~ 

PSGC Pension Benefit Guaranty Corporation 

Protecting America's Pen.ions 1200 K Street, N.W., Washington, D.C. 20005-4026 

September 25, 2008 

Re: I I, Case 200283, Hy-Lift LLC Pension and Retirement 

Savings Plan (the "Hy-Lift Plan" or the "Plan") 

Dear I 

~---~ 

This Appeals Board decision responds to your appeal of PBGC's September 29, 

2006 determination of your benefit from the Hy-Lift Plan. For the reasons we state 

below, we changed PBGC's determination by finding that you are entitled to a PBGC 

monthly benefit of $339.66 payable as a Joint and 55% Survivor Annuity. 

PBGe's Determination and Your Appeal 

PBGC's October 26, 2006 determination letter told you that you were entitled to a 

monthly benefit of $256.67 instead of the $339.66 you have been receiving. 

Your December 27, 2006 letter stated, "I did not go out on the Normal 

Retirement. I went out on an Early Retirement under paragraph 4.2 eligibility for 

retirement and under paragraph 5.2." On March 5, 2007, PBGC responded to your 

letter, explaining that you were not eligible for an Early Retirement Benefit at the time of 

your break in service. The letter said that you were instead eligible for a Deferred 

Retirement, which is reduced from age 65. 

Your March 14, 2007 appeal letter claimed that you could terminate your 

employment at age 53 and come back at the age of 57 to draw your retirement benefit 

under the early retirement provision. 

Discussion 

1. Background 

PBGC provides pension insurance in accordance with the Employee Retirement 

Income Security Act of 1974, as amended ("ERISA"). If a plan sponsor is unable to 

support its defined-benefit pension plan, PBGC becomes trustee of the plan and pays 

benefits as defined in the plan, subject to the limitations and requirements set by 

Congress under ERISA. 
- 2 -

Records available to the Appeals Board show that PBGC issued a Notice of 

Determination on June 7, 2004, finding that the Hy-Lift Plan needed to be terminated to 

protect the interests of the participants. PBGC became trustee of the Plan on July 8, 

2004. The trusteeship agreement set April 13, 2002 as the Plan's termination date 

because Hy-Lift, L.L.C. (UHy-Lift") ceased all operations on or before that date. 

When PBGC becomes trustee of a terminated plan, PBGC collects participant 

data from the plan's former administrator and audits that data. PBGC necessarily relies 

on the data it receives from a former plan administrator unless (1) PBGC's audit of that 

data shows that it is wrong; or (2) a participant supplies PBGC with documents showing 

that the data is wrong. Furthermore, if a plan's provisions are ambiguous, PBGC 

reviews "plan practice" to determine how the plan's former administrator interpreted the 

ambiguous provisions. PBGC usually accepts the former administrator's interpretation 

of ambiguous provisions if that interpretation is consistently applied to all participants. 

The data that PBGC received from Hy-Lift show that: D 

(1 ) 

(2) 

(3) 

(4) 

(5) 

(6) 

you were born on 1 11944; 0 ~ 

you were hired onl . ~. 11982; 

your employment ended on f, 1997, at age 53 years and 4 months; 

you earned 20.2 years of Credited Service; 

you started receiving your retirement benefit effective June 1, 2001, at the 

age of 57 years and 3 months; and 

you were receiving your retirement benefit in the form of a Joint and 55% 

Survivor Annuity ("J&55%SA") when PBGC became the Plan's trustee. 

2. Pertinent Plan Provisions 

The January 1, 1995 Amendment and Restatement of the Plan (the "1995 

Restatement") was in effect when your Hy-Lift employment ended. 

Section 2.1 of the 1995 Restatement provides the following definitions: 

d. "Employee" means any person in the employ of the Company 

who was covered by the Plan on December 31, 1955, and thereafter any person 

in the employ of the Company who is in the bargaining unit as defined in the 

Collective Bargaining Agreement. 

h. "Break in Service" means any Plan Year subsequent to the date 

on which an Employee has broken seniority under the Collective Bargaining 

Agreement, during which Plan Year an Employee completes 500 or fewer Hours 

of Service; at the end of such a Plan Year a one-year Break in Service shall be 

deemed to have occurred. 

o. "Plan Year" means a calendar year which ends on each 

December 31 .. 
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Section 4.1, "Normal Retirement," provides, 

An Employee who (i) attains his sixty-fifth (65th) birthday, (ii) attains the fifth (5th) 

anniversary of the date he first became an Employee hereunder, and (iii) ceases active 

service, shall have attained Normal Retirement Age and shall be entitled to a normal 

Retirement Benefit as provided in subsection 5.1 hereof. 

