#I Pension Benefit Guaranty Corporation P6mc 1200 K Street, N.W., Washington, D.C. 20005-4026 Y IGOMMINTAUNCI 

SEP 1 6 2004 

Re: Lockwood Corporation Retirement Plan 

("Lockwood Plan"), Case #: 165918 

The Appeals Board has reviewed your appeal of PBGC's August 24, 1998 (remailed 

March 26,2004) determination of your benefit under the Lockwood Plan. As explained below, the 

Board changed PBGC's determination by finding that you are entitled to a normal retirement benefit 

of $410.09 per month as a Straight Life Annuity. 

PBGC determined that you are entitled to a monthly benefit of $315.46, if payments began 

April 1, 2004 (the first of the month following your 65'h birthday) as a Straight Life Annuity. PBGC 

also included a benefit statement, showing the information PBGC used to calculate your benefit. 

You appealed PBGC's determination because you believe your monthly benefit should he 

$410.09,. instead of $3 15.46. According to your letter, when McCall Industries, Inc. purchased 

Lockwood, McCall increased the initial benefit service percentage of all Lockwood employees to 

10%. You said PBGC did not take this increase into account in determining your PBGC benefit. 

To support your appeal, you included a copy of the prior Plan Administrator's benefit calculation, 

a letter from McCall notifying you of your benefit amount, and a Social Security Administration 

Potential Private Pension BenejZt Znfonnation notice, all of which show the $410.09 amount. 

Discussion 

Effective January 1,1976, Lockwood, an associated company of Alaska Interstate Company, 

adopted the Alaska Interstate Company Retirement Plan ("Alaska Plan"). Section 2.01 of the Alaska 

Plan provides for a normal retirement benefit equal to the sum of: 

(i) 10% of a Participant's Final Monthly Compensation ("FMC"), plus 

(ii) 1 % of the Participant's FMC multiplied by the Participant's Credited Service. 

In 1981, Alaska Interstate Company sold some of its associated companies, including Lockwood, to 

McCall. Effective January 1, 1981, McCall established the McCall Industries, Inc. Retirement Plan 

("McCall Plan") as a restatement of the Alaska Plan. Section 2.01(1) of the McCall Plan provides 

for a normal retirement benefit equal to the sum of: 
(a) 2% of a Participant's FMC multiplied by the Participant's Benefit Service (not to exceed 10 

full years), plus 

(b) 1 % of the Participant's FMC multiplied by the Participant's Benefit Service in excess of 10 

full years, 

provided, however, that in no event shall the amount so determined be less than the Participant's 

Accrued Retirement benefit under the Alaska Interstate Retirement Plan as of December 31, 1980. 

Effective July 31, 1986, the McCall Plan froze all benefit accruals and made participants 

100% vested in their accrued benefits as of this date. In 1988, as part of the restructuring of McCall, 

the McCall Plan changed its name to the Lockwood Corporation Retirement Plan. The Lockwood 

Plan terminated, effective August 15, 1994, and PBGC subsequently became trustee. 

The benefit formulas under the McCall (renamed Lockwood) Plan and the Alaska Plan are 

equivalent for participants with 10 or more years of benefit service. The Lockwood Plan formula 

results in a lower benefit, however, for participants with fewer than 10 years of benefit service. The 

records PBGC's auditors obtained from the former Plan Administrator contained no evidence that 

the original McCall Plan was amended to continue the Alaska Plan benefit formula for active Alaska 

Plan participants who became participants in the McCall Plan. Consequently, PBGC applied the 

provisions in effect when the Plan terminated to determine your $315.46 per month PBGC benefit. 

Based on a review of Plan documents, company correspondence and benefit calculation 

worksheets prepared by Plan officials before the Plan terminated, the Appeals Board concluded that 

the McCall Plan Administrator used the Alaska Plan formula, with its initial 10 % accrual, to compute 

the benefits of participants who worked for Lockwood before January 1, 1981. PBGC's files also 

include a 1988 letter from the then-Manager of Administrative Services at an associated company, 

which said the 10% was added to pension calculations "regardless of how long someone was with 

the Company. " 

Decision 

Based on the information described above, the Appeals Board found that your benefit should 

be determined under the Alaska Plan formula in effect on December 3 1, 1980. As a result, you are 

entitled to a normal (age 65) benefit of $410.09 per month as a Straight Life Annuity. This is the 

same amount the former Plan Administrator calculated for you. 

If you have questions or wish to begin receiving your benefit, please call PBGC's Customer 

Contact Center at 1-800-400-7242. 

Sincerely, 

Linda M. Mizzi 

Member, Appeals Board