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ProtectingAmerica'sPension

BGC··rension Benefit Guaranty Corporation s. 1200 KStreet, N.W., Washington, D.C. 20005-4026 

September 23, 2011 

Re: Appeal ~c;----

Case# 20537400, Collins & Aikman Pension Plan (the "C&A 

Plan" or "Plan") 

Dear 

We are responding to your appeal of PBGC's May 28, 2010 determination that you are 

entitled to a pension benefit of $267.99 per month payable as a Joint and 50% Survivor Annuity 

("J&50%SA"). The $267.99 amount is based on your 2008 benefit start date, when 

you were age0and.one month old, and is before PBGC's adjustment for the repayment of your 

overpayments. 

For the reasons explained below, the Appeals Board decided that your benefit should 

increase by $1.89 per month. This $1.89 increase relates to PBGC's adjustment of your benefit 

amount for the J&50%SA form you elected. Consequently, you are entitled to $269.88 per 

month before the overpayment adjustment. You are not entitled to the $331.04 estimated. 

monthly amount you currently are receiving because the C&A Plan requires a larger reduction 

for early benefit commencement than PBGC initially calculated. 

We also decided, pased on a PBGC policy that is favorable to participants in your situation, 

you may elect to change your benefit start date to a later date. If you decide to ·change your 

benefit start date, your monthly benefit will increase from the $269.88 amount but you will also 

need to interrupt your payments for at least one month. This letter provides some information to 

assist you in your decision: 

PBGC's Benefit Determination and Your Appeal 

PBGC's May 28, 2010 benefit determination letter stated you are entitled to a benefit of 

$267.99 per month in the J&50%SA form .. PBGC's letter also. said that, since the monthly 

amount you have been paid as an estimated benefit ($331.04) is more than the amount you are 

entitled to receive, you have been overpaid $1,510.90 (for payments through July 2010). PBGC 

further stated it would reduce your payments to $258.61 (a 3.50% reduction) until the 

overpayment amount has been repaid (without interest). PBGC enclosed a benefit statement that 

shows how PBGC computed your benefit and the data used in the calculation. 
1966 

'•.. 

.·: 

. . . . 

In your appeal dated, JuneD 2010, you 'claimed you are entitled to ·additional pension service 

and a larger benefit because the ItflYO, 1982 "date of hire" shown on PBGC's benefit statement 

is incorrect. 'You provided with your appeal: (1) an October 16, 1992 benefit calculation from 

Wkke~ Manufacturing Company (Enclosure 1 ), which lists your date of hire as 

and shows you had0;0 years of seryice; (2) a November 27, 1995 letter from Local 548 of the 

United Auto Workers ("UAW") that discusses yourbenefit entitlements (Enclosure 2); and (3) a · 

"Retirement Estimate'.' PBGC sent you on .M.ay 30, 2008. 1 You asked that PBGC correct your 

benefit amounts. · .. 

We forwarded your June D'2010 ·appeal to PBGC's Benefits Administration and Payment 


Department ("BAPD") for a r~sponse. In' a .letter dated July 22, 20~0, BAPD's reresentative 


stated that PBGC has updated Its r~cords to hst your correct date of hire ~ 1966), and 


PBGC provided you with a corrected benefit' statement (Enclosure 3). PBGC concluded, 


however~ that this· change in your date of hire does not result in an increase to the $267.99 


monthly benefit amount that PBGC had communicated to you on May 28, 2010. PBGC's 


July 22,2010 letter also explained that the amount of your benefitis changing because "the prior 


plan administrator used· an incorrect early retirement factor when calculating your monthly 


be:qefit." Finally, the letter stated that PBGC"must reduce your monthly payment to $257.83 to 


account for repayment of your overpayments. · · 


.In a second appeal letter dated August D 201 o, you asked for an "itemized calculation" of 


your benefit. You stated that you do. not understand how PBGC's correction of a 16-year 


difference in your date of hire ·did not result in an increase to your benefit, since "this type of 


benefit is paid on years served." You· asserted that PBGC should continue· to pay lou $331.04 


per month, or "ifit should be more please make the adjustment as soon as possible." . 


