w E - A\ Pension Benefit Guaranty Corporation 

Prng 1200 K Street, N.W., Washington. D.C. 200054026 

b 

4. 

1 JUL 2 6 2003 

Re: Appeal Savage Indust& Inc., Factory Union 

Pension Plan (Plan or Union Plan) 

The Appeals Board reviewed your appeal ofPBGC's June28,2002 corrateddetermination of 

your benefit. For thereasonstated below, themeals BoardchangedPBGC's detamination by find'ig 

you are entitled to receive $207.53 until age 65 and $225.53 after age 65. 

PBGC 's June 2002 determination letter stated that you are entitled to a Straight Life Annuity 

(SLA) of $134.90 per month until age 6.5 (February 6,1996) and $152.90 after that age. This letter 

explained fbat because you are receiving estimated payments of $235.60, you would have received 

$4,436.64toomuchthrou&September 1,2002, whichPBGCwouldrecoup by reducing.yourPBGC 

entitlementby 10% until repaid PBGC's first(June 18,2001) determination, which you also appealed 

(Appeal 2001-1 131) contained similar information, except for the $18 increase at age 65. (Note: 

Estimated monthly payments of $235.60 have continued while your appeal has been pending.) 

Your July 15,2002 appeal claimed that your benefit shouldbe based on a benefit rate of$10 

instead ofthe $6,50ratePBGCused,as shownbythe Benefit Statement includedwithPBGC's letter. 

YOU described yo&transfer in 1976 hm aunion (Hasset Lodge#1420 I.A.M.) position with Savage 

Arms DivisionofEmhartCorporation(S~~EC) to amanagement position with Emhart Corporation 

(Emhart)unhl that employment ended inDecember of 1981. You alsodescribed the saledurine. - 1981 of 

 SAD^ totwoindi$du&who continuedthatbusiness as Savagehdustries, Jnc.(Savage). Younoted 

that in 1986 at age 55 you began receiving $63.76 per month ($30 times 5 years of service adjusted for 

earlypayment at age 55 and forthe Joint and 100%~urvivorAnnuity form you elected) from an ~rnhaa 

pensionplan for the 5 years you wereammaganent employee. You explained youcouldnot receive your 

Unionplan benefit until age62 and noted thedifficulty inobtainin~wur Union Planbenefit. You stated - - that in "1994 thePBGC forced Savage.. ."to pay yourpension, which apparently is the $235.60 you 

have been receiving. You also claimedthat PBGC's "formaldetemination"in 1994 couldnotbechanged - 

after 3 years per guidelines in the PBGC brochure, 'Your Right to Appeal." 

The record available to the Appeals Board contains the following data relevant to your case: 

Date of birth 

Date of hire 

- 

April 19,1951 

Date of transfer to salaried position September 6, 1976 (age 45) 
Date employment ended December 7,198 1 (age 50) 

Normal Retirement Date March 1,1996 

Actual retirement date March 1, 1994 (age 63) 

Because PBGC liles do not contain the SADIEC plan document in effect in 1976 when you 

transferredh SADIECunion to Ernhanmanagement employment, the Appeals Board will decide your 

case by applyingthe terms ofsuchplan as in effect beginningNovember 1,1978' (referred to below as 

the 1978 Plan). The 1978 Plan later became the Union Plannamedat the start of this letter. Althounhthe - 

Union Plan terminated November 1,1989, PBGC did not become its trustee until April 27,1998.. 

Secfion9.1 ofthe 1978Planprovides forvesting, as follows: "AnEmployeewhoseemployment 

with all members of the ControUed Group is terminated for anyreason other thanrehent or death, 

and who at the time of such termination shall have ten (10) or more yearsof~ontinuous senice, shallbe 

entitled to receivein lieuofanyotherretirement benetit hereunder, when heattains agesixty-five (65), a 

monthly retirement benefit computed in accordance with the terms of the Plan on thedate of such 

termination and based on his Credited Sewice at the time of such termination and shall be 

computed as a retirement benefit in accordance with Section 3.2." (Emphasis added.) 

Section2.24 ofthe 1978 Planclearly includesEmhart withinthemeaning of 'Controlled Group." 

