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#b Pension Benefit Guaranty Corporation pPffiBoc 1200 K Street, N.W., Washington, D.C. 20005-4026 

NOV 2 7 2002 

Re: Appeal ; Republic Retirement Plan (the 

"Republic Plan" or "Plan1t) 

The Appeals Board has reviewed your appeal of PBGC's 

August 27, 1998 determination (remailed, on December 11, 1998 to 

your correct permanent address) of your guaranteed benefit under 

the Plan. Although the Board found that your monthly PBGCguaranteed benefit is $1,524.98 payable as a Straight Life Annuity 

("SLA") from October 1, 1986 through August 1, 1989 instead of the 

$1,526.65 monthly amount PBGC determined, and that your monthly 

PBGC-guaranteed benefit payable as an SLA on and after September 1, 

1989 is $1,331.38 instead of the $1,331.80 monthly amount PBGC 

determined, PBGC will not make this change due to a PBGC policy 

regarding de minimis benefit changes. The Board also found that 

PBGC must reduce the $1,331.80 amount to recoup the net overpayment 

you have received. PBGC's Insurance Operations Department will 

contact you directly about the amount and date of your recoupment 

adjustment. 

Determfnation and Appeal 

PBGC's determination letter indicated that your guaranteed 

monthly benefit payable as an SLA, which provides a benefit for 

your lifetime but no survivor benefit, was $1.526.65 before the 

month in which you turned age 65, and. $1,331.80 thereafter. It 

noted that PBGC had paid you estimated benefit amounts of 

(1) $1,577.30 from October 1, 1986 through January 1, 1988, 

(2) $1,526.65 from February 1, 1988 through August 1, 1989, and 

(3) $1,377.80 thereafter. The letter stated that because PBGC had 

paid you too much, it would reduce your monthly benefit by $71.65 

per month to recoup the total amount of the overpayment, excluding 

interest, unless you appealed the determination within 45 days of 

the August 27, 1998 letter. PBGC included a Benefit Statement 

showing how it calculated your guaranteed benefit. 

PBGC adjusted your monthly benefit from your estimated benefit 
of $1.377.80 to your final amount of $1,331.80 effective 

December 1. 1998. At the same time, PBGC deducted the $71.65 

monthly recoupment amount from your $1,331.80 guaranteed benefit to 

collect the previous overpayment. Since December 1, 1998, you have 

continued to receive $1,260.15 per month ($1,331.80 minus $71.651. 

After PBGC reduced your monthly payment in December 1998, you 

contacted PBGC to ask why. It appears that PBGC mailed your 

original August 27, 1998 determination letter to one of your 

temporary Florida addresses. Around December 11, 1998, PBGC sent 

another copy of the August 27, 1998 letter to your permanent 

address in Indiana. 

In your timely December 19, 1998 appeal letter, you said that 

there were two confusing statements in your determination letter, 

namely, (1) the letter said that your guaranteed benefit would be 

reduced by $71.65 to collect your previous overpayment, but your 

pension check was reduced by $116.95, and (2) your Benefit 

Statement referred to a "1943 Plan Offset amount of $46.51" but you 

"have never received that amount because (you) elected option 4 and 

never received any amount more than $42.14 since (you) retired." 

Discussion 

As noted above, PBGC reduced your payment on December 1, 1998 

by two separate amounts. First, it adjusted your payment from your 

estimated guaranteed benefit of $1,377.06 to your guaranteed amount 

of $1,331.80, a reduction of $45.26. It then reduced your 

guaranteed amount by $71.65. Thus, the total reduction in your 

payment effective December 1, 1998 was $116.91 ($45.26 plus 

$71.65). And $1,377.06 minus $116.91 is equal to $1,260.15, the 

benefit payment you are currently receiving from PBGC. 

Please note that the Plan terminated without sufficient assets 

to provide all benefits PBGC guarantees under Title IV of the 

Employee Retirement Income Security Act of 1974, as amended 

("ERISA"). The terms of the Plan, the provisions of ERISA, and 

PBGC's regulations and policies determine the amount of any 

guaranteed benefit to which you are entitled. 

Before the Plan terminated, LTV calculated your benefit 

payable as an SLA before age 65 under the 1970 Plan's formula to be 

$1,861.32 per month, and $1,625.02 thereafter. You received the 

$1,861.32 amount starting on your date of retirement (January 1, 

1980). As of October 1, 1986, the day after the Plan terminated, 

your benefit payment was reduced to an estimated guaranteed benefit 

amount. With the help of former LTV personnel, PBGC calculated 

your estimated maximum guaranteed benefit to be $1,577.30 before 
*I age 65. Between October 1, 1986 and February 1, 1988, PBGC 

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obtained and studied Plan documents and the Plan's history, and w decided that your estimated guaranteed benefit was overstated. 

S 

I Effective February 1, 1988, PBGC reduced your estimated guaranteed .n benefit by $46.51, a monthly benefit amount payable as an SLA that 

is the actuarial equivalent (based on the 1943 Plan's definition) 

of the benefit you are receiving under the 1943 Plan. After that 

reduction, you received a $1,530.79 PBGC payment through the 

August 1, 1989 payment. Effective with the September 1, 1989 

payment, your estimated benefit was again reduced by an amount 

equal to less than one-half of your estimated Social Security Old 

Age benefit, calculated in accordance with the 1970 Plan's 

definitions. As a result of that reduction, your PBGC payment 

became $1,377.08. 