Background 

Before we explain the · calculation of your benefit, we will first provide background 


information conceniing the history of your employer, the history of the C&A Plan, the events 


leading to the termination of the C&A Plan and its trusteeship by PBGC, and PBGC's payment 


of your estimated benefit. · · 


1 This PBGC R~tirement Estimate shows that you would receive a monthly benefit of $350.51 in the J&50%SA 


form if you started payments o:q July02009. · · 
 ' . 

You also asked ip. yow: August02010 appeal: "Wliat doe~ Congress have todo with my earned b~nefit?" This 


question is in response to the statement in PBGC's July 22, 2010 letter that PBGC must reduce your monthly 


payment to· $257.83 "to account for $1,'637.00, which represents the amount of past payments that were over and 


above the limits set by Congress.•i · · · 


We concluded that the statement in PBGC's letter about "the limits set by Congress" does not apply to your 

situation. PBGC apparently included ¢.is-language because PBGC is unable .to pay some participants the full 

amount of their pension benefits because of the limits Congres's establisht;d in ERISA. In your case, however, the 

ERISA limits do not affect the amount of your benefit: Consequently, PBGC can pay you the .full amount you are 

· entitled to receive uncle~ the terms ofthe C&A Plan. · 

2 

.. / 

2 
History o(the Plan Sponsor and Pension Plan • 

On its March 31, 2007 termination date, the C&A Plan - which was sponsored by the Collins 

& Aikman Corporation ("Collins & Aikman") - covered the former hourly employees of the 

Wickes Bumper Division ("Blimper Division") of Wickes Manufacturing Company ("Wickes").3 

Before 1992, however, the BUmper Division employees were covered under a Wickes pension . 4 plan (the "Bumper Plan") that was separate from the C&A Plan. 

On July 20, 1992, the Bumper Division was sold to Composite Energy Management 

Systems, Inc ("CEMSI"), a Division of Veritas Capital, Inc. Manufacturing Company. CEMSI 

did not assume responsibility for the Bumper Plan, but instead established its own pension plan. 5 

Also, former Buinper pivision employees did not earn Credited.Service under the Bumper Plan 

after the July 20, 1992 sale date, even ifthey went to work for CEMSI. 

As the result of pension plan mergers that occurred after the July 20, 1992 sale date, the 

Bumper Plan eventually became part of the C&A Plan. 

The termination and trusteeship o(the C&A Plan 

Collins & Aikman filed a Chapter 11 bankruptcy petitipn on May 17, 2005. PBGC entered 

into an agreement with Collins & Aikman effective April 24, · 2007 that terminated the C&A 

· Plan, appointed PBGC as its trustee, and established March 31, 2007 as the C&A Plan's 

termination date. As of the C&A Plan's termination date, all of Collins & Aikman's business 

locations had eitp.er ceased operations or were in the process ofbeing sold to other entities. 

PBGC is the U~ted States government agency that insure~ pensions in accordance with Title· 

IV of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 29 United 

States Code ("U.S.C.") 1302-1461. As the C&A Plan's trustee, PBGC pays guaranteed pension 

benefits according to the plan provisions and as required by law, subject to legal limits set by 

Congress under ERISA. 

Your estimated benefit payments . 

In a May 24, 2007 letter, PBGC notified you about the termination of the C&A Plan and its 

trusteeship by PBOC. In D 2008, you contacted PBGC about starting your benefits. On 

3 The Wickes Companies had acquired Collins & Aikman, who also had sponsored pension pl~, in 1987. In 

1992, after a change in Wickes' ownership, the name of the business was changed tQ Collins & Aikman. 

4 The official name of the former Bumper Division Plan was the "Wickes Bumper Division of the Wickes 

Manufacturing Company, Grand Rapids, Michigan and UA W Local 548 Retirement Income Plan." ·This pension 

plan also is referred to as "Plan No. 115." Furthermore, the Bumper Division Plan previously was known under a 

different name when it was sponsored by the Michigan Plating and Stamping Division of Gulf & Western 

Manufacturing Company. 

5 It is the Appeals Board's understanding that the name ·of CEMSI's pension plan is "The Veritas Capital, Inc. 

· Pension Plan for Union Employees of Composite Energy Managemer;tt Systems, Inc., Grand Rapids Michigan." 

