t,VA

P

Protecting 

BGC America's Pensions Pension Benefit Guaranty Corporation 

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

September 19, 2014 

[Address intentionally left blank] 

[AP] 

y ank] 

Re: Appeal 2013-0125, (the "Participant") 

Appeal 2013-0126, (the "Alternate Payee" or "AP") 

Case No. 205441, Delta Pilots Retirement Plan (the "Pilots Plan" or "Plan") 

Dear Mr. and Ms.-: 

We are responding to the appeals you each filed in May 2013 regarding your respective 

PBGC benefits. Because your appeals arise out of the same factual situation, the Appeals Board 

has exercised its discretion to consolidate them pursuant to PBGC's regulation (29 C.F.R. 

4003.56). This decision by the Board governs both appeals. 

Summary of the Appeals Board's Decision 

For the r~d below, the Board changed PBGC's -·2012 determinations 

sent to both-and [AP] The Board determined that: 

1. 	 Under PBGC policies, is entitled to retire retroactive to 

-· 2007, the first of the month following his termination of 

~ment from Delta. To retire retroactive to-2007,­

--must submit a retirement application to PBGC within 90 days of this 

decision. If he elects this (favorable) retroactive retirement date, PBGC will 

pay him a lump-sum amount to account for missed prior payments, which will 

include interest. 

Based on his retroactive retirement date of-, 2007, is 

entitled to a monthly benefit of $1,645.80 decreasing to $1,373.91 at his age 

65 (due to the Plan's Social Security~ Straight Life Annuity 

("SLA") with no survivor benefits. ~may elect a different 

form of benefit other than a SLA when submitting his retirement application. 
2. 	 PBGC made an error in c~efit for [AP] . Correcting 

for this error results in ~monthly benefit decreasing from 

$403. 7 5 to $3 73 .10 (both amounts are before recoupment ). [AP] 

benefit will not be reduced for an age-65 Social Security Offset. 

3. 	 As explained in this decision, PBGC's benefit calculations in this case are 

greatly impacted by the fact that the QDRO was silent regarding a possible 

early retirement subsidy for The Appeals Board decided that 

other than the small change to PBGC-payable benefits made 

~GC otherwise correctly determined and 

~benefits. Thus, the Appeals Board denies all other matters 

raised in both appeals. 

Each appellant will receive a revised benefit statement and benefit statement 

worksheet enclosed with his/her copy of this decision. 

Background 

PBGC and the Plan's Termination 

PBGC is the United States government agency that insures pensions in accordance with Title 

IV of 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 the trustee of the 

plan. PBGC pays pension benefits according to the terms of the Plan, the provisions of ERISA 

and the Internal Revenue Code ("IRC"), PBGC regulations and policies, and the terms of any 

applicable QDROs. 

The Pilots Plan terminated on September 2, 2006, without sufficient assets to provide all 

benefits under the Plan, and PBGC subsequently became trustee. When the Plan terminated, 

[AP] had already received a $513,531.62 lump-sum distribution of 50% of her benefit, 

and she was receiving a tax-qualified monthly Plan benefit of $1,279.96. Because of legal limits 

under ERISA and PBGC's regulations, the benefits PBGC guarantees may be less than the 

benefits a pension plan would otherwise pay. 

Undisputed Facts and Timeline 

The Board determined the following facts and timeline are not in dispute: 

• was born . 

• [AP] was born . 

• and 	 [AP] were married. 

• began his employment with Delta as a pilot. 

2 

was entered 

• 	 December 31, 2004 - the Pilots Plan froze Credited Service accruals, and participants 

did not earn any Cre~ited Service after this date. 

• - 2005 - Date of divorce for-and [AP] was effective. 

