefit election 

A s state d above , unde r PBGC' s regulations, PBG C guarantee s a pensio n benefi t (subjec t t o 

statutor y limits ) i f th e benefi t is, o n th e plan's terminatio n date , (1 ) a nonforfeitabl e benefit ; (2 ) 

t h e benefi t is a pensio n benefit ; an d (3 ) th e participan t is entitle d t o th e benefit. 3 1 I n this appeal, 

t h e Boar d focuse s onl y o n th e first an d thir d requirements. Sectio n o f ERIS A define s 

t h e ter m "nonforfeitabl e benefit. " PBG C regulation s address whe n a participan t is entitle d t o a 

benefit . 

I. The increased benefit resulting cancellation of the survivor benefit 

election is not a nonforfeitable benefit 

clai m unde r Sectio n 5(a ) o f th e Pla n is base d o n purporte d waive r o f he r 

survivor' s benefi t unde r th e parties' judgmen t o f divorce . di d not , however , obtai n a 

separat e written , notarize d waive r o f th e survivor' s benefi t tha t acknowledge s th e effec t o f th e 

cancellation , as require d unde r Sectio n 5(a ) o f th e Plan , an d th e Plan' s administrato r woul d hav e 

require d hi m t o d o s o befor e approvin g his electio n t o cance l th e survivo r benefi t electio n an d 

increasin g his benefit . 

PBGC' s guarante e o f benefits unde r ERIS A extend s onl y t o benefits fo r whic h th e Plan's 

condition s hav e bee n me t befor e termination . A s explaine d above , PBG C guarantee s 

"nonforfeitabl e benefits " withi n th e meanin g o f sectio n o f ERISA . A nonforfeitabl e 

benefi t is a benefi t unde r a PBGC-insure d pla n fo r whic h th e participan t ha s me t th e condition s 

f o r entitlemen t befor e th e terminatio n dat e o f a pensio n plan. 3 2 

canno t sho w tha t th e benefi t resultin g from th e cancellatio n o f th e survivo r benefi t 

electio n is a nonforfeitabl e benefi t unde r section s an d 4022(a ) o f ERISA . T o cance l 

t h e for m o f benefi t an d receiv e a n increase d benefi t i n th e straight-life-annuit y form , 

h a d t o mee t on e o f th e condition s fo r entitlemen t unde r Sectio n 5(a ) o f th e Pla n befor e 

t h e Pla n terminate d o n Jul y 31 , 2009 . find satisfie d neithe r condition . Althoug h 

t h e Michiga n stat e cour t ordere d o n Januar y 3, , t o sig n an y documents require d b y 

eithe r G M o r PBGC , th e Pla n ha d lon g sinc e terminated , an d PBG C ha d becom e th e statutor y 

truste e unde r Titl e I V o f ERISA . Thus , a t Pla n terminatio n o n Jul y 2009 , th e Plan' s 

condition s fo r entitlemen t fo r receivin g th e straigh t lif e annuit y for m o f benefi t ha d no t bee n 

met. 3 3 A s such , th e straigh t lif e annuit y for m o f benefi t wa s not a nonforfeitabl e benefit , an d 

therefor e ineligibl e fo r PBGC' s guarantee . 

 2 9 CF R § 4022.3(a) . 

 ERIS A § 4001(a)(8) ; 2 9 CF R § 4022.3(a)(1 ) (3) . 

 Cf. 77 8 F.3 d a t 172-17 3 (participant's shutdow n benefi t di d no t becom e nonforfeitabl e becaus e 

employe e di d no t mee t conditio n o f brea k i n continuou s servic e befor e pla n termination) ; Fetty v. Pension Benefit 

Guar. Corp., 91 5 F . Supp . 230 , 23 5 (D . Col . 1996 ) (participants wh o me t al l condition s befor e pla n terminatio n dat e 

f o r 70/8 0 an d Rul e o f 6 5 benefits excep t fo r a "brea k i n Continuou s Servic e b y reaso n o f a layof f di d no t hav e 

1 2 
2. did not meet the requirements for PBGC's guarantee under PBGC's 

regulations on benefit entitlement 

I n additio n t o th e nonforfeitabl e benefi t requiremen t unde r ERIS A § ha d 

t o b e entitle d t o th e benefi t unde r sectio n 4022.4(a ) o f PBG C regulations. Th e regulatio n state s 

tha t a participan t is entitle d t o a benefi t "if under the provisions of a plan," th e participan t meets 

o n e o f th e condition s unde r th e regulation. 3 4 Th e Appeals Boar d liste d fou r condition s fo r 

entitlemen t above , an d w e address the m separatel y here . 