.3 

July 8, 2008, PBGC sent you calculations of your .estimated benefit amount and a benefit 

application. You and your wife completed the application and requested a benefit starting on 

2008 in the J&50%SA form. L______j 

PBGC started paying you an estimated monthly benefit of $331.04 effective 2008 

in the J&50%SA form. PBGC, in computing the $331.04 amount, relied upon a benefit 

calculation that had been provided to PBGC by the C&A Plan's former administrator. 

In addition to adjusting for the form of your benefit, the $331.04 amount is based on an 

"Early Retirement Factor" of 0.9450. Stated another way, PBGC reduced your payments by 

5.50% [1 - 0.9450 = 0.0550 = 5.50%] because you started your payments at ageD and 1 month, 

rather than at age 65. As we explain later: (1) the correct reduction factor is 0.7650 (rather than 

0.9450), which results in a reduction of 23.50% (rather than 5.50%); and (2) when the correct 

0.7650 factor is used and your benefit amount is properly .adjusted for your benefit form, your 

monthly benefit is $269.88 (rather than $331.04). 

Discussion 

The age-65 benefit you earned under the C&A Plan I 

· Accordtg ~o the documents you submitted to PBGC, you were hired by the Bumper Division 

· on August 1966 and terminated employment on July 20, 1992. After JulyD 1992, you and 

a number ofother former Bumper Division employees worked for CEMSI. 

The benefit you earned under the C&A Plan is determined based upon the terms of the 

Bumper Plan when you terminated employment.6 In 1992, Collins & Aikman calculated a 

$363.80 monthly benefit for you payable at age 65 as a Straight Life Annuity ("SLA") and based 

on the following formula: (1) your years and months of Credited Service ("CS") before January 

1, 1989 t~mes a multi?li_er of$13.75;flus (2)your years and months orcs on and after January 

1, 1989 times a multlpher of $15.50. The $363.80 amount and the above-stated formula were 

communicated to you in a December 14, 1992 letter from Collins & Aikman's Pension Manager 

(Enclosure 5). We note that Enclosures 1 and 2, which you provided with your appeal, provide 

similar information to Enclosure 5. 

Based on the Bumper Plan's formula, your age-65 benefit as a SLA equals: 

0.4 yrs. (CS before 1/1/89) x $13.75 + 3.6 yrs. (CS starting 111/89) x $15.50 = 

$308.00 +. $55.80 = $363.80 

6 The formal Wickes Bumper Plan document that applies to your benefits is the "Wickes Bumper Division of 

Wickes Manufacturing Company Grand Rapids, Michigan and UA W Local 548 Retirement Income Plan Restated 

and Effective as ofJanuary 1, 1987" ("Bumper Plan Document"). In Enclosure 4, we provide a copy of the Bumper 

Plan Document's provisions that relate to your appeal. 

7 Although we did not locate a Bumper Plan amendment that p;ovided for the $15.50 rate starting on January 1, 

1989, we concluded that such an amendment likely exists based on the communications that were made from 

Bumper Plan officials to Bumper Plan participants. 

4 
Since you were hired by the Bumpe~ Division on August. [] 1966 and terminated 

employment on July[] 1992, you had almost 26 years of employment. As shown in the 

calculations above, the Credited Serviqe_-4at Bumper Plan officials used in your benefit 

calculation c=J years (before 1/1/89).+ LJyears (starting 111189) = 26.0 years] includes your 

entire employment period with the Bumper Division. · 

We further observe that PBGC did not change the age-65 benefit amount that Collins . 

. & Aikman calculated for you. Although PBGC listed an incorrect date of hire (July 20, 1982) in 

the May 28, 2010 benefit statement, the incorrect date was the result of a typographical error 

unrelated to your benefit calculation. We apologize for the confusion caused by PBGC's listing 

of an incorrect date. 

·Additionally, your employment with CEMSI after JulyD 1992 does not affect the amount of 

your C&A Plan benefit. As provided under the Bumper Plan Document, a participant earns 

Credited Service only during the time period he is employed by the "Company," which does not 

include CEMSI. 8 

The C&A Plan's reduction for benefits starting be(ore age 65 

Under the Bumper Plan Document, a participant may qualify for one ofthe following types of 

pension benefits depending upon the participant's circumstances: (1) a "Normal Retirement 

Benefit"; (2) an "Early Retirement Benefit"; (3) a "Permanent and Total Disability Retirement 

Benefit"; or (4) a "Deferred Withdrawal Benefit". As is explained below, you did not meet the 

conditions for a Normal Retirement Benefit or for an Early Retirement Benefit, and there is no 

record that you were disabled. Consequently, the only benefit you qualified for is the Deferred 

Withdrawal Benefit. 