• -'2005 - A separate interest domestic relations order (the "ORO" 

in the Superior Court in and for Georgia, assigning 

(the "AP") a portion of Pilots Plan benefit, determined as follows: 

100% of the Participant's Formula Benefit (as defined in the Delta Pilots 

Retirement Plan) accrued throug~ 2005, expressed as a single life 

annuity, payable at the Participant's Normal Retirement Date {as defined 

in the Delta Pilots Retirement Plan). The benefit shall be paid over the life 

expectancy of the Alternate Payee, using for such purpose the Actuarial 

Equivalent described in the Delta Pilots Retirement Plan and shall 

commence on the date selected by the Alternate Payee ... 

• -'2005 - Delta determined that the DRO met the criteria to be considered 

qualified, making it a QDRO (the " ..2005 QDRO"). 

• 	 - 2005 - commenced her Pilots Plan benefit as AP at age­

. Under the terms of the Pilots Plan, a participant or AP could elect to 

take one-half of the total benefit (the Variable Annuity portion) as a lump-sum 

distribution. elected to take a lump-sum distribution of half of her 

benefit. Her lump-sum distribution was $513,531.62. 

The remaining one-half portion of the ~he Fixed Annuity) was only 

partially tax-qualified and was payable to-inpart from the tax-qualified 

Plan and in part from the non-tax-qualified Delta Supplemental Annuity Plan 

("SAP"). 1 Under the Plan's QDRO procedures, however, non-tax-qualified benefits 

are not payable "until the time the employee terminates his employment and 

commences a benefit from the non-qualified plan(s)." After receiving the lump-sum 

distribution, [AP] ax-qualified monthly Plan benefit was $1,279.96. 

• 	 September 2, 2006 - The Plan terminated. 

[AP] • - 2006 - Delta reduced benefit to an "estimated benefit" of 

$1, 197.68 per month (before federal tax withholding). 

The SAP was a non-qualified Plan used b-Delta to ay benefits above the IRC § 401(a)(l7) limit. Because the 

SAP was a non-tax-qualified pension plan, " • benefit under from the SAP was never insured by 

PBGC. 

3 


1 
• 	 -2007 terminated employment 

• 

- , 2008 - PBGC reduced IAP] benefit to a new "estimated 

benefit" of $0.00. 

and IAPI their initial 

(formal) benefit determinations. 

• - 2012 - PBGC issued both 

• 	 2012 - PBGC began· paying [AP] the $403.75 benefit listed in 

her - 2012 determination with no recoupment yet applied . 

. -2013­ timely appealed PBGC's determination . 

. -,2013- [AP] timely appealed PBGC's determination. 

PBGC's Benefit Determination fo..-and her Appeal 

PBGC's - 2012 determination letter stated that IAPI was entitled to a 

monthly benefit of $403.75 in the form of a SLA. The letter also 'ned that because PBGC 

had paid her an estimated monthly benefit of $1,197.68 from 2006 

2008 and an estimated monthly benefit of $0.00 from 2008 through~ 

had a net overpayment of $1,665.93. Thus, PBGC would reduce her benefit to $393.82 per 

month until her ~ment is recouped. The ~termination included a Benefit 

Statement dated -.2012 further explaining-benefit. 

~several approved extension requests, IAPI ubmitted a timely-filed appeal on 

- 2013, objecting to PBGC's determination of her PBGC-payable benefit. The appeal 

stated, in pertinent part: 

Upon review of the calculations and exhibits, it is evident that the calculated 

PBGC PC-3 benefit to the Alternate Payee should be at least the original amount 

calculated by Delta Air Lines of $1,279.96, after taking into effect the Lump Sum 

offset. As you can see from the exhibits, there is no reference to, or calculation 

for, additional PC-3 reductions for early retirement by the Alternate Payee. 

To support her appeal, [AP] included several exhibits to her appeal, including 

PBGC correspondence, PBGC's - 2012 Benefit Statement Worksheet Delta's 

Administrative Procedures for Processing Domestic Relations Orders, Delta's-' 2005 

letter qualifying her domestic relations order, and benefit estimates by both PBGC and Delta. 

