4% Pension Benefit Guaranty Corporation PBGC 1200 K Street, N.w., Washington, D.C. 20005-4026 

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April 29, 2005 

Re: 1 Case Number 196153 

McCook Metals, LLC Pension Plan for Hourly Employees 

(the "McCook Plan") 

The Appeals Board has reviewed your appeal of PBGC's 

February 4, 2005 determination of your guaranteed McCook Plan 

benefit. As explained below, we found no basis for changing PBGC's 

determination. 

Benefit Determination and A~peal 

PBGC determined your PBGC benefit is $957.00' per month 

through August 1, 2005, and $315.46 per month thereafter. Your 

benefit is a Joint and 50% Pop-up Survivor Annuity. PBGC explained 

your $957.00 and $315.46 benefits will be temporarily reduced 10% 

until your overpayments have been repaid. You will not be charged 

interest on your overpayments. 

In your arch 12, 2005 appeal: 

You asked PBGC to pay you the McCook Plan's 70/80 Retirement 

benefit. 2 

We explain below PBGC is already paying you a 70/80 Retirement 

benefit. PBGC is paying less than your full benefit only 

because the law limits PBGC's guarantee. 

You asked PBGC to increase your McCook-only service from 3.75 

years to 4 years. You asked whether the increase to 4 years 

would cause PBGC to pay 80% of your accrued benefit instead of 

60%. 

We explain below the McCook Plan benefit formula does not use 

your exact McCook-only service. Instead, the McCook Plan 

uses: (i) your combined Reynolds and McCook Service, and (ii) 

your benefit under a Reynolds Metals pension plan (the 

$1,595.00 accrued benefit x 60% guarantee 

named "70/80 Special Early Retirement" in the McCook Plan 

document, and described elsewhere as the "70/80 Special Pension" 
"Reynolds Plan" 3, . Your McCook-only service, whether 3.75 

years or 4 years, does not affect PBGC' s 60%-guarantee of your 

McCook-Plan accrued benefit. 

70/80 Retirement Benefit Calculation 

70/80 Lifetime Annuity Reduced by Reynolds Plan Benefit 

The 70/80 Retirement provides a lifetime annuity, including a 

"Pension Factor" permanent supplement, plus a $400.00 per month 

temporary supplement until age 62. See Enclosure 1 pages 8-12. The 

total lifetime annuity is reduced by your Reynolds Plan Accrued 

Benefit. See Enclosure 1 pages 8. Because you earned less than 30 

years service, your Reynolds Plan Accrued Benefit must be reduced 

if started before age 62. Thus, until age 62 the McCook Plan pays 

your full 70/80 lifetime annuity without a Reynolds Plan offset. 

See Enclosure 1 page 10 paragraph 4 (a). 

Combined McCook Plan and Reynolds Plan Lifetime Annuity 

Your combined McCook-Reynolds lifetime annuity, before 

reduction for your Reynolds Plan Accrued Benefit, is $1,595.00 (29 

years total service x ($41.25 accrual rate + $13.75 Pension 

Factor permanent supplement 5, } if paid as a Straight Life Annuity. 

Your total combined lifetime annuity in your Joint and 50% Pop-up 

Survivor Annuity form is $1,515.25 ($1595.00 x .95 annuity form 

factor) per month. 

McCook Plan Lifetime Annuity Reduced for Reynolds Plan Benefit 

Your $1,515.25 per month total lifetime annuity must be 

reduced by your Reynolds Plan Accrued Benefit beginning at age 62, 

as noted above. Your Reynolds Plan Accrued Benefit offset: 

(i) is $1,041.56 ($41.25 accrual rate x 25.25 years of 

service) if paid as a Straight Life Annuity, 6 

(ii) omits the $13.75 Pension Factor permanent supplement 

accrual rate used to calculate your $1,595.00 combined McCookThe Reynolds Metals Company Pension Plan for Hourly 

Employees 

See Enclosure 1 page 8 

See Enclosure 1 page 15 

' Our records indicate Reynolds Plan administrators calculated 

the same $1,041.56 Reynolds Plan Accrued Benefit for you. 
Reynolds benefit, thus increasing your PBGC-payable McCook 

Plan benefit, 

(iii) is $989.48 ($1,041.56 x .95 annuity form factor) per 

month if paid in the Joint and 50% Pop-up Survivor Annuity 

form you chose under the McCook Plan. 

