"Vf\ 

PBGe 

Pension Benefit Guaranty Corporation 

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

www.pbgc.gov 

"---------_I 

October 13, 2006 

Re: 1 Case Number 195240 

LTV Steel Hourly Pension Plan (the "Plan") ~---~ 

Dear 1 I: 

We have reviewed your appeal of PBGC's September 30, 2005 

determination of your PBGC benefit and overpayment. As explained 

below, we must deny your appeal. We are, however, slightly 

i:o.creasing the pre-pIan-termination underpayment PBGC determined is 

owed to you, from $602.04 to $643."56:- 1 

LTV's Benefit Determination 

LTV determined the following plan benefits for you: 

(i) $1.974.'79 {$~,574.79 1 + $400.00 supplement} until age 62, 

and $1,574.79 per month for your lifetime thereafter. 2 LTV 

used 31.167 {30 + 1.167} years service. 

(ii) Your $1,574.79 benefit is a 5-Year Certain and Continuous 

annuity. The Plan provided $1,574.79 per month for a minimum 

of 5 years, through August 2004, even if you had died before 

then. ' 

(iii) The plan also provides a separate Surviving Spouse's 

Benefit ("SSB"): 

1 $1,656.69 Gross Floor Benefit - $81.90 DCP offset. 

$1,656.69 = $52.50 accrual rate x 30 years 

+ $70.00 accrual rate x 1.167 years. 

The $81.90 -offset is the annuity-equivalent LTV calcu~ated for 

$10,000 paid to you from the DCP. The "DCP" is the LTV S¢eel-USWA 

Pension Plan, sometimes referred to as the "Defined Contribution 

Pension" or the "Defined Contribution Plan." 

2 The $l r 656.69 is shown on Enclosure 1 page 1. The $1,656.69 

amount was scheduled to increase to $1,775.03 under a nonguaranteed formula effective after the LTV Hourly Plan terminated. 
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(a) $787.40 {$1, 574.79 x 50%} per month until your 

surviving spouse reaches age 60, 

(b) the larger of {$150.00, and ($787.40 - (widow's 

Social Security benefit x 50%)} for the remainder of her 

lifetime after she reaches age 60. 

PBGC's Determination 

On September 30, 2005, PBGC determined your PBGe benefit as 

follows: 

• None of your $400.00 temporary supplement is guaranteed under 

PBGC's regulation. 

• PBGC agreed with the $1,656.69 3 gross accrued benefit LTV 

used, based on 31.167 years service. 

• PBGC favorably reduced the DCP offset LTV used, from $81.90 to 

$61.14. ThUS, PBGe increased your full accrued Plan benefit, 

from $1,574.79 to $1,595.55 {$1,656.69 - $61.14} per month. 

• Because of your improved DCP offset, PBGC calculated you were 

underpaid $602.04 before the Plan terminated. (With this 

letter, we are correcting PBGe's calculation to $643.56. 4) 

• Your plan benefit increased from $1,029.71 5 to $1,342.72, 6 

under an amendment adopted in November 1999, and to $1,595.55 

effective August 1, 2000. PBGC must "phase-in" its guaranty 

of such increases adopted or effective within 5 years of a 

, plan's termination. Thus, your guaranteed benefit is 

$1;217.26 7 per month. 

• Expected legal recoveries are funding $43.16 of your nonguaranteed $400 tempo~ary supplement. Therefore, your PBGC 

) $52.50 accrual rate x 30 years + $70.00 rate x 1.167 years 

4 ($81.90 - $61.14) x 31 months September' 1999 through, March 

2002. 

5 $35 multiplier x 31.167 years - $61.14 DCP offset 

6 $3,886.60 pension earnings x (1.155% x 30 years + 1.26% x 

1.167 years)- $61.14 

7 Slightly more than $1,205.49 {$l,029.71 + ($1,342.72 

$1,029.71) x 40% phase-in + {$1,'S95.55 - $1,342.72} x 20% phasein} . The $1,205.49 estimate is not exact because the relative 

value of your minimum SSB changed as' your benefit increased. PBGC 

also included $.80 from the value of an SSB increase LTV 

calculated. SeePBGC's Benefit Statement., 
-3-

pension is $1,260.42 {$1,217.26 + $43.16} per month through 

November 2008, and $1,217.26 beginning December 1, 2008. 