4 

PBGC's Benefit Determination for -andhis Appeal 

PBGC's - 2012 determination letter stated that was entitled to a 

monthly benefit of $69.42 as a SLA based on the Earliest Benefit Starting Date of2012, and that his monthly benefit would be reduced to $0.00 effective__ 2017 [due to the 

Plan's Social Security offset]. The determination letter included a Benefit Statement dated­

•• 2013, which showed his monthly benefit was $69.42 based on an - 2012 start date, 

and $64.82 based on am, 2012 start date. It appears that PBGC's actuary revised his benefit 

2012, and PBGC mailed hi atement Recalculation Worksheet dated 

- 2012. This Worksheet shows benefit as $194.91 starting-, 

2012 reduced to $0.00 effective , 2017 due to the Plan's Social Security offset. We note 


that has not yet applied for his PBGC-payable benefit. 


~several approved extension requests, submitted a timely-filed appeal on 

-·2013, objecting to PBGC's determination of his PBGC-payable benefit. His appeal 

raised four specific issues, which are summarized below: 

(1) He chose not to apply for his benefit before his benefit determination was issued on 

-	 2012 because PBGC had previously provided inconsistent benefit estimates 

and he "did not want to take a benefit that appeared to be in error and to which [he] 

were not entitled." therefore, seeks to establish a retroactive 

retirement date of , 2007 and receive back-payments for the benefits that 

should have been paid over the past 6 years. 

(2)~serts that PBGC's delay in issuing its BD "kept [his] PBGC 

retirement income at zero ... prevent[ing him] from attaining a Health Care Tax 

Credit (HCTC)." We note the Board has no authority to grant relief on this issue and 

will not further address it in this decision. 

(3) 	 believes that (the Alternate Payee under a Qualified 

Domestic Relations Order applicable to benefit) is entitled to a 

greater benefit than PBGC has determined, according to a "Comparison of Earnings, 

Actual Pa ments vs. Retirement" document provided by Delta 

(Exhibit #7 to the Participant's appeal). 

(4) 	 asks the Appeals Board to recalculate his PBGC-payable benefit and 

provide a new BD and Benefit Statement Worksheet. · 

To 	support his appeal, [P] I ncluded several exhibits to his app~:

benefit estimates roduced by Delta based on retirement dates of - 2004,-, 

2004, and 2005; PBGC correspondence; and portions of Delta's exhibits 

5 

Discussion 

Summary ofthe P BGC Methodology Used 


in Determining Each Person's PBGC-Payable Benefit 


PBGC determined each PBGC-payable benefit in three basic steps, using the same general 

method PBGC uses for all participants, alternate payees, and beneficiaries of PBGC-trusteed 

plans: 

I. 	 PBGC first reviewed each party's Plan benefit as calculated by Delta. Neither 

party appealed his/her respective Plan benefit calculation. PBGC confirmed that 

Delta's calculations were correct, and the Board found no errors in the Plan 

benefit calculations for either appellant. 

2. 	 PBGC then calculated each party's PBGC-payable guaranteed benefit. PBGC's 

Maximwn Guaranteed Benefit for any participant (the "MGB") is a published 

dollar amount that changes annually and is adjusted for the participant's age at 

Plan termination.2 

In cases where a benefit is assigned by a separate interest QDRO, the MGB is 

divided between the participant and alternate payee in proportion to the ratio of 

their normal retirement Plan benefits based on Plan provisions in effect on the 

later of 5 years before DOPT and the QDRO division date. PBGC then adjusts 

each party's portion of the MGB for his or her age. 

In this case, Plan benefit after reducing for the AP's Plan 

benefit (i.e., 100% of the accrued benefit through - 2005) was less than 1 % 

(0.9035%) of the entire pre-QDRO benefit. Thus, is entitled to 

0.9035% of the MGB, resulting in a PBGC- a able guaranteed benefit of $17.62 

before his Social Security Offset effective , 2017 and $15.33 thereafter. 

(See lines (7) to (11) ofthe 2014 Benefit Statement). 

The AP is entitled to the remaini~the MGB, which is $1,685.66 

per month (see lines (1) to (7) of--2014Benefit Statement 

Worksheet). In addition PBGC must account for the $513,531.62 lump-swn 

distribution that received when she commenced her benefit. 