Thus, your McCook Plan 70180 Retirement lifetime annuity is 

$1,515.25 per month before age 62, and $525.77 {$1,515.25 - 

$989.48) per month beginning September 1, 2005. 

Total 70/80 Retirement Benefit with $400 Supplement 

Your 70180 Retirement benefit includes a $400.00 per month 

temporary supplement payable until age 62, as noted above. See 

Enclosure 1 pages 11-12 paragraph (9). Therefore, your total 

McCook Plan 70180 Retirement benefit is $1,915.25 {$1,515.25 + 

$400.00) per month before age' 62, and $525.77 per month after 

reaching age 62. 

Your Benef i t Service 

The McCook Plan defines service as the total quarters in which 

a participant receives any pay from the Company. You asked PBGC to 

apply the McCook Plan service formula to your benefit. PBGC 

applied that formula in: 

(i) Calculating your total service as 29 years from your 

May 21, 1973 hire date until the McCook Plancs March 31, 2002 

termination date, and 

(ii) Calculating your Reynolds Plan service as 25.25 years 

from your May 21, 1973 hire date until Reynolds sold the 

assets of its McCook Metals division in June 1998. 

PBGC calculated your McCook-only service from June 16, 1998 to 

March 31, 2002 as 3.75 (29 - 25.25) years instead of 4 years. See 

Enclosure 2. However, the exact amount of your McCook Plan service 

does not affect your McCook Plan benefit calculation. Instead, 

your benefit depends only on your total 29 years total service and 

your 25.25 years Reynolds-only service. Also, your McCook-only 

service, whether 3.75 or 4 years, is not used when determining the 

limits on PBGC's guarantee. Please see below. Therefore, 

increasing your McCook-only service to 4 years does not a£ fect your 

McCook Plan benefit or your PBGC benefit. 

Limits on PBGC's Guarantee 

The law requires PBGC to apply two limits to your guaranteed 

benefit, because the McCook Plan was not sufficiently funded for 

PBGC to pay all benefits: 
(i) PBGC may not guarantee any portion of your benefit beyond 

the amount of your Normal Retirement Benefit payable as a 

Straight Life Annuity. Therefore, only $1,595.00 of your 

$1,915.25 pre-age 62 benefit is guaranteeable. 

(ii) The McCook Plan was effective January 1, 1999, between 3 

and 4 years before the McCook Plan's March 31, 2002 

termination date. Under the lawr s "phase-in" rules,' PBGC 

may guarantee only $957.00 ($1,595.00 x 60%) of your 

guaranteeable pre-age 62 benefit, and $315.46 ($525.77 x 60%) 

of your age-62 benefit. The $957.00 and $315.46 benefits the 

Appeals Board decided are the same as PBGC determined. 

Decision 

Having applied plan provisions and the law to the facts in 

your case, we found no basis for changing PBGCrs determination. If 

you have any questions about your benefit, please contact PBGC's 

Authorized Representative at 1-800-400-7242. 

This letter concludes your administrative remedies with 

respect to PBGC's February 4, 2005 determination. You may, if you 

wish, seek court review of PBGC's determination with respect to the 

issues you raised. Thank your for your patience while we carefully 

reviewed your appeal. 

Sincerely, 

William D. Ellis 

Appeals Board Member 

Enclosures: 

(1) Excerpts from McCook Plan document (19 pages) 

(2) Benefit Statement enclosed with PBGC's February 4, 2005 

determination (3 pages) 

See 29 Code of Federal Regulations ("CFR") 54022.21(a). 

Regulation S4022.21 (a) has certain exceptions which do not apply to 

you. 

The "phase-in" rules apply if a plan terminates less than 5 

years after either its effective date or its adopted date. See 

section 4022 (b) (7) of the Employee Retirement Income Act of 1974 as 

amended ("ERISA"),. and 29 CFR 54022.24 and 54022.25. 

Your $957.00 pre-age 62 benefit includes $909.15 ($1,515.25 

x 60%) of your $1,515.25 McCook Plan permanent lifetime annuity and 

$47.85 ($957.00-$909.15) of your $400 70/80 pre-age 62 supplement.