i>BGC Pension Benefit Guaranty Corporation 

Pmtectineamsrice~s P~~S~O~S 1200 K Street, N.W., Washington, D.C. 20005-4026 

1 JUL 1 5 2005 

eirton Retirement Program, Case # 1976 14 

Re i Weirton Steel Corporation Retirement Plan, Case #201097 (the Plans) 

- The Appeals Board has reviewed the appeals you filed on behalf of your client1 I 1 

PBGC's Determinations 

1 As explained below, 

and Your 

we 

Auueals 

are denying the appeals. ' 

PBGC's October 28,2004 determination letter told Ithat the $1 55.70 per month 

benefit she is currently receiving under the Weirton Retirement Program is correct. By letter dated 

November 29,2004, PBGC sent determination of her benefit under the separate 

Weirton Steel Corporation Retirement P an, w ich stated that the monthly benefit of $397.78 she 

currently receives under the Plan is the correct amount. Each determination letter pointed out that 

the benefit amount shown is the same amount received from the prior Plan 

administrator (i.e., before the Plans terminated and PBGC became responsible for payment of 

benefits). 

Your December 12, 2004 and January 10, 2005 letters of appeal said that you reviewed 

pension plan documentation that PBGC provided you pursuant to your August 2004 information 

request and "noticed that my client is not receiving the automatic qualified joint and survivor 

annuity (QJSA)' guaranteed under federal law." You noted that PBGC provided you only one side 

of the Weirton Post-Retirement Option Election and Certifications form (Option Form). You stated 

that, based on the documentation you received from PBGC and your client, it is your position that 

I Your December 12,2004 appeal letter includes reference to a pre-retirement survivor annuity 

(PRSA), which is not applicable in this case since the participant died after retiring. 
any "purported waiver of the QJSA is invalid under the strict rules concerning waiver of the QJSA 

under the Employee Retirement Income Security Act (ERISA), federal regulations, and the terms 

of the Plan. Specifically, you asserted that the waiver is invalid because: 

The Option Form lacks the signature (and seal) of a notary public required under page 18 of 

the Summary Plan Description (SPD) for the Weirton Retirement Program; 

The Plans failed to provide the retiree and spouse with a written explanation concerning the 

QJSA and the effects of waiving the QJSA; 

. The retiree and spouse did not receive a written explanation of the relative financial effects 

of waiving the QJSA in comparison with other optional forms of benefits; and 

. The Option Form "fails to advise the retiree and spouse as to the availability of any 

additional information or how they may obtain such information." 

You contended that your client is entitled to the full amount of the QJSA. 

In a letter dated May 4, 2005, you submitted the written "ex ert o inion" of 

bfthe University of Kansas School of Law. -,had rev! 

information on a "Post Retirement Option Election and CertificationsW(Exhibit C to 71 

opinion) and an "Explanation ofPost Retirement Optionn(Exhibit D to 

that Weirton had used in processing benefit elections under the plan^.^ 

and applicable regulations for a QJSA waiver because the form: 

opined that the written content of Exhibit C failed to satisfy the legal standards under ERISA 

. uses technical defined terms to describe the election options for the participant and the 

spouse, which are not defined or explained on the form; 

. does not present a general explanation, written in nontechnical language, of the relative 

financial effect of an election to waive the QJSA form of benefit payment; 

. contains no reference to the availability of additional information specified in Treasury 

Regulation 5 1.401 (a)-1 l(c)(3)(iii), or how a participant may obtain this information; and 

. does not meet the requirements in Treasury Regulation 5 1.401(a)-20, Q&A-36, which is 

applicable for Plan years beginning after December 31, 1988, concerning disclosure of 

2 It appears that, during the course of its administration of the Plans, Weirton made certain changes 

to its benefit election fonns. For example, the Option Form signed hi s apne page, twosided document, while Exhibits C and D that were attached to1 lopinion appear to be separate 

documents. There also were some minor variations in the wording of the fonns. The Appeals Board concluded, 

however, that the variations among the forms were not material with respect to the issues raised in your appeals. 
additional information concerning the relative values of the optional forms of benefit 

payment as compared with the QJSA benefit. The form fails this additional information 

requirement because it does not explain which optional forms ofplan benefits are subsidized 

in comparison with the QJSA form of benefit payment and does not reveal the interest rates 

used to calculate the optional benefit forms of payment. 