Because the monthly benefit equivalent of her lump-sum distribution ($2,673.95) 

far exceeds her MGB ($1,685.66), she effectively has already received her full 

PBGC-payable guaranteed benefit from the Plan. Thus, her PBGC-payable 

guaranteed amount is now $0.00. 

3. 	 Finally, PBGC determined each party's benefit based on an allocation of Plan 


assets under ERISA § 4044. Because each party's benefit based on ·the allocation 


2 The MGB for plans that terminated in 2006 is $3,971.59 per month based on an age-65 retirement date. 

6 

of Plan assets is greater than each party's PBGC-payable guaranteed benefit, each 

party is receiving the greater benefit (i.e., the benefit resulting from an allocation 

of the Plan's assets). Finally, each party receives an additional ERJSA §4022(c) 

benefit amount based on PBGC's recoveries from Delta. 

The Participant and AP are Each Eligible for an Allocation ofAssets under ERJSA § 4044 

As previously stated, both the Participant and AP are eligible for a benefit based on the 

allocation of Plan assets under ERJSA § 4044. The six-tier asset allocation structure under 

ERISA § 4044 determines how a terminated pension plan's assets are distributed among various 

categories of benefits when the assets are insufficient to pay all promised benefits. The six 

priority categories are referred to as "PCl," "PC2," "PC3," etc. The Pilots Plan has no benefits 

in the first two categories (PCl and PC2), which relate to benefits derived from a participant's 

own contributions. The next priority category, PC3, covers a participant's or beneficiary's 

benefits that were "in pay status" (i.e., were being paid) three or more years before the plan's 

termination date ("DOPT-3"), or that would have been in pay status three years before 

termination if the participant had retired. PC4 generally covers benefits guaranteed by PBGC. 

PCS covers other nonforfeitable benefits (generally, benefits that are not in PC3 and are not 

guaranteed due to the limits described above). PC6 covers all other benefits under the plan (i.e., 

non-vested benefits). 

· As stated above, the Pilots Plan has no benefits in PC 1 and PC2, but has benefits in PC3. PC3 

benefits are defined under ERISA § 4044(a)(3)(B), which provides as follows: 

(3) Third, in the case of benefits payable as an annuity­

(B) in the case of a participant's or beneficiary's benefit (other than a benefit 

described in subparagraph (A)) which would have been in pay status as of the 

beginning of such 3-year period if the participant had retired prior to the beginning 

of the 3-year period and if his benefits had commenced (in the normal form of 

annuity under the plan) as of the beginning of such period, to each such benefit 

based on the provisions of the plan (as in effect during the 5-year period ending on 

such date) under which such benefit would be the least. 

PBGC treats separate interest QDRO benefits as separate benefits for the purpose of 

allocation of Plan assets and PBGC recoveries under ERISA §§ 4022(c) and 4044.3 In an 

October 4, 2013 decision (the "October 2013 decision"),4 the Appeals Board upheld PBGC's 

interpretation of ERJSA § 4044(a)(3)(B) as requiring the participant's PC3 benefit and the AP's 

Under ERISA § 206(d)(3)(J), an Alternate Payee is considered a "beneficiary" for all purposes of ERISA. 

Further, the PC3 requirements in ERISA § 4044(a)(3) apply "to each such benefit" of a participant or a beneficiary 

(including an AP) who was in pay status (retired) or could have been in pay status at DOPT-3. 

A redacted copy of the October 4, 2013 decision is available on PBGC's website, at 

http://pbgc.gov/documents/apbletter/Decision--Delta-Pilots-Retirement-Plan-2013-10-04.pdf. 