Section 4.2 provides eligibility for Early Retirement benefits. The Plan requires 

that Employees must have either: 

(a) attained age 57 with 10 years of Credited Service, 

(b) attained age 55 with combined age and Credited Service equaling 85 

points or greater, or 

(c) earned 30 or more years of Credited Service. 

Section 5.2(a) contains the provisions for calculating benefits for Early 

Retirement under the Plan. This section states that an Employee 

retired at the option of the Employee (including, but not limited to, such 

retirements elected following an Employee's discharge for cause), and who is 

eligible for an early Retirement Benefit pursuant to the proviSions of subsection 

4.2a, or 4.2b, or 4.2c, with benefits payable commencing on or after January 1, 

1992, shall receive a monthly Basic Retirement Benefit commencing as of the 

first day of any calendar month, selected by the Employee, which follows his 

early retirement, determined in accordance with subsection 5.1a., b., c. or d., 

whichever is applicable, and based upon his Credited Service at the tine of early 

retirement, such benefit being multiplied by the percentage set forth in the table 

below based on such Employee's attained age at the date of the commencement 

of payment of his benefit. 

EMly Retirement Percentages 

Applicabl, Ie Basic Benefits Payable Prior to Age 6$ 

AGES 

YEdRS 

Q 1 2 oJ 4 .-5 . __ ti._ 1 8 2 III 

47 30.4 jO.6 30.8 31.0 31.2 31.4 3L.6 31.8 3'2.0 32.2 32.4 

48 32.8 33.<J 33.2 33.S 33.7 33.9 34.1 34.3 34.5 34.8 35.0 

49 35.4 35.6 35.9 36.l 36.4 36.6 36.9 37.1 31.3 37.6 37.8 

50 38.3 38.6 38.& 39.[ 39.4 39.6 39.9 40.2 40.4- 40.7 41.0 

51 41.5 41.8 42.1 42.4 42.7 43.0 43.3 43.5 43.8 44.1 44.4 

52 45.0 45.3 45.7 46.0 46.3 46.6 47.0 41:3 41.6 47.9 48.3 

53 48.9 49.3 49.6 50.0 50.3 50.7 51.0 51.4 51.8 52.1 52.5 

54 53.2 53.6 54.0 ,54,4 54.8 55.2 55.6 55.9 56.3 56.7 57.1 

55 51.9 SSA 58.8 59.3 59.8 60.2 60.7 61.2 6i.6 62.1 62.6 

S6 63.S 64.0 64.5 65.0 6S.5 66.0 66.4 66.9 67,4 67.9 68.4 

57 69.4 69.9 70.4 70.8 71.3 71.8 72.3 12.8 73.3 73.7 74.2 

58 75.2 75.7 16.1 76.6 77.1 77.5 78.0 78.5 78.9 79.4 79.9 

51) SO.S 81.3 81.8 82.3 81.8 83.3 83.7 84.2 84.7 85.2 85.7 

60 86.1 8'7.3 87.8 88A 8&9 89.5 9(}.O 90.6 91.1 91.7 92.2 

M 93.3 93.9 94.4- 9.5.0 95.5 96.1 96.15 97.2 97.8 98.3 98.9 

62. or Over "" 1 00.% 

Nale: 1n com-puting ag~. onJy the full number of ~omp]eled calendar month" 

shall be counted. 

M{)N11IS 

II 

32.6 

35.2 

38.1 

41.2 

44.7 

48.6 

52.8 

57.5 

63.0 

68.9 

74.7 

80.3 

l!6.2 

912.8 

99.4 
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Section 6.3 provides for "Vesting on Separation from Service Before Retirement" 

and states in part: 

a. Any Employee who loses accumulated Vesting Service and Credited 

Service under the provisions of subsection 3.3, by incurring a Break in 

Service shall, if such Employee is not retired and eligible for benefits pursuant to 

subsection 5.1 or 5.2 or 5.3, be eligible for a deferred Retirement Benefit 

provided the Vesting Service of such Employee at separation is at least five 

years. 

d. A former Employee who is eligible for a deferred Retirement Benefit may, at 

the election of such former Employee, receive either: 

(1) A monthly deferred Retirement Benefit commencing at or after age 

65, determined in accordance with paragraph b. or c. of this subsection 

6.3, whichever paragraph is applicable, or 

(2) A monthly deferred Retirement Benefit commencing after attaining 

the earliest age at which he could retire (based upon his Credited 

Service) under subsection 4.2 and prior to age 65. Such benefit shall be 

determined in accordance with paragraph b. or c. of this subsection 6.3, 

whichever paragraph is applicable, such benefit being reduced by 

5/10ths of 1 percent for each complete calendar month by which such 

former Employee is under the age of sixty-five (65) at the date the 

deferred Retirement Benefit commences. 