further concluded that, even if the Exhibit C form is supplemented by the 

Exhibit D document, the form fails to satisfy the legal standards for a valid QJSA waiver because: 

As with Exhibit C, Exhibit D fails to provide a general description of the technical terms 

"Surviving Spouse Benefit," "100% Co-Pensioner," and "50% Co-Pensioner"; 

The method of presentation in the table at the bottom of Exhibit D fails to adequately explain 

the relative financial effect of an election to waive the QJSA form. For example, Exhibit D 

does not explain that the "Surviving Spouse Benefit" on line 1 of the Table is a separate and 

unrelated type of benefit to the QJSA monthly pension that is shown on line 2, and that 

therefore the decision of whether or not to waive the QJSA form does not affect the amount 

of the Surviving Spouse Benefit; and 

As is the case with Exhibit C, Exhibit D does not meet the requirements in Treasury 

Regulation 5 1.401(A)-20, Q&A-36 concerning the relative values of the optional forms of 

benefit payment as compared with the QJSA benefit. 

1 asserted that, for plan years beginning after December 3 1, 1984, a waiver 

of the QJSA is not valid unless "it has been executed in full and complete compliance with all of the 

technical legal requirements for such consent." She therefore asserted that, if the spouse of a 

participant in the Plan has not executed a valid waiver, the spouse as a Plan beneficiary is entitled 

to receive the benefit due in the absence of a valid waiver, which under the Retirement Equity Act 

amendments to ERISA must be a QJSA. 

Discussion 

According to the records PBGC auditors obtained from Weirton Steel Corporation 

(Company), your client's husband retired from the Company on May 1, 

1991. On April 17,1991, he and G signed the Company's Option Form, waiving the 

Automatic 50% Spouse's Option (the QJSA) and electing instead to receive his benefit as a Life 

Annuity. The Option Form applied to his benefits under both Plans. 

In addition to the QJSA and other benefit o tions, both Plans provided a surviving spouse 

benefit at no reduction to the participant's benefit. ppclied on July 6, 1998, andm 

began receiving the surviving spouse benefits from both Plans effective August 1, 1998. 

The Weirton Retirement Program terminated as of December 6, 2002, and the Weirton Steel 

Corporation Retirement Plan terminated as of October 2 1,2003. PBGC is the trustee of both Plans. 
The Option Form is a one page, two-sided document. Unfortunately, only the back page of 

the form was initially included on PBGC's automated system, which is the reason you did not 

previously receive a complete copy of the document. We regret this oversight on PBGC's part. 

Enclosure I which the A eals Board obtained from PBGC, is a complete copy of the Option Form 

that ~'7 signed when he retired fmm the Company. 

You asserted that bpurported signature on the Option Form is in question" 

because she did not sign the consent in the presence of a notary public. You stated that, in the case 

of Lasche v. George Lasche Basic Profit Sharing Plan, 11 1 F.3d 863 (1 1" Cir. 1997), "the absence 

of a notary signature and seal alone invalidated the purported spousal consent." 

While the Option Form was not signed by a notary public, the form shows that 

?ignature was witnessed by a Plan representative, D. L. Brown. This signature by a Plan 

representatwe met the applicable statutory requirements, since ERISA 5 205(c)(Z)(A)(iii) and the 

identical Internal Revenue Code 5 417(a)(2)(A)(iii) provide that the spouse's consent to waiver of 

the QJSA may be witnessed by either a notaiypublic or aplan representative. The Appeals Board 

also found that your reliance upon the Lasche case is misplaced. The Lasche decision cites the 

actual statutory language and clearly and explicitly permits the signature to be either by a notary 

public or a plan representative. 11 1 F.3d at 865-66. The flaw that the court found in the waiver in 

Lmche was that there was no signature by anyone in the space for the notary public or employer. 

That defect is not present here, since the signature by the Plan representative was in the appropriate 

place on the Option Form. 