7 


3 
PC3 benefit to be determined separately by applying the PC3 rules to each individual's Plan 

benefit. Page 7 of the Appeals Board's decision stated: 

Under BRISA§ 20_6(d)(3)(J), an Alternate Payee is considered a "beneficiary" for all 

purposes of BRISA. Further, the PC3 requirements in BRISA§ 4044(a)(3) apply "to each 

such benefit" of a participant or a beneficiary (including an AP) who was in pay status 

(retired) or could have been in pay status at DOPT-3. Both you and the AP were in pay 

status at DOPT-3. Thus, your PC3 benefit and the AP's PC3 benefit are determined 

separately by applying the PC3 rules to each individual's Plan benefit. 

The October 2013 decision involved a 1995 QDRO that assigned a portion of a participant's 

Pilots Plan benefit to the AP. We note that your case is slightly different from the facts of the 

October 2013 decision, because your divorce and subsequent QDRO were not effective until 

.2005, after DOPT-3. 

PBGC policy, however, does not require that the QDRO be issued on or before DOPT-3 in 

order for an AP with a separate interest benefit to be eligible for a PC3 benefit. Rather, PBGC 

interprets ERISA § 4044(a)(3) as requiring that either (1) an AP was in pay status on DOPT-3, 

or (2) the Participant's earliest PBGC retirement date ("EPRD") was before DOPT-3.5 

Under the Pilots Plan, the EPRD is the participant's age 50; 501 h birthday 

was which is before DOPT-3 (September 2, 2003). Thus, because the 

Participant's earliest retirement age was before DOPT-3, each of the Participant's and the AP's 

benefits is properly assigned to PC3 under the governing PBGC policy. 

The Pilots Plan's assets funded 93.03847% of benefit liabilities in PC3. Additionally, under 

ERISA § 4022(c) PBGC pays additional benefits based on PBGC's recoveries from the plan 

sponsor. For the Pilots Plan, the ERISA § 4022(c) amount funds all remaining benefit liabilities 

in PC3. With all PC3 benefit liabilities satisfied, the remaining ERISA § 4022(c) amount funds a 

portion of the benefit liabilities in PC5a also. 

-and [AP] are also each eligible for benefits based on an allocation of assets 

to PCS Subcategory (a) ("PC5a") benefit provided under ERISA § 4044(a)(5), (b)(4)(A). 

Priority Category 5 covers any nonforfeitable benefits that are not assigned to PC3 (benefits 

payable at DOPT-3 or PC4 (PBGC-guaranteed benefits). PC5a benefits include any remaining 

nonforfeitable benefits on the basis of the Plan's provisions in effect at the beginning of the 5­

year period ending on the date of plan termination. 

5 Section E.3 of PBGC Policy 4.2-1, Allocation ofAssets - Priority Category 3. 

8 

How PCJ and PC5a Benefits Are Calculated 

The benefit formula provided by the Pilots Plan is: 

Monthly Normal Retirement Benefit = 60% ofFinal Average Earnings x (Years of Credited Service+ 25) 

The PC3 benefit is calculated differently from the Plan benefit because the PC3 benefit is based 

on: (1) an assumed benefit start date of October 1, 2003, and (2) Plan provisions in effect for the 

entire five-year period prior to the Plan's termination resulting in the smallest benefit. Each 

party's PC3 benefit is calculated separately but in the same manner, based on the assumed 

October 1, 2003 benefit start date (rather than the actual benefit start date). 

Specifically, the PC3 benefit is less than the Plan benefit because: 

(1) 	 The PC3 benefit is based on fewer years of Credited Service. Credited Service is 

only calculated up to DOPT-3 (September 2, 2003) for purposes of the PC3 

calculation, instead of the Plan's actual credited service freeze date of December 31, 

2004. 

(2) 	 The early retirement factor is less generous, due to the earlier, assumed PC3 

benefit start date of October 1, 2003. The difference is discussed in more detail in 

the next section of this decision. 

(3) 	 Plan provisions that increased the Plan benefit within the 5-year period prior to 

DOPT are not included. In particular, an increase ·in the IRC § 401(a)(l 7) limit 

occurred between DOPT-5 and DOPT that raised the amount of Final Average 

Earnings that could be taken into account in the Plan's benefit formula. This 

increase in the IRC § 401(a)(l 7) limit, however, is not included in either the 

Participant or Alternate Payee's PC3 benefit. Thus, the Final Average Earnings 

used is lower for the PC3 benefit than it is for the Plan benefit. 

