6 #W!l N 

3 Pension Benefit Guaranty Corporation. 

uumaHMurr- 1200 K Street, N.W., Washington, D.C. 20005-4026 2 

November 13, 2003 

'P 

Re: Appea.1 

Beneficiary oft Schlensker Drilling 

Defined Benefit Pension Plan ("Plan") 

Dear 

We are responding to your appeal of PBGC's September 29, 2000 

determination that your survivor's benefit is a $223.34 per month, 

Straight Life annuity. PBGC calculated you were overpaid $11,416.86. 

As explained below, we are changing your guaranteed benefit to 

$384.20 per month. You have been underpaid instead of overpaid. 

Your Awpeal 

In your March 29, 2001 appeal, asked why PBGC waited until 2000 

to determine your $335.27 estimated-PBGC benefit was too high. You 

stated PBGC error caused your overpayments, and reducing your benefit 

now creates financial hardship for you. You concluded PBGC should 

continue to pay you $335.27 per month. 

Pre-Retirement Survivor Annuity 

The Plan provides you a Pre-Retirement Survivor's Annuity (PSA) 

because your husband died before retiring. Your Plan-provided PSA is 

an annuity with the same actuarial value as the value of your late 

husband's accrued benefit. [Plan Sections 5.5(b) (v) and 5.8(a)] 

Relevant Data 

Your husband last worked on June 18, 1987, the Plan's 

termination date. 

On July 15, 1990 your husband died, at age 60 years 4 months. 

. On September 24, 1990, the Plan's administrators offered you 

choices for your Plan-PSA's annuity form, including: 

i) a $496.30 per month temporary 120-month certain-term 

annuity, or 

ii) a $384.20 per month Straight Life Annuity. 

You chose the temporary but larger $496.30 monthly benefit. See 

Enclosure 1. Your $496.30 benefit started effective 

September 1, 1990. 
Effective June 1, 1992, your benefit was reduced to your current 

$335.27 estimated PBGC benefit, a Straight Life ~nnuit~.' 

PBGC's Determination 

PBGC determined your Plan-provided PSA is not a "qualified preretirement annuity'' (or "QPSA") as defined in the law. Therefore, 

PBGC determined your guaranteed benefit is only the Plan's "minimum 

spouse's death benefit." [Plan sections 5.5(h) & (i)] Thus, PBGC 

calculated your guaranteed benefit as a $223.342 per month Straight 

Life Annuity. 

The Appeals Board has found a plan-provided PSA based on the 

actuarial value of a deceased spouse-participant's accrued benefit is 

"qualified" under the law. Furthermore, the Board decided your PSA 

was not disqualified by the Plan administrator's decision to offer 

you alternate annuity forms. Therefore, the Board decided PBGC 

guarantees your Plan-provided PSA. 

Your Benefit Form 

PBGC guarantees only life annuities. Thus, PBGC determined PBGC 

must pay your QPSA as a .Single Life Annuity. 

Decision 

The Appeals Board decided your guaranteed benefit is the $384.20 

per month Straight Life Annuity the Plan administrator calculated for 

you. You have been underpaid instead of overpaid. PBGC's Authorized 

Representative will contact you about paying your past underpayments 

plus interest. 

Your benefit was temporarily suspended at the end of May 

1992, before PBGC became the Plan's trustee in 1994. On 

February 1, 1994: i) PBGC started paying you $335.27 per month, and 

ii) PBGC issued you a second check for $6,705.40 ($335.27 x 20 

months, June 1992 through January 1994). PBGC omitted interest now 

due for the 20 months June 1992 through January 1994. 

$496.30 x 90% J&S Factor x 50% Survivor benefit. PBGC 

mistakenly: i) used,the $496.30 benefit you were receiving instead 

of your late husband's $610.70 ($7,328.38 + 12 months) accrued 

benefit, and ii) omitted actuarial reduction for starting your 

benefit before your husband's age 65. 
Thank you for your patience during this careful review of your 

appeal. If you have any questions, please contact PBGC's Authorized 

Representative at 800-400-7242. 

Sincerely, 

William D. Ellis 

Appeals Board Member 

Enclosure: 

1) The Application to Retire signed by you on September 24, 1990 

(2 pages)