As noted earlier, it was Company practice to use one Option Form for benefits under both 

Plans since participants began to receive benefits under the two Plans at the same time. You 

correctly state that page 18 of the Weirton Retirement Program SPD refers only to the signature of 

a notary public, and thus does not expressly authorize signature by a Plan representative. However, 

the Weirton Steel Corporation Retirement Plan allows for the witnessing and signing to be by either 

a notary public or Plan representative. The Appeals Board decided that the substitution of the 

signature of a Plan re resentative for that of a notary public was at most a harmless error with 

respect t dppplwaiver of benefits under the Weirton Retirement Program. While you 

argued that 7 consent is "in question," you presented no information that would 

suggest that-1 did not, in fact, sign the form. Furthermore, based on its review of the 

record, the Appeals Board found no basis to question the validity of the signature. 

The court inButler v. Encyclopedia Britannica, Inc., 41 F.3d 285,293-94 (7'h Cir. 1994) held 

that the sole purpose of the witnessing requirement is to certify the validity of the spouse's signature. 

Additionally, as discussed above, the Plan representative's signature met ERISA's and the IRC's 

requirements, and it further provides evidence that signed the form. Thus, the 

Appeals Board concluded that the failure of the waiver form to meet the technical requirement in 

the Weirton Retirement Program SPD for a notarized signature should not provide a basis for relief 

to1 
Your appeal andopinion hrther contended that the Option Form did not 

provide the written explanation of the waiver required by ERISA section 205(c), Internal Revenue 

Code 9 401(a)(ll) and $417, and Treasury Regs. 1.401(a)-11(c)(3), $ 1.401(A)-20, Q&A-36, and 

1.41 7(e)-l(b)(2), and for that reason the waiver on the 0 tion Form is invalid. The Appeals Board 

concluded, however, that the validity o dpLaiver should not be determined solely by 

examining the language on the Option Form. While the statutory and regulatory provisions you cite 

require that a participant be provided certain information about benefit options in writing, they do 

not require that the information be provided on the form itself. 

As noted earlier, a Plan representative presented the retirement form(s) to1 1 

and witnessed their signing of the forms. This occurred more than 10 years before PBGC 

became responsible for payment of benefits under the Plans. Neither PBGC nor the Appeals Board 

participated in the retirement session(s) the Company had with your client and her husband. 

Therefore, we have no way of knowing what documents were given to them (other than the Option 

Form), nor do we know what they were told. However, it is the Board's view that a Plan 

representative likely would be knowledgeable about the provisions of the Plan and the policies and 

procedures for retiring and would communicate them to the retiring participant and his spouse. 

Furthermore) certified that the benefit options under the Plans had been explained to 

him and his spouse, and both acknowledged that they understood the effects of their decision. 

Additionally, the Appeals Board concluded that the Option Form itself demonstrates that the 

Company, as the Plans' Administrator, made an effort to comply with the applicable statutory and 

regulatory requirements. The front side of the Option Form provides a concise explanation of the 

QJSA and the effects of waiving the QJSA. It further states that "the various methods available for 

payment of benefits are explained in detail in the Summary Plan Description," and thus an additional 

written source of information was identified. Moreover, the bottom of the front side shows the 

various optional benefit forms available under the terms of the Plans and the benefit amounts the 

participant and spouse would receive under each option. This part of the Option Form also shows 

the benefit amounts for the "Surviving Spouse Benefit," with the notation that there is "no reduction 

to your pension" with respect to the payment of that benefit.' 

In Cagna v. Weirton Steel Corp. Retirement Plan-Plan 001,68 Fed.Appx. 344,345 (3d Cir. 

2003) (nonprecedential opinion), cert. denied, 540 US. 1158 (2004) (copy enclosed), the Third 

Circuit addressed the validity of a spousal waiver with respect to the same two pension Plans that 

are involved in these appeals. Although the court in Cagna found that defects existed in the Plans' 

waiver form, it rejected the claim that Mrs. Cagna was entitled to the QJSA in question. Among 

other things, the court noted that Mrs. Cagna "had an opportunity to inquire about the various 

options," but she signed the form consenting to the waiver of the QJSA. The court further concluded 

3 AS^ states, the Option Form does not show the relative values of the optional 

forms of benefit payment as compared with the QJSA benefit. The Appeals Board notes, however, that the apparent 

purpose underlying this "relative value" requirement is that participants and their spouses he informed of any 

disparity in value among the Plan's various benefit forms, including the QJSA. You have not demonstrated and we 

have not seen any evidence that any of the Plans' optional benefit forms are more or less valuable than the QJSA. 
that the "form does not misstate the options, and Ms. Cagna does not say that she received 

misleading answers to questions about the form. " Finally, the court concluded that any attempt to 

determine what Mr. and Mrs. Cagna would have chosen absent such defects was 900 speculative." 