Similarly, the PC5a benefit is based on Plan provisions in effect at the start of DOPT-5, 

resulting in the smallest benefit; it is larger than the PC3 benefit, however, because it is based on 

the actual benefit start date. PBGC's allocation of recoveries under ERISA § 4022(c) funded 

only 51.95696% of the PC5a benefit liabilities, and the Participant and Alternate Payee are each 

receiving a benefit in PC5a based on the funded percentage. 

The Early Retirement Factors Applicable to Each Party 

and Their Impact on Benefits 

Most defined benefit pension plans permit participants to retire . before the participant's 

normal retirement age (as defined by the plan) and receive a reduced benefit. ERISA requires 

that the early retirement benefit be at least the actuarial equivalent of the normal retirement 

9 

benefit. Many plans, however, provide participants incentives to retire early by providing an 

early retirement "subsidy." When one form of benefit has a greater actuarial value than another 

form, the difference in value is often called a subsidy. The Pilots Plan provides its participants 

an early retirement subsidy by applying an early retirement factor ("ERF") that is more favorable 

than the actuarially equivalent factor. 

Below is a table comparing the subsidized ERF to the actuarially equivalent factors for the 

assumed PC3 retirement date of October 1, 2003 (DOPT-3), for the AP's benefit commencement 

date, and for the participant's retroactive benefit commencement date. The DOPT-3 retirement 

date requires a lower early retirement factor, which is one reason why the Participant and 

Alternate Payee's PC3 benefits are lower than the Plan benefit. (PC5a benefits, in contrast, are 

calculated based on the actual Benefit Commencement Date ("BCD"). 

Subsi!lized vs. Actuarially Equivalent ERFs 

PC3-Presumed 

P's BCD 

Subsidized Plan ERF 0.74250 0.79750 0.85750 

Actuarial Equivalent Factor 0.44569 0.52453 0.63009 

An early retirement subsidy is payable only to the participant who retires before his normal 


retirement age. If a participant delays retirement until his normal retirement age, the entire 


pension will be considered a "normal retirement pension" and no early retirement subsidy will 


become payable. 


The AP in this case is not entitled to any portion of the early retirement subsidy because the 

-005 QDRO does not assign her any portion of the subsidy. Under Delta's written QDRO 

procedures, "the alternate payee will not be entitled to any portion of the [early retirement] 

subsidy unless the QDRO clearly states that the alternate payee has a right to receive such an 

amount." Likewise, longstanding PBGC policy states: "If a separate interest QDRO is silent 

about early retirement subsidies, PBGC generally will not pay any portion of the subsidy to the 

.alternate payee. "

6 

Because the AP is not entitled to the subsidized ERF, the early retirement benefit payable to 

her is the actuarial equivalent of her normal retirement benefit. Accordingly, when­

- elected to commence her benefit, Delta determined her monthly bene~ 

actuarially equivalent factor, which was less favorable than the subsidized ERF ­

would have been entitled to if he retired at the same date. 

Section E.2 of PBGC Policy 6.6-3, Qualified Domestic Relations Orders. 

10 

6 
The participant had not started his benefit when the Plan terminated, and PBGC was not 

notified of the participant's termination of em~. Thus, PBGC's- 2012 benefit 

detennination showed his benefit payable as of-, 2012. After obtaining the participant's 

date of termination of employment from Delta, the Appeals Board is changing the participant's 

date of termination of employment to~, 2007, which permits the participant to begin his 

benefit retroactively as of-,2007. 

The impact of the subsidized ERF (that is available onl to and only if he retired 

before his normal retirement age) is substantial. lan benefit is very small at age 

60 his normal retirement age under the Pilots Plan. Due to the~esubsidized ERF, 

Plan benefit becomes larger and larger, the earlier-retires. Likewise 

his PBGC-payable ben~er the earlier he retires. The date that 

retires has no impact o~Planor PBGC-payable benefit. 

