DEC 18 2003 

Re: Appeal I DeVlieg Sundstrand UWA Pension Plan (the DeVlieg Plan); 

Case #: 159814 

The Appeals Board has reviewed your appeal of PBGC's January 3, 2003 revised 

determination of your DeVlieg Plan benefit. As explained below, the Board changed PBGC's 

determination by finding that you are not vested in a benefit under the White Consolidated 

Industries, Inc. Plan (the WCI Plan). As a result of this change, there is no WCI Plan offset to 

your DeVlieg Plan benefit. 

PBGC's letter said that, based on the Appeals Board's January 2, 2002 decision, you are 

entitled to a disability benefit, instead of a deferred vested benefit, under the DeVlieg Plan. The 

letter also noted that, although PBGC previously told you that you were not vested under the WCI 

Plan, PBGC has now determined you are vested based on your WCI service. PBGC then offset 

your DeVlieg disability benefit by your WCI beneffi, beginning at age 62 when your WCI benefit 

first became payable. 

As a result of these revisions. PBGC's letter said that you are entitled to monthly benefits 

of (1) $508.70 per month from January 1, 1991 through May 1, 1991, (2) $309.20 from June 1, 

1991 through December 1, 1991, (3) $204.94 from January 1, 1992 through February 1,2001, 

and (4) $21 1.29 from March 1,2001 through May 1, 2001, all in the form of a 60% Joint and 

Survivor Annuity. Beginning June 1, 2001 (age 62) and thereafter, PBGC determined you are 

entitled to $1 16.68 per month as a Straight Life Annuity. 

Lastly, PBGC explained that these revisions reduced your net overpayment amount from 

$29,761.01 to $7,036.08. PBGC also determined that you are entitled to a special payment for 

your disability supplement payable before the Plan terminated. After deducting these 

underpayments, PBGC found you still had a net overpayment (then equal to $1,22834). which 

PBGC would recoup by reducing your $116.68 monthly benefit by $11.67 (lo%), until repaid. 
IP 

9" Your February 11, 2003 appeal said that you do not believe you are vested in a WCI 

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U benefit. You contacted Nicholas Czar, the current Plan Administrator for the WCI Plan, who told 

'f you that they have no records showing you with a vested benefit in the WCI Plan. You also 

@ questioned why, if WCI is in fact responsible for 10 years of service, PBGC is only responsible f for 2.6 years when your total time is 13.3 years. 

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On April 28, 1988, DeVlieg, Inc. purchased the assets of the White Consolidated 

Industries (WCI) Machine Tools and Systems Division in Belvidere, Illinois. DeVlieg adopted 

the DeVlieg Plan on December 30,1988, and made it effective as of April 28, 1988. Before this 

sale, plant employees were covered by the White-Sunstrand UAW Pension Plan (WCI Plan) for 

service between October 7, 1977 and April 28, 1988, and by the Pension Plan of the Sunstrand 

Corporation and Local 592, UAW (Sunstrand Plan) for service before October 7, 1977. The 

DeVlieg Plan terminated, effective December 31, 1991, and PBGC subsequently became trustee. 

The DeVlieg Plan counts service from a participant's date of hire (with Sunstrand. WCI 

or DeVlieg, whichever applies) to the earlier of the date employment with DeVlieg ended or the 

date the DeVlieg Plan terminated. The DeVlieg Plan benefit is then offset by the benefits payable 

under the WCI andlor Sunstrand Plans for service before April 28, 1988. 

When PBGC recalculated your disability benefit, they determined (1) you had 10.0 years 

of service under the WCI Plan, instead of the 9.7 years they previously determined; (2) you are, 

therefore, vested in a WCI benefit; and (3) the WCI Plan is responsible for paying your WCI Plan 

benefit. We contacted Mr. Czar, who verified that your name does not appear on any WCI Plan 

list of deferred vested participants, nor is there any record of your participalion. On your behalf, 

Mr. Czar contacted a union official, who found your name on a list of union members showing 

you with 9.7 years of service (the same service PBGC used initially). We also reviewed DeVlieg 

and WCI Plap documents. Based on this information, we concluded that you are not vested in a 

WCI benefit. 

You also asked about the total years of service (before any offset) PBGC used to compute 

your benefit. As shown on line 6 of the benefit statement PBGC included with its January 3,2003 

lener, PBGC calculated your DeVlieg benefit using 13.3 years of service, the same total you cited 

in your appeal. 

The Board agreed with PBGC's determination that you have been overpaid in some months 

and underpaid in others. However, PBGC's lemr incorrectly described PBGC policy on netting 

overpayments and underpayments. Instead, you will receive a lump-sum payment for 
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underpayments made before the Plan termination date (December 31, 1991). PBGC will 

N recompute your net overpayment amount under Subpart E of PBGC's regulation on Benejits 

! PayabIe in Terminated Single-Employer P& by generally netting underpayments made after the 

i! Plan termination da6 aiainst oveirpayments made after July 1, 1993 (the date PBGC issued its 

! Notice of Determination to terminate the Plan). When, the result is a net overpayment, PBGC w will recover the net overpayment by reducing future annuitj benefits by no more than 10%. 

Decision 

Based on the information described above, the Appeals Board found that you are not vested 

under the WCI Plan and, as a result, there is no WCI offset to your DeVIieg Plan benefit. Please 

note that this decision does not affect the pre-age 62 benefit amounts PBGC determined because 

any WCI offset would not have started until age 62. This is the Agency's final decision on the 

issues you raised and you may, if you wish, seek court review. 

We will forward a copy of this letter to PBGC's Insurance Operations Depamnent, the 

organization responsible for calculating benefits, who will correct their records to eliminate the 

WCI offset against your DeVlieg benefit. They will also pay pre-termination underpayments in 

a single lump sum and recalculate your net overpayment amount. 

~eanwhile, if you have questions, please call PBGC's Customer Contact Center at 1-800- 

400-7242. 

Sincerely, 

Linda M. Mizzi 

Member, Appeals Board