When your employment with Emhart ended December 7,1981 at age 50, you met the 1978 Plan's 

conditionsfor entitlement to adefedvestedbenefit (i.e., ten yearsof Continuous (vesting) Service) and 

you had 26 years of Creditedfienefit amount) Serviceunderthe Plan -- from your hire in April of 195 1 

to your transfer to salaried employment on September 6,1976. 

Theissue, then, is theapplicable benefit rate- $6.50 as in effect for terminations in 1976 or the 

$10.00rateU.. . foranEmployee whoretiresonor afterNovember 1,1980." (1978Plan Section 3.3.) 

The Appeals Bod noted that the 1978 Phis not Therefore, we reviewed 

the records of other similarly situated UnionPLsnmembers for infodon as to how this provision has been 

applied. ~eadin~ togethe;~lanprovisions and thefactsofyourcase(specifically, your transfer from a 

Savageunion to anEmhart (lamesthanSavqe)managementposition) and the facts for similarly situated 

individuals, theBoard found that your accrued vestedbenefit underthe tennsof the 1978 plan %based on 

the$10 benefit rate in effect when your employment with the Controlled Group ended. Your accrued 

monthly benefit under the terms of the 1978 Plan, now the Plaflnion Plan which PBGC trustees. is 

$260.00 ($10.00 x 26 years). 

As noted above, although the Union Plan endedasofNovember 1,1989,PBGCdidnot become 

itstrusteeuntil April 27,1998. It was not PBGC, therefore, who determined the $235.60 amount you 

havebeenreceiving, Although PBGC wntinuedpaying youthis amount afterthey took overpaymentsfor 

the Plan, PBGC considers it an estimateuntil a formefit don me. Further, PBGC 

I Saw Arms Division Emhart Indusnies, hc. Employee Noa-Contibutory Pension Plan, first established 

January 1,1963 and amended From time to time until restated effective November 1, 1978. 
files donot contain a sheet showing how thefomerPlanadminishatorcalculat& the $~5.60 amount. 

An actuary forthe Appeals Board reviewedthe fileand believes that theS235.60 amount,was calculated 

basedon the $ I0 benefit unit, 25.55 years of Credited Se~ceand anEarly Retirement factor(EW of , - 92%. ourreview found that the plan's 92%~~fappliedfora63-~earold~artici~ant who was eligible 

for immediate early retirement underthe terms of either the 1978Plan or the UnionPlanwhenhis or her 

employment ended. As your employment endedwhen you were only age 50, theREf yo deferred 

vestedpayments beginning24 months early (age63) is 79.82 %. The Appeals Board found, therefore, 

that you are entitled to $207.53 until age 65 ($260 x 0.7982) and $225.53 ($207.53 + $18 Medicare 

supplement) after age 65. 

The Appeals Board noted that the kt date as ofwhichoverpayments~~litybereu,upalmderthe 

facts and circumstances ofthis case andPBGCpolicy isMarch 27,1998, Because the amount of your 

overpayment is less than $500 as of the date of your original appeal, PBGC will not seek recoupment. 

Having appliedPlan terms andPBGC policy to the facts ofyourcase, tbe AppealsBoard found 

youareentitledtcreceive$207.53pamonthmtil age65 and$225.53 atlerthat age(seeEnclosure), and 

youarenotrq~torepayimyamomt~PBGC. ThisistheMagencydeeisionreg;rrdingtheamount 

of your benefit and you may, if you wish, seek cow review. 

Please note that thisdecisionappiiaonly to your PBGC payment and has no effect on the benefit 

you are receiving from Black and Decker as a result of yourpaaicipation in the Ernhart salaried plan. 

We appnxiate you patience while your casehasbeetl pending and apologize for any umcem this 

mattermayharecaused. TheInsuranceOperations.Dqnttment, theoffi~nsponsiblefordeterminingand 

payingPB GCbenefits,will implement this decision byreducing you fuhnernonthlypayments to $225.53. 

Meanwhile, please call PBGC's Customer Contact Center at 1-800-400-7242 if you need other 

information about your PBGC benefit payment. 

Sincerely, 

Haniet D. Verburg 

Chair, Appeals Board 

Enclosure