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i d% Pension ~eneh Guaranty Corporation 

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

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2 , . JUL 0 7 2004 1 

Re: Bethlehem Steel 

Corporation Pension Plan, Case # 196603 

The Appeals Board has reviewed your appeal of PBW's December 18,2003 determination 

that your client,, is not entitled to a Permanent Incapacity (disability) pension 

under the Bethlehem Plan. For the reasons discussed below, the Board changed PBGC's 

determination by finding that he is entitled a Permanent hapacity Retirement. PBGC's Insurance 

Operations Department, the organization responsible for determining and paying benefits, will 

send him a new determination of his Permanent Incapacity benefit amount and benefit start date, 

with a new 45day right of appeal. 

PBGC's letter explained that, to qualify for a disability pension, a participant had to have 

met the Plan's requirements for the disability pension on or before December 18, 2002, the Plan's 

termination date. The letter said did not qualify because he became disabled after 

December 18,2002 according to Social Security information he included with his correspondence. 

PBGC's -letter also noted that he is entitled to a regular retirement benefit under the Plan. 

Your January 14, 2004 appeal said that, while became disabled under the Social 

Security Administration's definition of disability as of January 22,2003, he was disabled under 

the Plan's definition prior to December 18, 2002. You noted that the Social Security decision said 

that he was unable to his past relevant work in December of 2002. You also enclosed 

a copy of a letter frod-1 you believe demonstrates that bame 

disabled prior to December of 2002. 

The files available to the Appeals Board show that previously submitted to PBGC 

a number of documents relating' to his medical history. These include a September 19, 2003 

decision by Administrative Law Judge Dennis R. Kramer of the Social Security Administration's 

Office of Hearing and Appeals concerningentitlement to Disability Insurance Benefits 

under a program administered by the Social Security Administration. 
When the Bethlehem Plan terminated, effective December 18, 2002, it did not have 

sufficient assets to provide all benefits PBGC marantees under Title IV of the Em~lovee 

Retirement Income &ty Act (ERISA). The terms of the Plan, the provisions of ERISA, Ad 

PBGC regulations and policies determine entitlement to a guaranteed benefit. PBGC's 

regulatiqh require that, to be entitled to a guaranteed benefit, a participant must 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 29 Code of 

Federal Regulations (CFR) 554022.3. .4(a)(3)). In case, the Plan's termination date, 

December 18, 2002, is the earlier date. 

Under section 2.5 of the 1999 ~ethlehem'~1an for the Steel Division (Plan Number 244), 

there are two conditions that a participant must meet to be eligible for the Plan's Permanent 

Incapacity (disability) retirement: (1) the participant must have at least 15 years of contiriuous 

service and (2) the participant must be "permanently incapacitated" as defined by the Plan. 

As explained above, PBGC cannot guarantee a permanent incapacity benefit for1 1 , unless he satisfied both of the Plan's conditions for the benefit on or before December 18, 2002. 

The information available to the Appeals Board shows that satisfied the first condition 

because he had more than 15 years of continuous service as of that date. The files also show that 

he was employed as a millwright and that he had been out on Sickness and Accident Leave for 

several months when the Plan terminated. 

According to the September 19, 2003 decision by Judge Kramer, on December 3,2001, 

applied to the Social Security Administration (SSA) for Disability Insurance Benefits 

with a proposed SSA disability onset date of September 7, 2001. After his claim was denied 

initially and on reconsiderationjpl requested a hearing, which was held June 4,2003 before 

Judge Kramer. The Judge's decision explained that SSA defines disability for this purpose as "the 

inability to engage in any subsfm~ul gainful activity (emphasis added) by reason of any medically 

determinable physical or mental impairment that can be expected to result in death or that has 

lasted or can be expected to last for a continuous period of not less than 12 months." Judge 

Kramer concluded thatbecame disabled under SSA's definition on January 22, 2003, 

not on the September 7,2001 date sought byrl 

The Appeals Board notes, however, that the definition of permanent incapacity under the 

Bethlehem Plan is not the same as the SSA's disability definition nor is an SSA disability award 

a prerequisite for the Plan's disability pension. Plan section 2.5 provides that a participant is 

considered permanently incapacitated only if - 
(a) he has b&n totally disabled by bodily injury or disease so as to be 

prevented thereby from engaging in any employment of the type normally 

performed in his employee category; and 

(b) such total disability shall have continued for a period of [five] 

consecutive months and, in the opinion of a qualified physician, will be 

permanent and continuous during the remainder of the Participant's life. 

Thus, to be eligible for the Plan's disability benefit,disability must be both total and 

of such severity that it prevented him from "engaging in any employment of the type normally 

performed in his employee category" on or before December 18, 2002. I 

Judge Kramer's decision cites various medical reports submitted to SSA in 

support of his application for Social Security disability benefits These reports describe a series 

of chronic conditions with a steady decline in residual functional capacity from 1999 through 

' January 22, 2003, at which point SSA determinedwas unable to engage in any 

substantial gainful activity. For example, Judge Kramer found it - 

reasonable to conclude that, prior to January 22,2003jretained 

the residual functional capacity to perform a limited range of light 

work. . . . He was occasionally able to climb ramps and stairs but he was 

not able to climb ladders, ropes, or scaffolds at all. In addition, the 

claimant had very little use of his left arm. This is generally consistent 

with the State Agency medicaI opinion of record, as well as the functional 

capacity evaluation results from May 2002. It is also consistent with the 

reports fmm Steel Family Health Care Center that indicated that71 

could lift and cany twenty pounds occasional1 and ten pounds frequently. 

Filly, it is consistent with -I August 2002 opinion that 

could not perform his work as a millwright (which was medium 

exertion). 

Judge Kramer found thad 1 "has not engaged in substantial gainful activity since the alleged 

onset of disability. His work activity [for Bethlehem Steel] in 2002 was an unsuccessful work 

attempt and he was accommodated by the employer." 

In noting that "exertional limitations for the period prior to January 22, 2003 

. do not allow hi to perform the full range of light work, " Judge Krarner stated that "there are a 

significant number of jobs in the national economy that he could perform" and cited as examples 

information clerk, production inspector, messenger or usher. Because was unable to 

perform the full range of light work during the period preceding January 22, 2003, the Appeals 

Board found that, as of December 18,2002, could not have performed the duties of the 

type normally performed in his employee category, u.; a millwright in a steel plant. As a result, 

the Board found that he met the requirements for permanent incapacity under Plan section 2.5. 
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,. Having applied the law, the provisions of the Plan and PBGC policy to the facts in this 111 

m case, the Appeals Board found thatis entitled to a Permanent Incapacity Retirement 

'~t under the Bethlehem Plan. We will forward a copy of this letter to PBGC's Insurance Operations T Department, who will send him a new determination of his Permanent Incapacity benefit amount 

and benefit start date, with a new 45-day right of appeal. 

Meanwhile, if you or have questions, please call PBGC's Customer Contact 

Center at 1-800-400-7242. 

Sincerely, 

Linda M. Mini 

Member, Appeals Board