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Pension Benefit Guaranty Corporation - - . 

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1200 K Street, N.W., Washington, D.C. 200054026 

Re: 71 Avtex Fibers, Inc. Retirement Plan for Salaried Employees (the 

"Salaried Plan") [Case No: 1057461 and AWex Fibers, Inc. Retirement Plan for 

Hourly Employees (the "Hourly Plan") [Case No: 1057481 

The App,eals Board has reviewed your appeal of PBGC's April 3, 2000 corrected 

determination of your Salaried Plan benefit. For the reasons stated below, the Appeals Board 

found that you are entitled to $374.15 per month from the Salaried Plan and $44.75 per month 

from the Hourly Plan, for a total 'from both plans of $418.90. 

and Appeel . 'I ... . .. In a corrected benefit determination dated November 20,2002, PBGC found that you were 

entitled to an Hourly Plan benefit of $90.95 per month payable as a Straight Life Annuity. You ' 

did not appeal this determination. 

On April 3,2003, PBGC sent you a corrected benefit determination under the Salaried 

Plan, which said you were entitled to $327.95 per month payable as a Straight Life Annuity. 

PBGC's April 3,2003 determination noted in detail that your total benefit entitlement from both 

the ~ourl~ Plan and the Salaried Plan is $418.90 per month. PBGC's determination also noted 

that this amount is the same amount shown in a May 15, 1990 letter to you from Kathy Maffei; 

the Pension Manager for Avtex Fibers, Inc. (see Enclosure 1 .) The determination advised you 

that because you had been overpaid, your Salaried Plan benefit would be reduced $3.61 per month 

until the total overpayment, without interest, was repaid. 

In your April 7,2003 letter to the Appeals Board, you said your total monthly benefit from 

the Salaried Plan should be $367.00 per month &I your total benefit from the Hourly Plan should 

be $90.95 per month. You claimed that at one time your Salaried Plan benefit was $418.90 per 

month and your Hourly Plan benefit was $108.68, and you do not understand why PBGC bas now 

reduced these amounts. 
PBGC fdes contain the following personal data, which you do not contest m your appeal: 

(1) date of bi 4-1 (2) date of hire -- June 3, 1958. (3) date Uansferred from 

Hourly Plan to Salaried Plan -- December 1. 1966, (4) date your employment with Avtex ended - 

November 30, 1989, and (5) date of retirement - July 1, 1990. The Salaried Plan was amended 

to freeze benefit service as of March 31, 1984; therefore, your service after that date does not 

count in computing your benefit. The HoukIy and Salaried Plans both terminated, effective 

~une 30, 1988, and VBGC subsequently became trustee. -'. 

PBGC's files also show that, at the time of your retirement, you were eligible to receive 

benefits from both the Hourly and Salaried Plans. For participants like you, it was apparently 

plan practice for the Company to combine the benefits from both Plans into a single monthly 

payment. However, PBGC determines your guaranteed benefit amount sepurateiy for each Plan. 

This has apparently led to some confirsion as to the total amount payable by PBGC. 

The Summary Salaried Plan Description in effect when the Salaried Plan terminated 

provides: 

"A Member will receive credit for service as an hourly employee of the Company 

in computing his retirement benefit under the [Salaried] Plan. The Member's 

retirement benefit . . . will be reduced by the actuarial equivalent value of any 

benefit &e Member is entitled to under any plan . . . for the benefit of hourly 

employees. " [Emphasis supplied.] 

Thus, the Salaried Plan first credits you for fl your years of service and then subtracts your 

Hourly Plan benefit. In this way. the Salaried Plan reflects your service as a salaried employee 

and the Hourly Plan your service as an hourly employee. 

The fdes show that you have received a number of previous PBGC benefit determinations 

under both Plans. As part of our review, we looked at both your Salaried Plan and Hourly Plan 

benefit calculations. We applied the Salaried Plan's terms in effect at your date of retirement. 

Because the Hourly Plan's terms in effect at the date of your transfer to salaried employment, 

December 1, 1966, were not available, we looked at the later available Hourly Plan documents 

and the former Plan Administrator's calculation of your Hourly Plan benefit. 

Your Salaried Plan benefit is calculated as a percentage of monthly average compensation 

multiplied by years of service (I 56 x Final Average Compensation x Total Years of Service). ne 

Salaried Plan formula was applied to the facts in your case and is detailed in Enclosure 2. Please 

note that your Salaried Plan benefit is $418.90 per month prior to application of the Hourly Plan 

benefit offset (see Line (5) of Enclosure 2). The Hourly Plan formula is based on a benefit rate 
\ 

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B ($7.50) multiplied by your years of service as an Hourly Plan prticipaL. PBGC'S most recent 

e hourly calculation of $90.95 per month was based on a date of hire of July 1, 1951; however; this 

rs' .. date is inconsistent with oh; PBGC records and your own statements on-the matter. (F'BGC used 

9 your correct hike date of June 3, 1958 to compute your Salaried Plan benefit.) .. @ By correaing your date of hire to June 3, 1958, your years of service as an Hourly Plan 

2 participant decreases and correspondingly, your Hourly Plan benefit decreases from $90.95 to 

$44.75 per month ($7.50 [benefit rate] x Years of Service as an hourly participant x Early 

Retirement Factor = $44.75). See Line (7) of Enclosure 2. Because the Hourly Plan benefit 

servesas ari offset to your Salaried Plan benefit, the Appeals hard found that your Salaried Plan 

benefit increases from $327.95 to $374.15 per month ($418.90 - $44.75 = $374.15). See Lie 

(8) of Enclosure 2. 

As a consequence of correcting an error in your Hourly Plan benefit calculation, you have 

been underpaid under the Salaried Plan and overpaid under the Hourly Plan. If the result is a net 

underpayment, PBGC will pay your underpayment in a lump sum with interest. If the result is 

a net overpayment, PBGC will recover any overpayments without interest byreducing your 

monthly benefit by not more than 10%. 

Having applied the Plan's terms and PBGC's policies to the facts in this case, the Appeals 

Board found that you are entitled to $374.15 per month from the Salaried Plan and $44.75 per 

month from the Hourly Plan, for a tout1 from both plans of $418.90. As a result, you have been 

underpaid underhe Salaried Plan and overpaid under the Hourly Plan. 

We will send a copy of this decision to PBGC's Insurance Operations Department, the 

office responsible for determining and paying benefits, who will correct your Hourly and Salaried 

Plan benefit amounts. They will also contact you directly concerning your net overpayment or 

underpayment. 

This is the Agency's fml action with respect to this matter, and you may, if you wish, 

seek court review. If you have any questions, please call PBGC's Customer Contact Center at 

1-80040-7242. 

Sincerely, 

Linda M. Mizii 

Member, Appeals Board 

Enclosures (2)