T h e first conditio n o f th e regulatio n is that , unde r th e provision s o f th e Plan , th e benefi t wa s 

i n pa y statu s o n th e tenninatio n dat e o f th e Plan. 3 5 Althoug h th e J&65%S A benefi t wa s i n pa y 

 benefi t t o whic h wa s clearl y straigh t lif e annuit y for m o f benefi t 

w a s no t i n pa y statu s whe n th e Pla n terminated . canno t satisf y this conditio n o f th e 

regulation . 

T h e secon d conditio n o f th e regulatio n specifie s that , unde r th e provision s o f th e Plan , th e 

benefi t is payabl e i n a n optiona l life-annuit y for m tha t th e participan t electe d o n o r befor e th e 

terminatio n date. 3 6 A s explaine d above, . electe d th e Plan' s norma l for m o f benefi t fo r 

marrie d participants, th e whic h wa s i n pa y statu s befor e th e Plan' s terminatio n date ; 

b u t h e di d no t elec t (wit h consent ) th e straight-life-annuit y for m o f benefi t befor e th e 

Plan' s terminatio n date . seek s t o J&65%S A for m o f 

benefi t t o th e straight-life-annuit y for m o f benefit . canno t satisf y this conditio n o f th e 

regulation . 

Lik e th e definitio n o f a "nonforfeitabl e benefit " unde r sectio n 4001(a)(8 ) o f ERISA , th e 

thir d conditio n o f th e regulatio n specifie s that , unde r th e provision s o f th e Plan , a participan t ha s 

satisfie d th e plan's condition s necessar y t o establis h th e righ t t o receiv e th e benefi t o n o r befor e 

t h e plan' s terminatio n date , othe r tha n applyin g fo r th e benefi t o r satisfyin g a waitin g period. 3 7 

A s above , th e Pla n require d th e participan t t o obtai n eithe r a QDR O o r a writte n 

spousa l waive r witnesse d b y a notar y publi c t o cance l th e J&65%S A for m o f

retire d an d commence d hi s J&65%S A benefi t effectiv e Septembe r 1 , an d 

divorce d effectiv e Ma y 8 , . W e find no t presen t th e Plan' s administrato r 

wit h eithe r a QDR O (whic h woul d no t hav e suffice d unde r th e Board' s previou s decisions) o r a 

written , notarize d spousa l waive r befor e th e Plan' s terminatio n o n Jul y 2009 . Becaus e 

d i d no t mee t eithe r conditio n befor e th e Plan' s terminatio n date , h e canno t satisf y this 

conditio n o f th e regulations. 

nonforfeitabl e benefits) ; Moore v . Pension Ben. Guaranty Corp., 56 6 F . Supp . 534 , 53 5 (E.D . Pa . 1983 ) (Participan t 

d i d no t mee t condition s a t pla n terminatio n dat e fo r 30-yea r benefi t becaus e o f seven-mont h shortfal l i n service) . 

 2 9 CF R § 4022.4(a ) (emphasis added) . 

 2 9 CF R § 4022.4(a)(1) . 

 2 9 CF R § 4022.4(a)(2) . 

 2 9 CF R § 4022.4(a)(3) . 

13 
T h e fourt h conditio n specifie s that , unde r th e provision s o f th e Plan , th e benefi t woul d b e 

payabl e upo n retirement , i n th e absenc e o f a n electio n o f a differen t othe r words , th e 

benefi t tha t woul d b e payabl e o n retiremen t as th e normal , automati c for m o f benefit. 3 8 Th e 

 is th e automati c for m o f benefi t unde r th e Pla n fo r marrie d participants at 

 th e straigh t lif e annuit y form . Th e straigh t lif e annuit y for m o f benefi t (withou t 

t h e survivo r benefit ) is no t th e benefi t tha t woul d hav e bee n payabl e upo n retiremen t fo r a 

marrie d participant , absen t a n electio n an d spousa l waiver . canno t satisf y this conditio n 

o f th e regulation . 

I n summary , th e Appeal s Boar d conclude s tha t PBG C doe s no t guarante e th e straigh t lif e 

annuit y for m o f benefi t unde r th e Plan , i f obtaine d post-terminatio n throug h cancellatio n o f th e 

survivo r benefi t electio n unde r Sectio n 5(a ) o f th e Plan . PBG C guarantee s J&65%S A 

for m o f benefit , whic h is i n pa y status. 