The Error Found by the Appeals Board in [AP] Benefit 

The Appeals Board discovered that PBGC made an error in calculatin ~ [AP] PC5a 

benefit by using an incorrect number of years of credited service. 

The QDRO assigns the AP 100% of the accrued benefit through - 2005. PBGC 

the AP's benefit based on the cred' · ccrued through-, 2005. ­

date of hire and date of seniority is 1986. The total accrued service from 

, 1986 through- 2005, is , or-. 

PBGC, however, initially used a credited service of rather than • . The Appeals 

Board has corrected this error; as a result, PBGC-payable benefit is changed 

from $403.75 per month (per - 2012 benefit determination) to $373.10. A new benefit 

statement worksheet reflecting this correction is provided at Enclosure 2 (provided to­

-only). 

This error accounts for the sole change to the AP's PBGC-payable thI b fit as a result 

of this decision. PBGC, in its-, 2012 determination, informed that she had 

a net overpayment of $1,665.93, and her future benefit would be reduced to collect (recoup1r!JQI 

~ent. Because she filed a timely appeal, no recoupment action was initiated and " • 

-has continued to receive a PBGC monthly benefit of $403.75. Because the Appeals 

Board is correcting benefit to $3 73 .10, her net overp~ce has 

increased. When implementing the Board's decision, PBGC will notify-of the 

recoupment terms required under PBGC's regulation. The recoupment amount will not exceed 

10% of her monthly benefit, and no interest is charged. 

7 Section D.5 of PBGC Policy 5.2-4, Annuity Starting Dates, pennits a~ct a retroactive annuity 

starting dating only in specific circumstances enumerated in its policy. ---is permitted to elect a 

retroactive annuity starting date (as early as the first of the month following the date of tennination of employment) 

because he is receiving a benefit under an allocation of Plan assets under ERISA § 4044 and recoveries from the 

Plan sponsor under ERISA § 4022, and this benefit is substantially the same (i.e., does not increase with deferral) for 

a period of twelve months or more. 

11 
Decision 

Having applied the terms of the Plan, the provisions of ERJSA and PBGC's regulations to the 

retroactive 

facts in this 

benefit 

case, the 

commencement 

Appeals Board 

date 

is: 

of-

(1) granting 

2007, (2) changingr~ 

monthly benefit from $403.75 to $373.10 (before recoupment) to correct an error in PBGC's 

initial determination, and (3) denying both appeals with respect to all other issues raised. 

To retire retroactive to- 2007, must submit a retirement application 

to PBGC within 90 days of this decision. If he elects this (favorable) retroactive retirement date, 

PBGC will pay him a lump-sum amount to account for missed prior payments, which will 

include interest. 

If_elects a retroactive retirement date of- 2007, he is entitled to a 

mont~,645.80 decreasing to $1,373.91 at his age 65 (due to the Plan's Social 

. Offset), if paid as a Straight Life Annuity ("SLA") with no survivor benefits. 

may elect a different form of benefit other than a SLA when submitting his retirement 

pp c hon. 

-

This decision is PBGC's final action regarding PBGC's , 2012 determination of your 

PBGC-payable benefits under the Pilots Plan. Either of you may, if you wish, seek review of 

this decision in an appropriate U.S. District Court. If either of you have other questions about 

your PBGC benefit, you may call PBGC's Customer Contact Center at 1-800-400-7242 and ask 

to speak to the authorized representative assigned to the Pilots Plan. 

Sincerely, 

~~,~~~?· Member, Appeals Board 

Enclosure I (provided to only): 

(a) Benefit Statement dated 06/26/2014 (4 pages) 

(b) Benefit Statement Recalculation Worksheet dated 06/26/2014 ( 15 pages) 

Enclosure 2 (provided to~nly): (a) Ben~fit Statement dated 06/09/2014 (3 pages) 

(b) Benefit Statement Recalculation Worksheet dated 06/09/2014 (14 pages) 

12