Pension Benefit Guaranty Corporation Pemc 1200 K Street, N.W., Washington, D.C. 20005-4026 "Im-mn 

I August 20, 2004 

I 

Re: Case 192187, Duro-Test Corporation 

Pension Plan (the "Plan") 

Dear 1 1 

The Appeals Board has reviewed your appeal of PBGC's March 31, 

2004 determination that you are not entitled to a benefit under the 

Plan. As explained below, the Board changed PBGC's determination 

by finding that you are entitled to a deferred vested benefit. 

A Review of Corres~ondence Prior to PBGC's Formal Determination 

In an April 9, 2001 letter, you requested information from the 

PBGC about your benefit entitlement, stating that you worked for 

the Duro-Test Corporation ("Duro-Test") from August 1993 until it 

closed in February 2000. In a June 26, 2001 letter, PBGC informed 

you that it had no information indicating you were a participant in 

the Plan. 

On July 3, 2001, you completed and signed a "Plan 

Participation Information" form. You stated that you were a Sales 

Representative in the Puerto Rico Division of Duro-Test from 

August 2, 1993 to February 16, 2000. You also authorized the PBGC 

to obtain your earnings for the years 1993 through 2000, as 

reported to the Social Security Administration ("SSA"). 

Examination of that data shows that your earnings for 1993 through 

1999 were reported to the SSA by the Duro-Test International 

Corporation ("Duro-Test International"). 

In a February 14, 2002 letter, PBGC informed you that you were 

entitled to an estimated monthly benefit of $123.71 commencing at 

age 65. PBGC's estimate appears to have been based on your SSA 

earnings and on the information that you supplied on PBGC's P-lan 

Participation Information form. PBGC, however, noted its estimate 

was subject to change if PBGC's audit of the Plan produced 

different results. 
PBGC's Benefit Determination and Your Auueal 

PBGC's March 31, 2004 benefit determination letter stated: "We 

have finished our review of the plan and your records, and we have 

determined that you are not entitled to a PBGC benefit. We do not 

have documentation indicating you were a participant in this Plan." 

In your April 19, 2004 appeal, you stated that your General 

Manager, Mr. Raul Torrens, gave you a copy of a Duro-Test document 

(which you enclosed) entitled "Group Benefit Program for Puerto 

Rico Employees." This document provides brief summaries of a 

number of group benefit programs, including the following: 

Pension: You are automatically enrolled on the pension 

plan after one year of service and at least 21 years of 

age. Vesting is after five years of continuous service. 

In your appeal, you also stated that you were one of the Company's 

"Top Producers" in sales from 1993 through 2000. 

Coverase of Employees of the Duro-Test International Corporation 

After completing its final Plan audits and its actuarial 

valuation, PBGC concluded that employees who resided in Puerto 

Rico were employed by Duro-Test International (rather than DuroTest) and that Duro-Test International employees were not covered 

under the Plan. In support of this position, PBGC stated that the 

Puerto Rico employees were never included in the Plan sponsor's 

annual census or the Plan's actuarial valuation. 

Under Sections 1 and 2 of the Plan, participants (referred to 

in the Plan as Members) were those '. . . employed by the Company 

in a sales, supervisory, professional or salaried capacity. " 

Section 1.3 defined "Company" as the Duro-Test Corporation and ". . . any of its subsidiaries or affiliated companies which adopts 

this Plan with the approval of the Corporation as provided in 

Section 10." Section 10 provided for adoption of the Plan by a 

subsidiary or affiliate, and it also provided that the Duro-Test 

Corporation could extend the Plan to any division, plant or 

location. 

The Plan's 1976 Summary Plan Description ("SPD") states: 

The Pension Plan summarized in this booklet covers the 

eligible employees of: Duro-Test Corporation, Tungsten 

Products Corporation, Jewel Electric Products, Inc., 

Duro-Test International Corporation, Arc Ray Electric 
Corporation, Luxor Lighting Products, Inc., Duro-Lite 

Lamps, Inc. (Underlining added.) 