13. for fai l becaus e h e di d 

n o t obtai n waive r th e befor e i t

I n . appeal , yo u conten d tha t - waive d al l claim s against pensio n i n th e 

parties' divorc e proceeding s an d shoul d no t b e entitle d t o th e survivo r benefi t unde r 

J&65%S A benefit . Yo u bas e argument , i n part , o n th e followin g paragrap h i n th e 

Judgmen t o f Divorce , whic h wa s entere d o n Ma y 8, : 

Tha t Plaintif f an d Defendan t shal l eac h receive , fre e an d clea r o f an y clai m 

o f th e other, an y presen t an d al l futur e pension , annuities, profi t sharing , 

 an d retiremen t benefi t plan s i n thei r respectiv e names. 

Y o u stat e tha t th e Michiga n stat e cour t issue d a n orde r clarifyin g th e court's inten t no t t o 

giv e an y benefi t unde r pensio n pla n an d orderin g t o sig n an y instrumen t 

necessar y t o effectuat e th e parties' intent . Yo u argu e tha t a party's waive r o f benefits is no t

empte d unde r ERISA , citin g Maclnnes v. Maclnnes?9 Th e Appeal s Board' s decisio n is not , 

however , base d o n ERISA' s preemptio n o f purporte d waive r o f he r survivor' s benefi t i n 

t h e parties' divorc e decree . Rather , th e Board' s decisio n is base d o n th e term s o f th e Pla n an d 

t h e provision s o f Titl e I V o f ERISA . 

Befor e th e Pla n terminated , th e Pla n admimstrato r coul d no t hav e approve d 

electio n t o cance l survivo r benefi t unde r sectio n 404(a)(1)(D ) o f withou t 

 Whil e th e o f divorc e recite d tha t an d woul d receiv e presen t an d 

futur e pensions, etc., i n thei r respectiv e names, th e judgmen t o f divorc e di d no t specificall y 

includ e th e requirements o f a waive r unde r Sectio n 5(a ) o f th e Plan , i.e. , "written consent the 

 4022.4(a)(4) . 

 26 0 Mich . App . 67 7 NW2 d 88 9 (2004) . 

 See Plan for DuPont &Inv. Plan, 55 5 U.S . 30 0 (2009) . Th e Cour t rejecte d th e 

argumen t tha t ERISA' s anti-alienatio n rul e preempte d federa l commo n la w waiver s o f benefits bu t hel d tha t suc h 

waiver s di d no t trum p th e Pla n administrator' s obligatio n t o follo w th e pla n document s unde r sectio n 404(a)(1)(D ) 

14 
former spouse which acknowledges the effect of the cancellation and is witnessed by a notary 

public." 

Afte r th e Pla n terminated , PBG C coul d n o longe r waiver . Unde r Titl e I V o f 

ERISA , PBG C guarantee s onl y "nonforfeitabl e benefits " o f terminate d pensio n plans, as 

describe d i n sectio n 4022(a ) o f ERISA . Th e Boar d ha s explaine d wh y th e increase d benefi t 

unde r Sectio n 5(a ) is no t a "nonforfeitabl e benefit" : ' di d no t satisf y th e condition s fo r th e 

benefi t unde r th e written , notarize d th e Plan' s terminatio n 

dat e o f Jul y 2009 . als o coul d no t satisf y th e requirements unde r PBGC' s regulatio n 

o n benefi t entitlement . 

Y o u als o assert tha t this cas e is distinguishabl e from cases lik e Vanderkam Pension 

Benefit Guar. Corp., becaus e waive r wa s voluntar y an d undisputed. 4 1 Th e Appeals Boar d 

agree s tha t appea l ma y b e distinguishabl e from Vanderkam an d simila r cases, bu t fo r 

differen t reasons. 4 2 Th e appeals courts i n fou r circuits, includin g th e D.C . Circuit , hav e hel d tha t 

t h e spous e o f a participan t wh o retire s wit h a QJS A acquire s a vested right i n th e survivo r benefi t 

tha t canno t b e waived . Th e pensio n plan s involve d i n thos e cases di d not , however , expressl y 

permi t retire d divorce d participants t o cance l a previou s survivo r benefi t electio n wit h their 

spouses' written , notarize d consent . Base d o n ou r research , th e federa l courts hav e no t 

considere d th e validit y o f a spouse's post-retiremen t waive r o f th e survivor' s benefi t wher e a n 

ongoin g pensio n pla n expressl y permitte d suc h change s afte r th e participant's retirement . 