The Appeals Board reviewed PBGC's calculations and Republic's 

calculations and found that PBGC and Republic agreed as to the 

amount of the pre-age-65 and post-age-65 amounts payable under the 

1970 Plan's benefit formula. Please note, however, that as a 

result of the merger of the 1943 Plan and the 1970 Plan effective 

January 1, 1976, PBGC considers the employer-provided portion of 

any benefit paid to you under the 1943 Plan to be a benefit paid 

out of the terminated Republic Plan's funds. Thus, the total 

benefit payable to you under the Republic Plan is the sum of your 

benefit payable under the 1970 Plan's benefit formula and the 

benefit payable to you under the 1943 Plan. 

You noted in your appeal letter that you are not receiving 

your 1943 Plan benefit as an SLA, but rather, under "Option 4." 

Unfortunately, documents available to the Appeals Board do not 

include any election forms for the various options offered to 

participants under the 1943 Plan. For most participants, however. 

we do have documents showing total 1943 Plan benefit amounts 

payable alternatively as (1) Life Annuity without Refund (an SLA); 

(2) 10-Year Certain and Continuous Annuity; (3) 15-Year Certain 

and Continuous Annuity; (4) 20-Year Certain and Continuous Annuity 

("20YC&CAt' ; and (5) Cash Refund Annuity ("CRA" ) . 

Based on the documents of other Plan participants, the Appeals 

Board determined that the 1943 Plan defined an actuarially 

equivalent benefit as a benefit of equivalent value calculated in 

accordance with the 1951 Group Annuity Mortality Table for Males 

with a three-year set-back, and an interest rate of 4%. Using that 

definition, the Appeals Board determined that you are receiving 

your 1943 Plan benefit either as a 20YC&CA or as a CRA. Because 

the Board does not have enough information to calculate your 1943 

benefit as a CRA, and because the definition of actuarial 

equivalence described in the previous paragraph says that the 
monthly amount that LTV calculated (and PBGC accepted) of $46.51 

payable as an SLA is equivalent to $42.09 (very close to $42.14) 

payable as a 20YC&CA, the Board concluded that you must be 

receiving your 1943 Plan benefit as a ZOYC&CA. 

The benefit that PBGC is allowed to pay you is less than your 

full Republic Plan benefit because of the legal limits on 

guaranteed benefits set by Congress when it enacted ERISA. One of 

these limits, the Maximum Guaranteed Benefit ("MGB"), affects your 

final guaranteed benefit amount. 

For plans that terminated in 1986, the MGB payable as an SLA 

starting at age 65 cannot be more than $1,789.77 per month. 

Because you started receiving your monthly 1943 and 1970 Plan 

benefits before age 65 and before the Plan's termination date, PBGC 

must adjust that $1,789.77 amount to account for your age as of the 

Plan's termination date. Because you are receiving your 1970 Plan 

benefit as an SLA, and your 1943 Plan benefit as a 20YC&CA, PBGC 

must adjust the MGB so that both benefits can be compared to the 

MGB in the form in which you receive your PBGC-payable benefit. 

Because PBGC did not know that you were receiving your 1943 Plan 

benefit as a 2OYC&CA rather than as an SLA, the Appeals Board 

recalculated your MGB. Please see the Enclosure for details of our 

recalculation of your MGB, and your corrected guaranteed benefits 

before and after age 65. 

After correcting your MGB amounts, the Appeals Board found 

that PBGC's determination overstated your guaranteed benefits. 

However, under a PBGC policy regarding small downward changes in 

benefits, PBGC will not change your pre-age-65 and post-age-65 

guaranteed benefit amounts. 

Deci don 

Having applied the law, provisions of the Republic Plan, and 

PBGC rules to the facts in this case, the Appeals Board found that 

your monthly PBGC-guaranteed benefit is $1,524.98 payable aa a SLA 

from October 1, 1986 through August 1, 1989 instead of the 

$1.526.65 monthly amount PBGC determined, and that your monthly 

PBGC-guaranteed benefit payable as an SLA on and after September 1, 

1989 is $1,331.38 instead of the $1,331.80 monthly amount PBGC 

determined, but that PBGC will not make these changes due to a PBGC 

policy regarding de minimis benefit changes. The Board noted that 

the $1,260.15 you have been receiving during the pendency of your 

appeal takes into account an estimated recoupment amount of $71.65, 

which PBGC determined before you received your PBGC determination 

letter. We will send a copy of this decision letter to PBGC's 
Insurance Operations Department, and they will determine the final 

amount by which they must temporarily reduce the $1,331.80 amount 

to recoup the net overpayment ypu have received. 

This decision is the final agency action on the issues you 

raised in your appeal. You have exhausted your administrative 

remedies, and may, if you wish, seek court review of this decision. 

We appreciate your patience during our review of your case. 

If you have questions about your benefit, please call PBGC's 

Customer Service Center at 1-800-400-7242. 

Sincerely, 

Michel Louis 

Appeals Board Member 

Enclosure