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.0, I emion ion P~GC 1200K Street, Benefit N.w.; Washington, Guaranty D.C. 20005-4026 ~~&rat& B ",--*m,.. 

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FEB 1 9 2004 

Re: 1 wirerex Manufacturing Pension Trust Plan; Case #: 192034 

The Appeals Board has reviewed your appeal of PBGC's July 1, 2003 determination that, 

althqugh you are entitled to a monthly benefit under the Wiretex Plan, you will not receive the 

benefit because: , 

1. On October 17, 2000, the United States District Court for the District of Connecticut 

issued a Default Judgment that .found you and another individual "jointly and severally 

liable to the [Plan] as of June 30,2000 in the amount of $1,127,263.90;" 

2. The Coua also required @at, should the defendants failto make fill payment to the Plan 

within 10 days of the date of the Court's order, 'any benefits payable under the Plan to 

[the defendants] shall be offset by the amounts remaining to be paid to the Plan by [the 

defendahts];" and 

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3. The value of your benefit is less than the $1,127,262.90 owed the Plan. 

As explained below, we are denying your appeal. We found, however, that your spouse is 

entitled to a survivor benefit should you die before she does. PBGC's Insurance Operations ' 

Department, the organization responsible for determining and paying benefits, will send you a new 

determination reflecting this survivor benefit. 

According to your July 17, 2003 appeal and August 5, 2003 supplement, you were not 

aware ofany misapplication of any monies fmm the Witex Plan nor did you receive any monies 

directly or indirectly from any withdrawals from the pension fund. You also said you resigned 

from Wiretex Manufacturing Company on June 12, 1996, and relinquished all duties as trustee 

of the Wiretex pension fund. To support your appeal, you attached a number of exhibits that 

highlight what you believe are false statements submitted to the Court. You asked that PBGC 

either not implement the October 17, 2000 Default Judgment or seek to have it overturned. 
The ~iretei Plan terminated, effective June 21, 2000, and PBGC subsequently became 

trustee. On March 2, 2W, before the Plan terminated, the United States *&ent of Labor 

(DOL),. not PBGC, filed a complaint against you for violations under sections 404 ("Fiduciary 

Duties") and 406 ("Prohibitid ~ra&.actions") of the Employee Retirement Income Security Act 

(ERISA). In the case of a participant who is orderedby a court or otherwise required to pay an 

amount to a pe&iod plan, section 206(d)(4) of ERISA pehits .the judgment, order, decree, or 

settlement to "expressly provide for the offset of all or part of the amount ordered or required to 

be paid to the plan against the participant's benefits provided under the plan." Tbe October 17, 

2000 Default hidpent against you exprekly provided for-an offset against your benefit. 

Your appeal challenges the correctness and validity of the Default Judgment. Previously, 

you raised the same assertions with DOL, who responded to you in a letter dated March 4, 2002 

("Exhibit En of your appeal filing). The Department of Labor, after reviewing your fde, stated 

that "we see no reason to disturb the Judgment." The DOL letter further concluded that (1) the 

fact that you resigned as officer and director of Witex in June 1996 does not absolve you of 

responsibilities of trustee to the Plan; (2) there is no evidence that you resigned as trustee to the 

Plan; (3) even assuming you were no longer a MStee beginning in June 1996, you were a 

fiduciary to the Plan in the earlier period when the improper transfer of Plan assets occurred; and 

(4) DOL had made every effort to advise you of the litigation pending against you and DOL 

records show that you were served with the pertinent court documents. 

Accordiig to the filesavailable to the Appeals Board, there have been no payments made 

tothe Plan as required by the October 17,2000 Judgment. PBGC implements tbe terms of final 

judgments, orders, decrees or settlements as they apply to tami~ted pension plans for which 

PBGC is trustee. Eurthermore; ERISA section 206(d)(4) permits an offset to your benefits in your 

situation. and the offset also is consistent with PBGC policy. Because the matters 9 you raise 

in yow appeal were resolved in the court order and because PBGC's decision to apply the offset 

is consistent with ERISA and PBGC policy, we are affirming PBGC's determination with respect 

to your benefits. 

We further conclude that the responsibility for obtaining for any relief from a court order 

is with you, rather than with DOL or PBGC. For example, you could have sought relief from the 

Default Judgment by fding a motion with the court. See Rule 60 of the Federal Rules of Civil 

-Procedure ("Relief from Judgment or Order"). However, there is no record that you have filed . such a motion, Thus, you will not receive a benefit from PBGC until the full amount owed to the 

Plan is paid. 

&mivor Be& 

The October 17,2000 order also provides that "any spouse of either [defendant] entitled 

to receive a survivor's benefit under the terms of the Plan shall retain the right to receive such 

benefit." The records PBGC's auditors obtained when the Plan terminated show that you had not 

retired before the Plan terminated. There is no evidence in the files to indicate that you had 
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applied to begin receiving your benefit or that your spouse had elected to waive her survivor 

benefit. Accordingly, the Board found that PBGC must comply with the terms of the court order 

ahd that, if you die before your eligible &use, she is entitled to a survivor benefit. We note that, 

in determining ihe survivor benefit amount, PBGC must comply kith the "miriimum-required 

qualifibd joint and survivor annuity" provisions under ERISA section 206(d)(5)(~). 

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Because we found no basis for changing PBGC's determination that you will not receive 

a benefit under the Wiretex Plan until the full amount owed the Plan is paid, we &st deny your 

appeal. This is the Agency's final decision on this matter and you may, if you wish, seek court 

review. 

The Board also found that your eligible spouse is entitled to a survivor benefit if you. 

should die before she does. PBGC's hurance Operations Department 'will send you a new 

determination concerning the survivor portion of your benefit (before the offset) with a new 45- 

day appeal right for matters not decided in this letter. 

If you have questions, please call PBGC's Customer Contact Center at 1-800-400-7242. 

Sierel y, 

Lii M. Mini 

Member, Appeals Board