The Deferred Withdrawal Benefit is a less valuable benefit than the Early Retirement Benefit 

because it has a larger deduction for benefit commencement before age 65. For this reason, you 

are entitled only to a $258.61 monthly benefit (for a J&50%SA starting on August 1, 2008), rather 

than the $331.04 benefit that PBGC has been paying you. We provide below a more-complete 

explanation of our ?ndings on this issue. 

Sections 1.4 and 2.1 of the Bumper Plan Document provide that a participant is entitled to an 

unreduced Normal Retirement Benefit if he terminates employment after age 65. Section 1.5 of 

the formal Wickes Bumper Plan Document, titled "Early Retirement," provides that eligibility for 

early retirement is as follows: · 

1.5 "Early Retirement" means termination of employment of an employee for 

reasons other than disability after age sixty (60) and before age sixty-five (65), 

The Bumper Plan Document defines "Company" as the "Wickes Manufacturing Company for its Michigan 

Plating and Stamping Division." As previously indicated, Wickes changed its name to Collins & Aikman after the 

effective date of the Bumper Plan Document. We concluded that the term "Company" does not include CEMSI 

since: (1) CEMSI did not have common ownership with Collins & Aikman; and (2) CEMSI did not assume the 

pension liabilities from Collins & Aikman and established its own plan instead. 

5 


8 
. ' .> 


and after at least ten (10) years of Credited Service. After January 1,1971, Early 

Retirement shall also mean termination of employment of. an Employee for 

. reasons other than disability between age fifty-five (55) and age sixty (60) if his 

combined years of age arid years of Credited Service (to the nearest 1110 in each 

case) total eighty-five (85) or more. 

If a participant meets the requirements for an. Early Retirement Benefit, he may start 

receiving an unreduced benefit starting at age 62. Also, if the participant elects to start receiving 

the Early Retirement Benefit before age 62, the benefit is reduced by Y2 of 1% for each month 

before age 62 (which equals 6% for each year before age 62). You did not meet the conditions 

for an Early Retirement Benefit, however, because you terminated your Bumper Division 

employment in 1992 at ageD years and 1 month and with 26 years of Service. Under Section 

1.5 of the Bumper Plan Document, an Early Retirement Benefit is not available to an employee 

who terminates employment before age 55. 

Section 2.4 ofthe Bumper Plan Document provides: "An Employee whose employment with · 

the Company is terminated prior to eligibility for any other benefit under the Plan and who has 

ten (10) or more years of Service shall be eligible for a Deferred Withdrawal Benefit 

commencing at age sixty-five (65)." Section 3.4, titled "Deferred Withdrawal Benefits," states 

as follows: 

3.4 Deferred Withdrawal Benefits: 

(a) The monthly benefit of an Employee who is eligible for a Deferred 

Withdrawal Benefit shall be equal in amount to the accrued Normal Retirement 

Benefit for which he would have qualified on the date of his termination of 

employment, such accrued benefit to be computed on the basis of the Normal 

Retirement Benefit formula in effect at the date of his termination of employment, 

and shall be payable following the Employee's application for commencement of 

such benefit at or after his attainment of age sixty-five (65). 

(b) Notwithstanding subsection (a) above, an Employee eligible for such a 

Deferred Withdrawal Benefit subsequent to January 1, 1976 may elect to 

commence payment of such benefit on the first day of any month coincident with 

or following the earlier of (i) his attainment of age sixty (60) or (ii) his attainment 

of age fifty-five (55), provided his attained age when added to his Credited 

Service (to the nearest 1/10 or a year) totals at least eighty-five (85), by making an 

application to the Board. In such event the Employee's Deferred Withdrawal 

Benefit shall be actuarially reduced to reflect the commencement ofthe Member's 

benefit prior to his attainment of age sixty-five (65). 

