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PBGC Pension Benefit Guaranty Corporation 

1200 K Street, N.W .• Washington, D.C. 20005-4026 

www.pbgc.gov --- November 23, 2005 

Re: I Case Number 195241 

LTV Steel Salaried Pension Plan (the ~PlanW) 

Dear '-------

The Appeals Board has reviewed your appeal of PBGe's June 30, 

2005 determination of your PBGC benefit. As explained below, we 

must deny your appeal. 

Benefit Determination 

PBGC determined: 

• Your plan benefit is a $1,981.51 per month Straight Life 

Annuity, the same benefit you received until August 1, 2002. 

• Your PBGe benefit iea $1,386.39 per month, slightly more than 

the $1,384.90 estimated PBGe benefit PBGC has been paying you 

since September I, 2002. 

• You were overpaid $2,918.98 following the Plan's March 31, 

2002 termination date through August 2002. 

• Your $1,386.39 PBGCbenefit will be temporarily reduced by 

approximately $21.35 per month until your net overpayments 

have been repaid. You will not be charged interest on your 

overpayments. 

Your Appeal 

In your August 12, 2005 letter:· 

• You ask PBGe to restore your $1,981.51 benefit. 

• You questioned PBGC's determination that your benefit should 

be reduced again to repay any overpayments. 

• You explained pBGe' s reductions are causing you economic 

hardship. 

Your PBGe Benefit 

pnder the law, PBGC cannot use your economic hardship as a 

basis for.determining your benefit. Further, the law and PBGe's 

regulation also require PBGC to seek repayment of your 
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overpayments. 1 However. PBGC' s regulation' reduces economic 

hardship by generally limiting to 10% the temporary reductions in 

PBGC benefits for repayment. As explained below, your full PBGC 

benefit under the law is the $1,386.39 benefit PBGC determined. 

Benefit LncreaseNot Fully GUaranteed 

PBGe cannot pay your full $1,981.51 Plan benefit because: 

• Plan assets were not sufficient to fund all guaranteed 

benefits, under allocation rules required by law. 2 

• The law limits PBGC's guaranty of benefit increases effective 

or adopted less than 5 years before a plan terminates. Thus. 

PBGe must ~phase-inw its guaranty of such benefit increases. 3 

1999 Benefi t Increase Not Fully Guaranteed 

Your benefit was increased from $987.16 4 to $1,981.51 5 under 

a Plan amendment effective January I, 1999. See Enclosure 1, the 

-1999 Amendment." Tbe1999 Amendment was signed November 6, 2001. 

November 1999 Adoption Date Requires 40t Phase-in 

PBGe determined the 1999 Amendment was adopted earlier, on 

November 1, 1999, when LTV wrote to participants about benefit 

increases.such as yours. The November 1, 1999 adoption date is 

between 2 and 3 years before the Plan's March 31, 2002 termination. 

Based on such a 2-3 year period between adoption and plan 

termination, your $994.39 {$1,981.51 - $98?12} increase is 40% 

guaranteed. Thus, based on the November 1, 1999 adoption date PBGe 

used, your guaranteed benefit is $1,384.89 {$987.12 + ($994.39 x 

40%)} per month. 

29 Code of Federal Regulations ·CFRu section 4022.81 and 

§4022.82(a) (2) (i) 

l See Employee Retirement Income Security Act of 1974 

(UERISAU), section 4044. 

3 ERISA section 4022 (b) (7). and 29 CPR § § 4022.24 and 4022.25 

• ($182,660.31 + 60 months) x 1.5% x 26.0833 years - $203.94 

projected Social Security benefit. Service and compensation were 

frozen as of December 31, 1985. Please see Enclosure .2 page 1. 

Your.$182 1 660.31 high-60 total pension compensation, and your 

$203.94 projected Social Security benefit are in LTV1s electronic 

records - See Enclosure 3. 

5 $60.00 accrual rate x 42.083 years service - $543.47 Defined 

Contribution Plan Benefit 
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Appeals Board Independently Verified 40t Pbase-In Applies 

To decide which phase-in percentage applies, Appeals Board 

staff researched exactly when LTV authorities decided to adopt the 

1999 Amendment. We reviewed LTV documents including: 

• A letter LTV's Assistant General Counsel wrote to PBGC in 

March 2002 about the 1999 Amendment. He explained the 1999 

Amendments were developed following LTV-USWA agreement on 

hourly pensions effective August 1, 1999. 

• .A July 31, 1999 USWA-LTV agreement improving pensions. 

• Slides from an October 21, 1999 presentation to the 

compensation Committee of the LTV Board of Directors. The 

presentation includes ~Recommendation[s] - Pension" of: (i) 

unfreezing of the defined benefit plan, and (ii) adopting the 

$6C> Floor Minimum accrual rate that applies to you. 

The evidence shows LTV authorities decided to adopt the 1999 

Amendment increases between October 21, 1999 and November 8, 1999, 

between 2 and 3 full years before plan termination. The Board 

concluded the law requires using the same 40% phase-in percentage 

PBGe used. 

Small Increase Based on Legal Recoveries 

The law also requires allocating additional funds to nonguaranteed benefits based on PBGC's actual recoveries on claims. 6 

Your additional benefit under this allocation is $1.49 {($1,981.51 - $987.16) x (100%-40%) x $161,420 +$64,560,777 . ., Thus, your 

total·PBGC benefit is $1,396.39 ($1,384.90 + $1.49)} per month, the 

same asPBGC determined. 

Decision 

Having applied Plan prOV1S1ons and the law to the facts in 

your case, we must deny your appeal. This letter concludes your 

administrative remedies with respect to PBGC's June 30, 2005 

determination. You may, if you wish, seek court review of PBGe's 

& ERISA section 4022(c) 

7 $161,420 = $1,390,449 total value of recoveries - $1,229,027 

value to unfunded non-guaranteed benefits payable 3 years before 

Plan termination, allocated following ERISA § 4044(a) (3). 

$64 / 560,777 = $65,799,804 total value of all unfunded nonguaranteed benefits - $1,229.027 recoveries allocated following 

ERISA § 4044(a) (3). 
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dete:r:mination with respect to the issues you raised. Thank you for 

your patience while we carefully reviewed your appeal. 

Sincerely, 

William D. Ellis 

Appeals Board. Member 

Enclosures: 

(1) E~cerpt from Plan document effective January 1, 1999, and 

signed November 6, 2001 (9 pages) 

(2) Excerpt from Schedule 1 to the 1999 Plan document 

(5 pages) 

(3) LTV's electronic data for you (5 pages)