In addition, the Plan's 1980 SPD states: 

The Benefit Program outlined in this booklet is available 

to eligible employees of Duro-Test and each of its 

'related firms. So, when we use the word "Company", we 

mean : Duro-Test Corporation, Tungsten Products 

Corporation, Arc-Ray Electric Corporation, Luxor 

Lighting Products, Inc., Duro-Test International 

Corporation,, Duro-Lite Lamps, Inc. (Underlining added.) 

The Board also noted that the material you submitted with your 

appeal states that Duro-Test would provide group benefits 

(including eligibility for a pension benefit) to its Puerto Rico 

employees. 

The Board reviewed the Plan's records and found two former 

sales representatives who worked in Puerto Rico for Duro-Test 

International and who were treated as Plan participants by Plan 

officials prior to PBGC's trusteeship of the Plan (January 31, 

2001). We note that one of these two employees was included in the 

Plan's 1997 and 1999 actuarial valuations. Thus, the Board's study 

of Plan practice does not support the conclusion that Duro-Test 

International employees were never included in the Plan's records 

or the Plan's actuarial valuations. 

The Board found that the Plan covered eligible employees of 

the Duro-Test International Corporation, because (1) the Plan's 

Summary Plan Descriptions explicitly stated that the Plan covered 

eligible employees of the Duro-Test International Corporation, (2) 

the material on group benefits that you enclosed with your appeal 

provided further support for that conclusion, and (3) our review of 

Plan practice does not contradict that conclusion. 

Independent Contractors vs. E~D~ov~~s 

In an internal communication supporting its formal 

determination, PBGC stated that it was quite possible that the 

sales representatives working in Puerto Rico for Duro-Test 

International were independent contractors, rather than employees. 

PBGC's Participant Data Audit ("PDA") discusses membership in 

the Plan, as quoted below: 

"It may be necessary in the future to verify a person who 

maintains that he was covered under the plan is not a 
independent salesman. These persons were utilized by 

Duro-Test in an effort to save expenses and were not 

eligible to be covered under any of the fringe benefits 

such as health insurance and retirement plans. . . . The 

Independent Sales Representative program was ended 

December 31, 1998 ." 

As noted, the Board has identified two sales representatives 

who worked in Puerto Rico for Duro-Test International and who were 

treated by former Plan officials as participants in the Plan. From 

this, we conclude that the sales representatives who worked in 

Puerto Rico for Duro-Test International were not necessarily 

independent contractors, rather than employees. 

In addition, we note that Duro-Test International reported 

your earnings to the SSA and that this is more characteristic of an 

employer-employee relationship than of an employer-contractor 

relationship. Similarly, the "Group Benefit Programs for Puerto 

Rico Employees" that you submitted with your appeal describes a 

number of fringe benefits that are inconsistent with the 

description of the Independent Sales Representative program found 

in PBGC's PDA. 

In summary, based on the preponderance of evidence, the Board 

found that you were an employee of Duro-Test International rather 

than an independent contractor. 

Your Entitlement to a Deferred Vested Pension 

Section 7 of the Plan provided that a participant became 

entitled to a deferred vested benefit after completing five years 

of Service. On PBGC's "Plan Participation Form", you stated that 

you were a Sales Representative in the Puerto Rico Division of 

Duro-Test from August 2, 1993 to February 16, 2000. Your SSA 

earning report shows that you worked for Duro-Test International 

from 1993 through 1999. Thus, the Board found that you completed 

the required five years of service for entitlement to a deferred 

vested benefit. 

Decision 

The Board found that you are entitled to a deferred vested 

benefit under the Plan. PBGC will send you a new benefit 

determination implementing this decision. 
The new determination will be subject to appeal with regard to 

matters not covered by this decision. If you have any questions 

about your benefit, please contact PBGC's Authorized Representative 

at 1-800-400-7242. 

Sincerely, 

William D. Ellis 

Acting Chair, Appeals Board