When you terminated employment, you were eligible for a Deferred Withdrawal Benefit, 

which is payable in an unreduced amount at age 65. As provided in Section 3.4(b), however, 

your benefit must be "actuarially reduced to reflect the commencement of [your] benefit prior to 

[your] attainment of age sixty-five ( 65)." · · 

6 

The December 14, 1992 letter from Collins & Aikman to you (Enclosure 5) has language 

similar to Section 3.4, stating: 

[Y]ou are entitled to a deferred vested monthly pension benefit payable at age 65 

in the amount of $363.80.... You may be eligible to have your benefits start as 

early as age 60. In this case, your benefit amount will be actuarially reduced for 

each month that your benefit commencement precedes your normal retirement \. 

date (the first day ofthe first month after you have reached age 65). 

The November 27, 1995 letter from United Auto Workers ("UAW") Local 548 (Enclosure 2) 

contains similar language with respect to the age-65 actuarial reduction. 

We found that, in the two-year period before the C&A Plan terminated, the former Plan 

administrator calculated and paid Deferred Withdrawal Benefits for some former Bumper 

Division employees that were actuarially reduced from age 62, rather than from age 65. When 

. PBGC became trustee of the C&A Plan, it also paid estimate~ benefits that were actuarially 

reduced from age 62, rather than age 65. As a result, you and some other former Bumper 

Division employees were overpaid. Since the terms of the Bumper Plan Document clearly 

provide that the Deferred Withdrawal Benefit must be actuarially reduced from age 65, PBGC 

must apply those terms. 9 · · 

In your May 28, 2010 PBGC benefit determination (as well as in PBGC's benefit 

determinations for other participants), PBGC applied a reduction of Y2 of 1% for each month that 

a Deferred Withdrawal Benefit started before age 65. This reduction equals 6% for each year 

before age 65. In Enclosure 6, we provide a copy of the table PBGC prepared and used for 

computing Deferred Withdrawal Benefits starting before age 65. The Appeals Board decided 

that your appeal does not provide a basis for changing the early benefit commencement factors 

that PBGC used. 10 · . 

9 We did not locate any amendment to the Bumper Plan Document, or any subsequent C&A Plan provision, that 

changed how the amount of the Deferred Withdrawal Benefit is calculated. We further found that, for two former 

Bumper Division employees who started benefits in 2006, the former Plan administrator had paid Deferred 

Withdrawal Benefits reduced from age 65. We concluded that the age-62 reductions for other former 

Bumper Division employees with Deferred Withdrawal Benefits were the . result of errors in pension plan 

administration. 

10 Although the Bumper Plan Document provides for a reduction of \li of 1% for each month with respect to an 

Early Retirement Benefit, it does not specifically state the reduction percentages for a Deferred Withdrawal Benefit. 

We found a document for a Wickes salaried plan, however, that defmes "Actuarial Equivalence" as: (1) 7 \li% 

interest; and (2) 1983 Group Annuity Mortality Table for males, set back one year for retirees and 5 years for 

beneficiaries. If that "actuarial equivalence" definition is used to calculate the actuarial reduction for early 

· commencement of the Deferred Withdrawal Benefit, then the amount of the reductions would be greater than the \li 

of 1% reduction that PBGC used, and your benefit would be lower. The Appeals Board is not changing the 

reduction factor that PBGC used for you, since we found no information indicating that the less-favorable "actuarial 

equivalence" definition was used by the C&A Plan's administrators in calculating reductions for early benefit 

commencement. 

7 

The Amount o(Your PBGC-payable Benefit 

You .started receiving your benefit as of 2008. You were 0 and 1 month years 

old on your benefit commencement date- which 'is 47 months ·before your Normal Retirement 

Date of July 1, 2012. Your. early benefit cqmniencement calculation, using the Y2 of 1% per 

month reduction factor discussed above, is shown in the chart below. 

Early Benefit Conimencement Factor 

# Months Early Percentage Total Percentage 

Reduction Reduced 

47 X 0.005 = 0.2350 

1 -Total Percentage Reduced= 1 - 0.2350 = 0. 7650 = 76.50% 

Based on the Bumper Plan's terms, your $363.80 Normal Retirement benefit amount is 

multiplied by 0. 7650 to take into account that your benefits began at ageD and 1 month (rather 


· than at age 65, your norinal retirement age). As a result, your C&A Plan benefit based on your 


actual benefit start date (August 1, 2008) is $278.31 [$363.80 x 0.7650 = $278.31] ifpaid as a 


Straight Life Annuity ("SLA"). . . 

