ension Benefit Guaranty Corporation 

!OO K Street. N.W., Washington. D.C. 200054026 

JUN 1 5 2004 

~e: 1 Hartz Foods, Inc. Employee Pension Plan and Trust, 

Case #: 191921 

The Appeals Board has reviewed your appeal of PBGC's September 26, 2003 

determination of the benetit your father,l 1 was entitled to under the 

Hartz Plan. For the reasons stated below, the Board found no basis for changing PBGC's 

determination that PBGC cannot pay the Plan's pre-retirement death benefit. The Board further 

found that your father was entitled to an actuarially-reduced pension benefit beginning October 1, 

2002. PBGC's Insurance Operations Department, the organization responsible for determining 

and paying PBGC benefits, will contact you directly concerning your father's pension benefit. 

PB&'s September 26,2003 determination said that your father was entitled to a benefit 

of $501.46 per month, if payments began on February I, 2009, the first of the month following 

his 65th birthday, as a Straight Life Annuity with No Survivor Benefit. PBGC's letter also said 

that reduced payments could begin as early as October 1,2003 and that he could elect a different 

benefit form when he was ready to retire. 

Although PBGC was aware that your father died on April 5,2003, PBGC's September 26, 

2003 determination did not show the effect of his death upon his PBGC benefits. However, 

PBGC had also sent a letter on April 18, 2003 in response to one of your earlier phone calls 

asking about survivor benefits. That letter said that no one other than your father was eligible to 

receive benefits under the Hartz Plan. 

According to your November 2,2003 appeal and December 29,2003 supplement, your 

father knew he was terminally ill and called PBGC a number of times to make sure you would 

receive any death benefits payable under the Hartz Plan. You said that at different times you were 

both given conflicting information about your entitlement to death benefits. You believe you are 
entitled to a death benetit because Plan section 3.07 (which you submitted with your appeal) 

provides for a death benefit and your father named you as his beneficiary on forms he filled out 

for PBGC. 

As we discussed on the phone, there are two types of benefits that pension plans may 

provide when a participant dies: "death" benefits and "survivor" benefits. However, when a plan 

like the Hartz Plan terminates without sufticient assets to provide all plan benefits, the terms of 

the plan, the provisions of the Employee Retirement Income Security Act (ERISA), and PBGC 

regulations and policies determine the benefits PBGC can guarantee. For a benefit to be 

guaranteeable, PBGC's regulations require that a participant satisfy the conditions of the plan 

necessary to establish the right to receive the benefit on or before the earlier of the date the 

participant's employment ended or the date the plan terminated (see Enclosure 1). 

The files available to the Appeals Board show the following information for your father: 

1. 1 Date of With I 1 

January 1, 1968 

As you noted in your appeal, the Ham Plan does provide a separate preretirement death benefit. 

Section 5.l(e) of the Adoption Agreement to the 1993 Plan' provides that "the benefit payable on 

account of death is the present value of the Participant's Accrued Benefit" (see Enclosure 2). 

However, PBGC cannot guurantee pre-retirement death benefits payable on account of a death that 

occurs after the plan's termination date because the "the conditions of the plan necessary to 

establish the right to receive the benefit" were not satisfxd on or before that date. Although 

ERISA requires that plans lie the Hartz Plan provide a Qualified Pre-Retirement Survivor 

Annuity (QPSA), that requirement only applies to vested participants who are mamed on their 

date of death. Further, the only person entitled to the survivor portion of the QPSA is the 

participant's spouse on that date. 

' The pre-retirement death benefit provision you included with your appeal is from an earlier Plan 

document adopted in March 1976. and restated effective October 1. 1984. 
Under Plan section 5.l(a)(3), the automatic form of benefit for a participant who is not 

married on his or her annuity starting date is a single life annuity for the life of the participant 

with no survivor benefit. The Plan allows a single participant to elect a different form, but that 

election can only be made within 90 days of the annuity starting date and would not take effect 

until the annuity starting date. Your father's earliest annuity starting date for an actuariallyreduced benefit under the terms of the Plan would have been February 1,2004, the first of the 

month following his 60th birthday. 

PBGC's Earliest PBGC Retirement Date (EPRD) regulation, however, provides that under 

certain circumstances PBGC will allow a participant to receive an actuarially-reduced benefit 

starting at age 55. The EPRD regulation applies, for example, when a pension plan allows 

benefits to begin in an annuity form immediately upon separation bm employment regardless of 

the participant's age. As is discussed in the next two paragraphs, PBGC personnel apparently did 

not mention the EPRD regulation to your father. This likely occurred because (1) it was a new 

provision, with the final rule being published in the Federal Register on April 8, 2002; and (2) 

PBGC had not yet determined that this EPRD rule applied to the Plan. 

The files available to the Appeals Board show that your father fast contacted PBGC about 

his pension and any death or survivor benefits payable in September, 2002, when he was age 

58.5. PBGC's files include a completed PBGC Form 707 (Designation of Beneficiary), signed 

and dated by your father on October 1, 2002, which designated you as his beneficiary. His 

submission of this form is consistent with your statement that your father desired to provide you 

with any survivor or death benefits that were payable by PBGC. 

Ai that time, PBGC had not made its determination regarding the applicable EPRD. Had 

the determination been made, PBGC would have advised your father that he could apply for an 

actuarially-reduced pension benefit immediately and provided him with a list of optional benefit 

forms (e.g., life only, life with survivor benefit, period certain and continuous) from which to 

choose. According to PBGC's benefit payment procedures, PBGC will begin paying a benefit for 

which a participant is immediately eligible, effective the first of the month following receipt of 

a completed application for the benefit. Based on the facts described above, the Board found that 

your father would have applied for his benefit in September, 2002 had he been told about the 

EPRD rules. As a result, we further found that his annuity starting date is October 1, 2002. 

Having applied the law, PBGC's regulations and the provisions of the Ham Plan to the 

facts in this case, the Appeals Board found no basis for changing PBGC's determination that 

PBGC cannot pay the Plan's pre-retirement death benefit. The Board further found that your 

father was entitled to begin receiving an actuarially-reduced pension benefit on October 1, 2002. 
J @ We will forward a copy of this letter to PBGC's Insurance Operations Department. They 1 will contact you. as your father's designated beneficiary, concerning both the form of his benel ! and the amount of any backpayments owed. This is the agency's final decision on this matter and 

w;j 

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.. u you may, if you wish, seek court review. .. z !$ 

2 1 If you have questions, please call PBGC's Customer Contact Center at 1-800-400-7242. 

Sincerely, 

Linda M. Mii 

Member. Appeals Board 

Enclosures