Whethe r th e federa l courts woul d permi t waive r o f th e survivor' s benefi t i n a n ongoin g 

pensio n pla n is no t clear, bu t th e Appeals Boar d nee d no t decid e th e questio n fo r th e purpose s o f 

: appeal . appea l involve s th e waive r o f survivo r benefi t i n a terminate d 

pla n an d is governe d b y Titl e I V o f ERIS A an d PBG C regulations. Whil e th e Boar d canno t 

gran t th e relie f requeste d i n th e appeal, " J&65%S A wit h Pop-u p benefi t is a 

nonforfeitabl e benefi t t o whic h h e is entitle d unde r sectio n 4022(a ) becaus e h e ha d me t th e 

condition s fo r entitlemen t unde r th e Pla n befor e th e Pla n terminated . 

 Summary PBGC-payable benefit 

A. no longer has a net overpayment of benefits to be recouped 

T h e Pla n terminate d o n Jul y 2009 , wit h insufficien t assets t o fun d al l benefits. Whe n 

PBG C become s statutor y truste e o f a terminate d plan , PBG C continue s t o pa y retiree s th e sam e 

benefi t the y wer e receivin g from th e plan' s administrato r unti l ca n collec t pla n records, 

audi t pla n data , an d determin e guarantee d benefi t amounts. 

 94 3 F . Supp . 2 d (D . D.C . 2013) , F.3 d 883 , 88 6 (D.C . Cir . 2015) . 

 See Carmona v. Carmona, 60 3 F.3 d 1041 , 1059-106 0 Cir . 2010) ; Rivers v . Cent. & S.W. Corp., 18 6 F.3 d 681 , 

683-68 4 (5 t h Cir . Hopkins v. Solutions. Co., 10 5 F.3 d (4 t h Cir . see also 

Anderson v. Marshall, 85 6 F . Supp . 604 , 60 7 (D . Kan . (cour t hel d that , afte r th e participan t retired , th e 

electio n o f th e QJS A "becam e irrevocabl e an d coul d no t b e change d throug h waive r b y th e designate d 

beneficiary.") . 

15 
I f ne t benefits pai d t o a pensio n pla n participan t i n a PBGC-trustee d pla n excee d th e tota l 

amoun t t o whic h th e participan t is entitle d unde r Titl e f V o f ERISA , PBG C wil l recou p th e ne t 

overpaymen t b y reducin g th e participant's futur e PBG C benefi t payments. 4 3 I n general , PBG C 

use s a pensio n plan's terminatio n dat e as th e startin g dat e fo r determinin g th e amoun t o f a 

participant's ne t

PBG C record s indicat e tha t . commence d receivin g $2,910.0 8 pe r mont h o n his ART ) 

o f Septembe r . Afte r th e Pla n terminate d o n Jul y 2009 , PBG C (throug h its temporar y 

payin g agent, Fidelit y Investments ) too k ove r benefi t payments effectiv e Augus t 1 , 2009 . PBG C 

continue d t o pa y hi m throug h Februar y 1 , 2010 , th e sam e amoun t ($2,910.0 8 pe r month ) tha t th e 

Plan' s administrato r pai d him . PBG C record s furthe r indicat e tha t PBG C estimate d th e effec t o f 

ERISA' s lega l limit s o n benefi t unde r th e Pla n an d reduce d his benefi t amoun t t o 

$1,524.2 3 pe r mont h startin g Marc h 1 , 2010 , t o avoi d th e possibilit y o f larg e overpayments. 

• A s note d above , PBG C determine d tha t is entitle d t o pe r mont h befor e 

Augus t 1 , Becaus e h e receive d $2,910.0 8 pe r mont h fro m Augus t 1 , 2009 , throug h 

Februar y 1 , h e receive d benefi t overpayments fo r seve n months . als o receive d 

benefi t underpayments o n an d afte r Marc h 1 , Becaus e PBG C ha s continue d t o pa y 

less tha n his monthl y benefi t entitlemen t o f th e ne t overpaymen t o f $

reference d i n th e determinatio n letter , ha s bee n repai d and , as o f Ma y ther e is a ne t 

underpaymen t o f

I n th e tabl e below , w e sho w ho w w e calculate d ne t underpaymen t o f $ as 

 Ma y 1,2018 : 

Table Benefit Underpayment Calculation 

 s 

Monthly 

Amount 

 Payable 

Monthly 

 

(( 

 , 

Monthly 

Underpayment 

 

Paid 

Total 

 

Underpayment) 

8/01/200 9 -

2/01/201 0 $2,910.0 8 $1,631.1 9 $1,278.8 9 N / A 1 ($8,952.23 ) 

3/01/2010 ¬

05/01/201 8 $1,524.2 3 $1,631.1 9 N / A $106.9 6 99 $10,589.0 4 

$1,636.81 

 pa y o f plu s interest . H e wil l receiv e his 

correc t benefi t entitlemen t o f beginnin g o n Jun e

 2 9 CF R §

 4022.81(c) . 