[Emphasis added.] 

Section 3.3 of the 1995 Amendments is entitled "Loss of Vesting Service and 

Credited Service" and states in part: 

After January 1, 1986, an Employee will lose all Vesting Service and Credited 

Service for the purposes of the Plan if he incurs five consecutive one-year 

Breaks in Service. 

[Emphasis added.] 

3. Calculation of Your Monthly Benefit 

The only difference between PBGe's calculation of your benefit and Hy-Lift's 

calculation of your benefit is the early commencement reduction factor. Hy-Lift used the 

factor for age 57 and 3 months from the table in section 5.2 of the 1995 Restatement, 

namely, 70.8%. 

PBGC's actuaries, on the other hand, calculated an early commencement factor 

based on the formula found in section 6.3(d)(2) of the 1995 Restatement. As there are 

92 complete months between June 1, 2001 and your 65th birthday (February 26, 2009), 

PBGC intended to calculate your early commencement adjustment factor to be 54% 

[= 100% minus (0.5% x 92)]. 
- 5-

PBGC determined that the factors in section 6.3(d)(2) instead of the factors in 

section 5.2 of the 1995 Restatement applied to the calculation of your benefit because 

you had not met the age requirement (age 57) for Early Retirement under section 4.2 at 

the time your employment ended on July 23,1997. 

Based on our review of Hy-Lift Plan practice, we have conduded that Hy-Lift 

determined that the factors in 6.3(d) of the 1995 Restatement did not apply to the 

calculation of your deferred vested benefit because the first sentence of section 6.3 

indicates that section 6.3 applies only to an "Employee who loses accumulated Vesting 

Service and Credited Service under the provisions of subsection 3.3, by incurring a 

Break in Service." We note, in this regard, that an Employee "loses accumulated 

Vesting Service and Credited Service under the provisions of subsection 3.3" only if the 

employee "incurs five consecutive one-year Breaks in Service" and you had not yet 

incurred five consecutive one-year Breaks in Service at the time you started receiving 

your pension benefit on June 1, 2001. 

Regardless of whether section 5.2(a) or section 6.3(d) applies to the calculation 

of your early commencement factor, it is clear that you were entitled to start receiving 

your pension benefit on the first day of any month coincident with or following your 57th 

birthday because ERISA requires plans to allow a deferred vested participant like you, 

who has met the service requirement (in this case 10 years of Credited Service) for an 

early retirement benefit, to start receiving a pension benefit once he or she meets the 

age requirement. We note, however, that ERISA does not require plans to use the 

same early commencement reduction factors for deferred vested participants as the 

plan uses for participants who met both the age and service requirement for early 

retirement at the time they ended their employment. 

We note that while ERISA does not require plans to use the same early 

commencement reduction factors for deferred vested participants as the plan uses for 

participants who met both the age and service requirement for early retirement at the 

time they ended their employment, ERISA does not require plans to use a different set. 

Based on our review of Hy-Lift Plan practice, we have concluded that Hy-Lift decided to 

use the regular early commencement factors (in section 5.2) for some deferred vested 

participants and the early commencement factors described in section 6.3(d) for other 

deferred vested participants. 

Based on the above and our review of Hy-Lift Plan practice, we have concluded 

that (1) the early commencement factors in section 5.2 apply to the calculation of 

benefits for deferred vested participants who earned at least 10 years of Credited 

Service and had attained at least age 52 when their employment with Hy-Lift ended; 

and (2) the early commencement factors in section 6.3(d) apply to the calculation of 

benefits payable to deferred vested participants who earned at least 10 years of 

Credited Service but had not yet attained age 52 when their employment with Hy-Lift 

ended. 

As you had already attained age 53 and had earned more than 10 years of 
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Credited Service when your Hy-Lift employment ended, we have concluded that Hy-Lift 

properly used the early commencement adjustment factor table in section 5.2 of the 

1995 Restatement when it calculated your pension benefit. 

Decision 

Having applied Hy-Lift Plan provisions to the facts of your case, we changed 

PBGC's determination by finding that you are entitled to a PBGC monthly benefit of 

$339.66 payable as a Joint and 55% Survivor Annuity. 

This decision is PBGC's final action regarding the issues your appeal raised. If 

you wish, you may ask a court to review this decision. 

We regret the delay in responding to your appeal and appreciate your patience 

while we completed our review. If you need other information about your PBGC benefit, 

please call PBGC's Customer Contact Center at 1-800-400-7242 and ask to speak to 

the authorized representative assigned to the Hy-Lift Plan (Case 200283). 

Sincerely, 

Michel Louis 

Appeals Board Member