A 

1 'BGC Pension Benefit Guaranty Corporation P~~~~~~~~~

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

1 AUG 1 5 2005 

Re: case l99929, Thunderbird Mining Company 

(TMC) Pension Plan (the Plan) 

The Appeals Board reviewed your appeal of PBGC's May 11,2005 determination 

that your client, was not entitled to a disability retirement benefit from the Plan 

because the Social Security Administration did not deem your client to be permanently 

disabled on or before July 24, 2003, the Plan's termination date. For the reasons stated 

below, the Board changed PBGC's determination by finding thatlsatisfied the 

Plan's conditions for a Permanent Incapacity Retirement benefit before the Plan 

terminated. 

As a result of our finding. PBGC will determineestimated disability 

retirement benefit commencement date, his estimated monthly disability retirement benefit 

amount, and his estimateddisability retirement benefit end date, if any. PBGC will begin 

paying your client the estimated disability benefit amount in the near future. Once PBGC 

finishes processing the Plan, it will senda new determination of his final PBGC 

monthly benefit amount(s), and his final benefit commencement date(s). He will have 45 

days to appeal that determination. 

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 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. 

PBGC's records show that the Plan terminated on July 24, 2003 and that PBGC 

became the Plan's trustee oo st 19, 2004. PBGC's records also show that-1 

and was hired by Eveleth Taconite Company, a 

predecessor of TMC, on June 3,1976. The record indicates thatlast worked for 

TMC on June 25,2002. 

With an April 19, 2005 letter to PBGC, you enclosed a "fully favorable decision of 
the Social Security Administration on finding him disabled beginning June 15, 

2002." Your letter noted that the SSA's decision also found that your client "had medical 

improvement and that his disability ended October 6, 2003." Your letter informed PBGC 

that has reapplied for social security disability benefits and you expect a 

favorable decision, which will find ldisabled again beginning in May 2004 due to 

"subsequent worsening." Your letter concluded with the following statement: "I assume 

that he will receive his pension now." 

The record shows that your client suffers from a degenerative disease in both 

knees, and that underwent a series of surgical procedures, which provided him 

with enough relief so that the SSA considered him no longer to be disabled. 

PBGC responded to your April 19, 2005 letter by a letter addressed tor1 

dated May 11.2005. That May 11,2005 determination letter told your client that because 

the SSA's award letter did not deem him "permanently" disabled on or before the Plan's 

termination date (July 24, 2003), he is not eligible to receive a disability pension from the 

Plan. 

Because PBGC's May 11,2005 letter did not state that your client had 45 days to 

appeal PBGC's denial of disability retirement benefits, the Appeals Board accepted your 

July 7,2005 letter to FBA Pension Benefit Analyst Cindy Hochgesang as a timely appeal. 

Your July 7 appeal letter said that PBGC's determination letter is "very confusing." Your 

letter said that while it "is true that the disability ended in October 2003 . . -has 

reapplied for Social Security benefits and we expect a favorable decision finding him 

disabled, a second time, beginning May 2004 and thereafter, with no end date to the 

disability (unlike the first time)." 

Discussion 

Section 2.5 of the 1999 Pension Agreement between TMC and the United 

Steelworkers of America provides as follows: 

"Permanent lncapacitv Retirement 

2.5 Any participant who shall have had at least 15 years of continuous service 

and who shall have become permanently incapacitated shall be eligible to 

retire on or after August 1, 1999 and shall upon his retirement (hereinafter 

'permanent incapacity retirement') be eligible for a pension. A participant 

shall be considered to be permanently incapacitated (as 'permanently 

incapacitated' is used herein) only (a) if he has been totally disabled by bodily 

injury or disease so as to be prevented thereby from engaging in any 

employment of the type covered by the Basic Agreement, and (b) after such 

total disability shall have continued for a period of five consecutive months, 

and, in the opinion of a qualified physician, it will be permanent and 

continuous during the remainder of his life. Effective July31,2000, for any 

cases pending on or after that date, a participant shall also be 

considered to be permanently incapacitated (as 'permanently 

incapacitated' is used herein) if the participant has been granted 
disability benefits under the Social Security Act with an award effective 

during the period he was accruing continuous service as provided in 

Section 5. Incapacity contracted, suffered or incurred while the participant 

was engaged in, or resulted from his having engaged in, a criminal 

enterprise, or resulting from future service in the armed forces and which 

prevents him from returning to employment with the Company and for which 

he receives a military pension, shall not entitle a participant to a pension 

under this paragraph 2.5. Such pension shall be discontinued if such 

participant shall cease to be permanently incapacitated prior to age 62. The 

permanency of incapacity may be verified by medical examination prior to 

age 62 at any reasonable time." 

The bold text in the body of section 2.5 is in PBGC's copy of the 1999 Pension Agreement 

and reflects changes from the 1994 Pension Agreement. 

Based on the above, the Plan's provisions deem a participant to be "permanently 

incapacitated" if the participant receives an award of disability benefits from the SSA. 

The record clearly shows that the SSA awarded a disability benefit for a 

period of disability that started before the Plan terminated while he was accruing 

continuous service and thatwas still disabled as of the Plan's termination date. 

As a result, the Appeals Board found that your client satisfied the Plan's eligibility 

conditions for a disability retirement benefit on or before the Plan's termination date. 

Please note, however, that Plan section 2.5 above states that any disability 

retirement payments under the Plan "shall be discontinued if such participant shall cease to 

be permanently incapacitated prior to age 62." Similarly, PBGC regulations provide as 

follows: 

"a participant may be required, upon the request of the PBGC, to submit to an 

examination or to submit proof of continued total and permanent disability. If the 

PBGC finds that a participant is no longer so disabled, it may suspend, modify, or 

discontinue the payment of the disability benefit." 

29 Code of Federal Regulations § 4022.6(c). 

Thus, because of the possibility of suspension, it is very important that you submit 

documentation to PBGC as soon as it becomes available regarding any further disability 

benefit determinations that your client receives from the SSA based on his degenerative 

knee disease. Please send any SSA documentation to: 

Pension Beneffi Guaranty Corporation 

Attn: Benefits Administration & Payment Department 

Trusteeship Processing Division 8 

P. 0. Box 151750 

Alexandria, Virginia 2231 5-1 750 
Decision 

Having applied Plan provisions, the law, and PBGC's rules to the facts of this case, 

the Appeals Board changed PBGC's determination by finding that satisfied the 

Plan's conditions for a Permanent Incapacity Retirement benefit before the Plan 

terminated. 

The Appeals Board will forward a copy of this decision to PBGC's Benefits 

Administration 8 Payment Department (BAPD), the organization responsible for issuing 

benefit determinations and making benefit payments. BAPD will determiner1 

estimated disability retirement benefit commencement date, his estimated monthly 

disability retirement benefit amount, and his estimated disability retirement benefit end 

date, if any. PBGC will begin paying your client the estimated disability benefit amount in 

the near future. 

In the meantime, if 1 has any questions, he may call PBGC's Customer 

Contact Center at 1-800-400-7242. 

Sincerely, 

Michel Louis 

Appeals Board Member 

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