The court stated: "For all we know, they may have discussed all options more fully and still chosen 

the waiver in light of his excellent health at the time." 

Thus, the Third Circuit in Cagna addressed essentially the same issues that you have raised 

in these appeals under similar facts. (as was the case with the Cagnas) had 

the opportunity to inquire about the various benefit options, since she and her husband signed the 

Option Form in the resen e of a plan representative. Additionally, there is no evidence showing 

tha/ had not understood the information on the form or had been misled. 

Accor mg y, as e cou concluded in Cagna, the Appeals Board likewise is unable to determine 

based on the information in your appeal and in PBGC's records, whether or not71 

would have waived the QJSA, if it is assumed that any possible defects with respect to the 

Plan's disclosure were corrected before they signed the Option Form in April 1991. 

Moreover, over 13 years have elapsed since 1 biped the waiver form. 

Until these appeals were filed, there was no record that eithed had disputed the 

form of their benefits. The Board concluded that it would be inappropriate, under these 

circumstances, to allow the election of a different form of benefits after the passage of this length 

of time. 

Finally, the Appeals Board observes that courts have held that procedural defects, such as 

a failure to comply fully with ERISA disclosure requirements, do not require a substantive remedy 

in a claim for benefits, unless they caused a substantive violation or themselves worked a substantive 

harm. Davis v. Combes, 294 F.3d 931 (7"' Cir. 2002) (in ERISA cases, plan administrator's 

substantial compliance with the statute and regulations is sufficient); Lewandowski v. Occidental 

Chemical Corp., 986 F.2d 1006 (6"Cir. 1993); Ellenburgv. Brockway, Inc., 763 F.2d 1091 (9" Cir. 

1985). C$ Hozier v. Midwest Fasteners, Inc., 908 F.2d 1 155 (3d Cir. 1990) (failure to comply with 

ERISA's disclosure provision does not provide participants with substantive rights with respect to 

claims for benefits in the absence of extraordinary circumstances). 

case 

The Appeals 

with the 

Board 

applicable regulatory requirements for 

concluded that there was at least 

QJSA 

substantial 

waivers. 

compliance in 

As discussed above, 

1 

the Option Form demonstrates that the Company made an effort to comply with these requirements. 

certified on th hat the Plan's benefit options had been explained to 

both him and his spouse, and onsented in writing to the QJSA waiver. You have 

provided no specific information with respect to the circumstances under which the waiver was 

signed that would rebut this certification. Accordingly, the Board found that the explanation 

provided tolikely was sufficient for them to make an informed decision 

concerning their benefits. 
As Mr. Eric Rofel's December 27, 2004 letter on behalf of the Appeals Board stated, in 

accordance with the Rules for Administrative Review of Agency Decisions, an opportunity to appear 

before the Appeals Board and an opportunity to present witnesses will be permitted at the Appeals 

Board's discretion. In general, an opportunity to appear will be permitted if the Appeals Board 

determines that there is a dispute as to material fact (see 29 Code of Federal Regulations $4003.55). 

The Appeals Board has concluded, however, that you have presented no dispute of material fact that 

requires a hearing to resolve. Accordingly, the Board denies your request for a hearing. 

Decision 

For the reasons discussed above, the Appeals Board found that 1 1 

waiver of the QJSA was properly executed and valid. Your appeals are therefore denied. This is 

the Agency's final action regardindplOctober 28, 2004 and November 29, 2004 

benefit determinations. Your client, may, if she wishes, seek court review of this decision. 

Sincerely, 

Sherline M. Brickus 

Member, Appeals Board 

Enclosures (2)