A Pension Benefit Guaranty Corporation F-ffi-C 1200 KStreet, N.W., Washington, D.C. 20005-4026 

Estate of 71 NOV 1 9 2002 

Re : Appeal Republic Ret irement Plan (the "Plan") 

The Appeals Board has reviewed your appeal of PBGC's July 23, 

1998 determination of benefit under the Plan. PBGC 

records show that died on January 26, 2001, and the Board 

Members would like to convey our condolences. For the reasons 

stated below, the Board changed PBGC's determination by increasing 

your father's monthly benefit payable as a Straight Life Annuity 

("SLA") starting on his Actual Retirement Date ("ARD") to $777.25. 

Determination and Appeal 

PBGC1s determination letter said thatwas entitled 

to a monthly benefit of $657.17 per month, payable for life with no 

survivor benefit, instead of the estimated $727.65 monthly benefit 

he had been receiving. PBGC's files show thatbenefit 

payment was reduced to $591.45 ($657.17 - $65.72) on October 1, 

1998 and that PBGC stopped payments following his death in January 

Of 2001. 

Due to the personal circumstances of - case, namely, 

the deaths of his mother-in-law, mother, and wife within the ninemonth period before PBGC sent his determination letter, we accepted 

your October 2, 1998 electronic correspondence as an appeal. In 

your appeal, you said that you could not understand how PBGC could 

say that there was an overpayment 12 years after the commencement 

of your father's pension, and that the repayment would have caused 

a financial hardship. 

Discussion 

The Appeals Board reviewed Plan provisions under both the 1983 

Plan (Enclosure 1) and the 1986 Plan (Enclosure 2). as well as 

LTV record card (Enclosure 3). The Board also compared 

PBGC's calculations of i Plan-defined benefit under the 
ii 

-2- 

11 I 

1983 Plan (Enclosure 4) and the 1986 Plan (Enclosure 5) with LTV's ii calculation of his 1986 Plan-defined benefit (Enclosure 6). 

I 

I. 

ii The Board found that the reason LTV's 1986 Plan amount was 

I 

I0 

higher than PBGC's 1986 Plan amount is because LTV applied the 10% 

increase described in the 1986 Plan's section 4.4 to 

deferred vested benefit amount. His LTV record card shows that his 

date of termination (June 15, 1986) was exactly 15 davs after his 

"Last Day Worked" (May 31, 1986). and therefore, before the Plan's 

termination date (September 30, 1986). It appears that PBGC 

overlooked this information and deemedan active employee 

as of the Plan's termination date when they calculated his 1986 

Plan-defined benefit. 

While the Appeals Board did not find the election form 

described in the 1986 Plan in file (see § 4.4 on page 5 

of Enclosure 2), the Board decided as we did in other appeal 

decisions under the Plan that LTV's calculation of his estimated 

benefit with the 10% increase together with the dates on his LTV 

record card are sufficient to show that he qualified for the 10% 

addition to his deferred vested pension under the 1986 Plan. The 

Board further concluded that PBGC should have also applied a 10% 

increase in calculating his 1983 Plan-defined benefit, because 

having qualified for the 10% increase under the 1986 Plan's 

"15-day" window period, necessarily qualified for the 10% 

increase under the 1983 Plan's "90-day" window period. (See 

section 3 -19 (a) (1) on pages 4 and 5 of Enclosure 1.) 

while continuing our review of the calculations made by PBGC 

and LTV under the 1986 Plan, the Appeals Board noted that, in 

calculating kg86 Plan benefit, LTJ did not apply the 5% 

addition to his 1.5 Percent pension, as prescribed in 

section 3.l(b) (2) on pages 1 and 2 of Enclosure 2. PBGC, on the 

other hand, did apply that 5% increase because PBGC's consistent 

reading of the language of the 1986 Plan has been to apply the 

addition to all "Percent" pensions calculated under the 1986 Plan. 

Even though PBGC's reading disagrees with LTV's consistent practice 

under the 1986 Plan with respect to deferred vested participants 

like1 the Board has previously decided to accept PBGC's 

reading of the 1986 Plan in this regard. 

The Appeals Board also found that PBGC did not apply the 

similar 5% addition to the Percent pension formulas under the 1983 

Plan because PBGC did not realize that I terminated his 

employment on June 15, 1986 during the "window" period specified in 

the 1983 Plan document, which ended on July 31, 1986. (See 

5 3.3(b) (2) on page 1 of Enclosure 1.) Thus, the Board found that 

because did in fact terminate his employment before the 
end of that window period, the 5% addition under the 1983 Plan is ii applicable to his Percent formula calculations under the 1983 Plan. I 

I. 

I. As a result of the Board's decisions discussed above regarding I! 

0 

the proper calculation of plan-defined benefits, the 

Board increased his 1983 Plan-defined benefit to $792.29, and 

increased his 1986 Plan-defined benefit to $777.25. Please see 

Enclosure 7 for the Board's recalculation of Plandefined benefit under both the 1983 Plan and the 1986 Plan. As 

explained immediately below, monthly PBGC guaranteed 

benefit is his full Plan-defined benefit of $777.25. 

benefit 

Please note 

under both the 

that 

1983 

the 

Plan 

reason 

and 

PBGC 

the 

calculated 

1986 Plan is 

71 

due to the 

legal limits set by Congress when it enacted the Employee 

Retirement Income Security Act of 1974 ("ERISA"). One of these 

guaranteed benefit amount. 

limits, 

Under 

the 

the 

Five-Year 

Five-Year Phase-In 

Phase-In, could 

limit, PBGC 

have affected 

may 

71 

guarantee 

increases in benefits resulting from Plan amendments only to the 

extent of $20 per month or 20% of the increase, whichever is 

larger, for each full year that the benefit increase was in effect 

before the Plan's termination date. Because the effective date of 

the 1986 benefit freeze amendment (January.1, 1986) was less than 

one full year before the Plan's termination date (September 30, 

1986), any increase in Plan-defined benefit resulting 

from the benefit freeze amendment could not have been guaranteed by 

PBGC . 

After recalculating benefits under the 1983 and 

1986 Plans, the Appeals Board found that incase, the 

1986 amendment to the Plan did not result in an increase in his 

'Plan-defined benefit, and thus, the Five-Year Phase-In limit does 

not affect his guaranteed benefit. Please note that under ERISA, 

PBGC is not allowed to guarantee a benefit that is larger than the 

benefit payable under the terms of the terminated Plan. 

Decision 

Having applied the law, PBGC's rules and Plan provisions to 

the facts in I case, the Appeals Board changed PBGC's 

determination by increasingmonthly benefit starting on 

his ARD payable as an SLA to $777.25. 

When PBGC's Insurance Operations Department, the PBGC 

department that issues benefit determinations, receives a copy of 

this decision, they will calculate the total additional monthly 
amounts that PBGC should have paidduring his lifetime, 

estate for 

and they will 

those underpayments, 

make a one-time payment 

plus interest. 

to reimburse 71 

ii I We regret the delay in resolving your appeal and appreciate 

$0 your patience while we completed our review. If you have 

additional questions, you may write to PBGC1s Authorized 

Representative for this case, Benefit Services Unlimited, Inc., at 

Brandywood Plaza, 2500 Grubb Road, Suite 221, Wilmington, Delaware 

19810-4711, or you may call them at 1-800-400-7242, ext. 1000. 

Sincerely, 

Michel Louis 

Appeals Board Member 

Enclosures ( 7)