• Your net overpayments -totaled $6,759.42 8 through December 

2005. The $6,759.42 total has been decreasing $54.94 

{$1,260.42 - $1,205.48} per month starting January 2006. 

• Your $1 / 260.42 and $1,217.26 PBGC benefits will be temporarily 

reduced by less than 3.5% until your net overpayments have 

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

overpayments. 

• PBGC is also guaranteeing a portion of your SSB: 

(a) $557.92 per month before your wife reaches age 60, and 

(b) a minimum of $111.96 per month after she reaches age 60. 

Issues You Raised 

In your october 26. 2005 letter/you questioned the service 

PBGC used: 

• You noted a ,--I ___ ...JI 1969 service date is shown on PBGC's 

Benefit Statement. 

• You submitted a document showing LTV recorded an earlier 

I 11968 service date. 

• You did not dispute that your service. ended 1 1 1999. 

• You concluded PBGC mistakenly used only 30 2/12 years service 

instead of the 31 2/12 years LTV used. 

• You questioned whether PBGC failed to apply a 1999 Plan 

amendment increasing. service up to 1 year for certain layoff 

periods. 

In a February 2, 2006 letter, PBGC's Authorized Representative 

told you the 1969 service· date is correct. On February 20., 2006, 

you asked the Appeals Board to further review your service. 

Discussion 

We found: 

• PBGC already used the 31 2/12 years service you requested. 

See the benef~t calculations on pages 2 and 3 of this letter. 

• The full elC!-psed time from the 1 1 1968 Service Date you 

proposed to I ~ 1999 is the 31 2/12 years PBGC and LTV 

used. - Thus, PBGC used the correct I f 1968 Service Date, 

a ($1,974.79 - $1,260.42) X 12 months, April 2002-March 2003 

- ($l,26D.42 - $1,205.48) X 33 months, April 2003-December 2005 
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even though the date is incorrectly shown on PBGC's Benefit 

Statement and incorrectly stated in PBGC's February 2006 

letter. 

• LTV's records show the following dates for you: 

(1) Hire date: V1965 

(2) Layoff due shutdown: /1988 

(3 ) Returned to work: /1994 

(4 ) Retirement Date: /1999 

You have not disputed PBGC's use of any these four dates, 

taken from LTV's records. See Enclosure 4. Also, the Plan 

document in effect in 1988 gave 2 years service while on layoff. 

See Enclosure 3 page 12 . Further, the amendment you cited 

increased your service on layoff 1 more year, to 3 years. 

Therefore I your service on layoff ended 1 11991. Thus, 

using the amendment you cited, you earned the following service: 

• 25 10/12 years, from I 11965 to January 22, 1991, plus 

• 5 4/12 years, from I 

'------ 1994 to I L-____ -" 1999 . 

We concluded, your correct service is 31 2/12 years (25 10/12 + 

5 4/12) years, the same as LTV and PBGC used. 

Decision 

Having applied Plan provisions to the facts in your case, we 

must deny your appeal. However, we are increaSing to $643.56 the 

pre-pIan-termination underpayment owed to you. 

This letter concludes your administrative remedies with 

respect to PBGC's September 30, 2005 determination. You may, if 

you wish, seek court review of PBGC's determination with respect to 

the issues you raised. Thank you for your patience while we 

carefully reviewed your appeal. 

Sincerely, 

jJ&. ~'. ~ 

William D. Ellis 

Appeals Board Member 

Enclosures :' 

(1) Copy of benefit calculation sheets .LTV produced (10 pages) 

(2) Copy of PBGC's Benefit Statement (9 pages) 

(3) Excerpt from Plan document in effect before 1999 (3 pages) 

(4) Excerpt from LTV's database on your· work history