Also, as provided under the Bumper Plan's terms, your benefit amount is multiplied by 0.95 

to take into account that the automatic form of benefit for a married participant is a Joint and 

60% Survivor Annuity with a Pop-up Annuity ("J&60%SA with Pop-up"). Thus, your 

guaranteed C&A Plan benefit at actual retirement as a J&60%SA . with Pop-up is $264.39 

[$278.31 x 0.95 = $264.39]. The Pop-up feature means that, if your wife should die before you, 

your monthly payments would increase to your unreduced (SLA) amount. 

Unfortunately, PBGC's revised benefit statement in Enclosure 3 (as well as other 

correspondence to you) did not refer to the Pop-up feature in describing the C&A Plan's·normal 

form of benefit. Rather, the revised benefit statement and other correspondence simply referred 

to the benefit form as a ,;Joint-and-60% Survivor Annuity." 

Moreover, when PBGC determined the amount of the benefit form you elected (i.e., the 

J&50%SA without a Pop-up), PBGC made an error of $1.89 per month. If PBGC had made the 

correct adjustment in converting the C&A Plan's normal form (i.e., a J&60%SA with Pop-up) to . 

the form you elected (i.e., a J&50%SAwithorit Pop-up), your monthlybenefit would be $269.88. 

This compares to the $267.99 amount that PBGC had determined. 11 

The Appeals Board has corrected this error and has determined that you are entitled to a 

monthly benefit of $269.88 in the J&50%SA form (without a Pop-up). This is based on your 

actual benefit start date of 2008. 

11 Please note that the J&50%SA benefit you elected is an optional PBGC form ofbenefit. A PBGC regulation sets 

forth the rules for converting the amount of the pension plan's normal form of benefit to the PBGC optional fomi 

amount. 

8 

". 


Recoupment ofOverpayments.· 

PBGC's response to your initial appeal inch+ded a statement showing that you were overpaid 

$1,637.00 as of September 1, 2010. The $1,637.00 amount is based on your 2008 

benefit start date and does not inClude: (1).the additional amounts you have been overpaid while 

. your appeal has been pending with the Appeals Board; and (2) the $.1.89 increase to your benefit 


under this decision. Even though the $1,637.00 overpayment a.rrlount has increased, PBQC will 


· limit the monthly benefit reduction for the repa)'!rient of your overpayments to no more than 


10%ofthe correct benefitamount. 	 · 

Under the law and a PBGC regulation, PBGC must "recoup" benefit overpayments by 

reducing participants' future paymentsP . While PBGC cannot pay you more than you are . 

entitled to receive, PBGC's method ofrecoupment is advantageous to you because: 

• 	 PBGC is recouping only ·by reducing futUre benefit payments to you and IS not 

demanding immediate repayment. 

• 	 PBGC generally limits its reductions to 10% for recoupment, and is doing so here. 

• 	 PBGC is not charging interest on overpayment b,alances. 

• 	 P~GCwill not seek to collect any remaining 'overpayment balance ~om your estate or (if 

you die first) from your spouse's estate. 

Your Choice on Whether to Continue or Interrupt Your Benefits 

PBGC has a policy that allows a participant to choose a new (future) benefit start date if: (1) 

the benefit estimate PBGC provided the participant contained an error of 10% or more in the 

early retirement factor; and (2) using the correct early retirement factor results in greater 

reduction than the estimate indicated. This policy applies to your situation. · 

PBGC's Authorized Plan Representative will. notffy you by letter that you may choose 

whether to: (1) continue with a $269.88 monthly benefit (before recoupment) based on your 

L_____j2008 benefit start date, with the $269.88 amount reflecting a 23.5% reduction for early 

benefit commencement; or (2) elect to interrupt your benefit payments and then restart them at a 

future date with a smaller reduction for early commencement (or no age reduction at all if you 

restart benefits on your age 65 normal retirement date).. The next paragraphs provide some 

information regarding the decision you must soon' make. 

