#h Pension Benefit Guaranty Corporation PwC 1200 K Street, N.W., Washington, D.C. 20005-4026 ",---w"- 

APR *2 e rn 

~e: PBGC Case.Number 155895, 

Frederick and Nelson Pension Plan ("Plan" or "F&N Plan") 

The Appeals Board has reviewed your appeal of PBGC's November 13,2000 determination 

(remailed to you on January 30,2001) that you are not'entitled to a PBGC benefit because when your 

employment ended the Plan required at least 10 years of service to qualify for a vested pension 

benefit and you did not meet this requirement. As explained below, the Appeals Board changed 

PBGC's determination by fmding that you are 100%vested under the Plan. 

In your February 10,2001 appeal, you requested that we use your August 16,1978 hire date 

with Lipman's Family Department Store to determine your eligibility for a Plan benefit. You 

explained that when Frederick and Nelson purchased Lipman's in 1979, employees were told that 

their original hire date with Lipman's would be honored for all Frederick and Nelson benefits. 

Your appeal also said that when Lamonts (also a clothing store) purchased Frederick and 

Nelson in 1989, employees were told that: (1) their original hire dates with Lipman's would be 

honored, (2) the cutoffdate for pension eligibility under the Plan was October 1988; and (3) anyone 

with 10 years of service as of October 1988 would be eligible for a pension. You stated that you 

were still employed with the Company in October 1988 and had earned more than 10 years of 

service at that time, and that you did not leave Lamonts until 1993. You enclosed a copy of your 

Lipman's employment record and a Batus Retail Group Retirement Enrollment Form, both showing 

your date of hire as August 16, 1978. 

PBGC files reveal the following: 

Frederick and Nelson, Inc. (or F&N) was ownd5by Marshall Field & Company 

from 1929 to 1986, and the F&N Plan descended from the Marshall Field Retirement 

Plan ("Marshall Field Plan"), effective December 1, 1968. 
. On April 20, 1979 Marshall Field acquired pmperty from Dayton-Hudson (also 

known as Lipman Wolfe or "Lipman's"), and former employees of Lipman's were 

granted vesting service under the Marshall Field Plan, but accrued benefit service 

under the Marshall Field Plan only after the acquisition. 

. Marshall Field was sold in 1982 and effective January 1,1985, salaried participants 

of the Marshall Field Plan were merged into the Batus Retail Group Pension Plan 

("Batus Plan"). The Batus Plan also covered participants of The Crescent Stores, Inc. 

and a number of other employers. 

. On September 26,1986, Batus sold Frederick and Nelson and The Crescent Stores 

to outside investors (however, assets and liabilities reportedly were not transferred 

until June of 1987). As part of the sa1e;liability for the F&N Plan and Crescent 

employees transferred eom the Batus Retail Group Pension Plan to a new plan, the 

F&N Plan. 

. The F&N Plan was frozen for salaried employees on December 31, 1986. An 

attempt was made to terminate the Plan in 0ctober.of 1988; however, the Plan was 

not terminated until May 26,1992 and PBGC became the Plan's trustee on July 17, 

1998. 

Based on the information you provided and PBGC files, we have confirmed your August 16, 

1978 hire date with Lipman's and agree it should be used to determine your eligibility for a benefit 

under the Plan. 

The F&N Plan document applicable to you (i.e., the 1986 Plan) defines "Employer" as 

"Frederick & Nelson Operatioy, Inc., and its Amliate, The Crescent Stores, Inc., and any successor 

by merger, any corporation that acquires the employer's business and adopts the Plan . . .." 

PBGC files show that your F&N employment ended August 29,1987. However, your Social 

Security reported earnings show that during 1987 you were employed by F&N, Crescent, and 

Wongs Kitchen, Inc. The Social Security reported earnings also show that during 1988 you were 

paid by F&N Acquisition Corporation and Lamonts Apparel, Inc., and that over one-half of yow 

reported earnings for that year were from F&N Acquisition. 

According to a June 2,1988 letter fmm Lamonts to a Crescent employee similarly situated 

to you, the earliest date.on Lamonts' payroll for Crescent employees is July 20, 1988. The lener also 

states that participation in the Lamonts Employees' Retirement Trust @ension plan) begins on 

July 20,1988, and that The Crescent would pay the Crescent-earned benefit. 
!! Based on your Social Security earnings aid Lamonts' June 2, 1988 letter, the Appeals Board 

111 !, decided that you earned vesting service from August 28,1978 through July 19,1988. 

IR 

Under the terms of the F&N Plan, participants who did not reach age 65 (normal retirement 3 age) while employed with the Employer must complete at least 10 Years of Service to be entitled 

to a benefit (Amcles IV and VII). Plan section 2.40 pmvides that a Participant is credited with one 

Year of Service for each calendar year in which he or she he completes 1,000 or more Hours of 

Service, defined in section 2.17 as each hour for which an employee is directly or indirectly paid 

or entitled to payment for the performance of duties or for reasons such as vacation, holiday, illness, 

etc. 

The Appeals Board found that you had at least 1,000 hours of service during each of the 

calendar years 1979 through 1988. Thus, you met the Plan's 1 @year service requirement for vesting. 

For your information, the files show that the Lamonts Apparel, Inc. Employee's Retirement 

Trust ("Lamonts Plan") was terminated on July 24,2000, and thereafter PBGC became its trustee. 

PBGC files also reveal that you were paid a lump sum !?om Lamonts prior to the Lamonts' Plan 

termination on July 24,2000. 

Having applied the provisions of the Plan and PBGC rules to the facts of your case, the 

Appeals Board found that you had at least 10 years of service under the F&N Plan and, therefore, 

are vested. PBGC's Insurance Operations Department, the office responsible for determining and 

paying PBGC benefits, will issue you a new determination with appeal rights. 

We apologize for not responding sooner and we appreciate your patience during the 

processing of your case. If you need other information fiom PBGC, please call our Customer 

Contact Center at 1-800-400-7242. 

Sincerely, 

Sherline M. Brickus 

Member, Appeals Board