1 6 
B. may be entitled to Top-up payments from GM 

PBGC' s websit e include s a webpag e containin g "Frequentl y Aske d Questions " abou t GM' s 

top-u p benefits. 4 5 Th e followin g respons e addresse s ho w G M wil l address PBG C overpayments 

afte r th e Plan' s terminatio n dat e o f Jul y 2009 : 

t 

 paymen t o f th e Delph i pla n benefi t t o a participan t o r 

beneficiar y is separat e fro m GM' s contractua l obligatio n t o pa y a 

top-u p benefi t t o tha t person , I n othe r words , PBGC' s benefitpaymen t relationshi p is wit h th e participant , no t GM . B y law , 

PBG C canno t recou p overpayments fro m someon e othe r tha n th e 

participant . 

Note : An y pla n benefits pai d afte r Jul y 2009 , th e dat e th e pla n 

terminate d - whethe r th e paymen t cam e fro m Fidelit y o r directl y 

fro m PBG C - ar e considere d whe n determinin g an y overpaymen t 

o r underpaymen t amount . 

T h e webpag e furthe r explains, however , tha t G M is generall y expecte d t o mak e u p th e 

amoun t tha t PBG C recoup s fiom participants: 

I n th e o f instances, th e recoupmen t is attributabl e t o 

amount s tha t PBG C wa s payin g abov e wha t w e ar e legall y abl e t o 

pay . Wher e G M determine s tha t thes e amount s shoul d hav e bee n 

pai d b y them , as par t o f th e top-u p benefit , the y wil l 'make-up ' th e 

amoun t o f you r benefi t tha t is reduce d b y th e recoupment . 

(Se e Enclosur e 5.) 

Althoug h n o longe r ha s a ne t benefi t overpaymen t t o b e recoupe d fro m his futur e 

benefi t payments , PBGC' s overpayment s t o hi m fiom Augus t 1 , 2009 , throug h Februar y 1 , 2010 , 

reduc e hi s ne t underpaymen t an d henc e th e amoun t o f his PBG C backpayment . I n addition , 

PBG C is no t guaranteein g th e increase d benefi t tha t coul d hav e realize d b y cancelin g th e 

survivo r benefi t electio n befor e Pla n tenninatio n wit h written , notarize d waiver . G M 

mus t determin e th e amoun t o f an y top-u p o r othe r benefits du e t o . Pleas e contac t th e G M 

Benefits Cente r a t 1-800-489-4646 . 

EX. Decision 

F o r th e reason s explaine d above , th e Appeals Boar d foun d n o basis fo r changin g PBGC' s 

determinatio n o f Septembe r 27 , Therefore , w e ar e denyin g ; appeal . Thi s is th e 

agency's final decisio n o n this matte r an d h e may , i f h e wishes , see k revie w o f this decisio n i n a n 

appropriat e Unite d State s Distric t Court . 

 See (Delph i Hourl y Pensio n Plan : PBG C 

Over - an d Underpayment s an d GM' s Top-U p Benefits) . A cop y o f thi s webpag e is provide d a t Enclosur e 5. 

1 7 
I f hav e questions, pleas e cal l PBGC' s Custome r Contac t Cente r a t 1-800-400-7242 . 

Sincerely , 

Enclosure s (5) : 

 Pensio n Electio n Confirmatio n Statemen t ( 5 pages) 

2 . Revise d Benefi t Deteiminatio n Statemen t date d Marc h 30 , ( 7 pages) 

 Excerp t o f th e Delph i Hourly-Rat e Employee s Pensio n Pla n pages) 

4 . Delph i Hourl y Pla n Summar y Pla n Descriptio n ( 6 pages) 

5. PBG C websit e pag e o n GM' s Top-U p payment s ( 4 pages) 

 enclosures: 

 w/ o enclosures: 

1 8