You will have 30 days from the date of PBGC's notice to contact PBGC to request a change 

(unless the notice states a different time period). If you elect to continue your benefit or do not 

respond, PBGC wiil riot change your benefit start. date and your benefit will be $269.88 per 

month (before recoupment), as stated in this decision. · 

12 See 29 Code o(Federal Regulations sections 4022.81 and 4022.82(a)(2)(i). 

9 

.'• 

If you elect to interrupt your benefit payments and restart them later, PBGC policy requires 

that your spouse consent to this decision. Once you interrupt your b~nefits, all prior payments 

become part of your PBGC overpayment balance. PBGC, however, will obtain repayment only 

through a (maximum) . reduction of 10% to your monthly payments, once you restart your 

benefit. 13 For every month you delay the restart ~[your benefits, your future monthly benefit 

amount will increase. 

If you decide (with the consent of your spouse) to interrupt your payments and restart them, 

it will be BAPD's responsibility (rather than the Appeals· Board's) to determine your benefit 

amounts, both before and after recoupment. To give you information at this· time, we are 

providing examples of the approximate amounts yo·u would receive depending upon the choice 

·you make. 

·The below two examples show the impact upon your payments if you decide to interrupt 

your benefits and restart them later in the Plan's normal form of benefit for a married participant 

(the . 	J&60%SAwith Pop-up): . 

• 	 If you delay restarting your benefit Un.til July 1, 2012 (i.e;, after attaining age 

65), your monthly benefit as a J &60%SA with Pop-up would be 

approximately $345:61 (before recoupment). 14 After the expected 10% 

reduction for recoupment, your monthly payments would be approximately 

$311.05. 

• 	 If you were to skip the November 1, 2011 payment and re-start benefits on 

December 1, 2011, your monthly benefit as a J&60%SA with Pop-up would 

be approximately $333.51 before recoupmentY After the expected 10% 

reduction for recoupment; your payrrients would be approximately $300.16. 

The above examples are only estimates, which we are providing for your convenience. 16 Please 

also note that: (1) if you decide to keep your current benefit form- a J&50%SA without a Popup - the benefit amounts would be slightly larger than those in the above two examples; and (2) 

if you decide to keep your current benefit start date (August 1, 2008), the expected recoupment 

reduction to your $269.88 monthly benefit would be less than 10%. 

13 If you choose to interrupt your benefit payments and then restart them at a later date, your overpayment balance 

will increase because all payments will be considered "overpayments." Additionally, interrupting your benefits will 

cause PBGC's 10% recoupment reduction to end on a later date. Please note that, regardless of your choice, PBGC 

will still limit the recoupment reduction to no more than 10% of your monthly benefit. If you elect to temporarily 

stop your benefit, for one or more months, your spouse is protected by the Plan's Qualified Pre-retirement Survivor 

Annuity ("QPSA") b~nefit should you die before restarting your benefit. 

14 The $345.61 amount equals your $363.80 amount pay~ble at Normal Retirement as a SLA multiplied by the 

Bumper Plan's factor of0.95 to convert a SLA to a J&60%SA with Po~-up [$363.80 x 0.95 = $345.61]. 

15 	 The $333.51 amount equals your $363.80 amount payable at Normal Retirement as a SLA multiplied by the 

Bumper Plan's factor of 0.95 to convert a SLA to a J&60%SA with Pop-up and by a 0.965 factor for a benefit 

starting 7 months before age 65 [$363.80 x 0.95 x 0.965 = $333.51]. 

16 As stated above, BAPD (rather than the Appeals Board's) is responsible for deciding your benefit amounts. 

10 

. 


The choice PBGC will offer you will impact your future monthly benefit payments. If you 

have any questions, do not hesitate to call PBGC and have those questions answered. 

Decision 

Having applied the law, regulations, Plan provisions, and PBGC policy to the facts of your 

case, the Appeals Board decided that you are entitled to a .$269.88 monthly benefit (before the 

adjustment for your overpayments) based on your! 12008 start date and your eleCtion of 

a J&50%SA. The Board decided, however; that you may e ect to change your benefit start date 

(as well as your form of benefit) as provided in a PBGC policy. PBGC will be contacting you in 

the near future regarding this choice of whether to: (1) continue your monthly payments without 

interruption; or (2) stop your payments for a minimum of one month and restart them at a later 

date in a higher amount. ' 

This is PBGC's final decision on your appeal. You may, if you wish, seek court review of 

this decision. If you- need other information from PBGC, please call the Customer Contact 

Center at 1-800-400-7242. 

Sincerely, 

~w~

Charles W. Vernon 

Chair, Appeals Board 

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