$ " 0 Pension Benefit Guaranty Corporation 

1200 K Street, N.W., Washington. D.C. 20005-4026 

MAY 2 9 20Uj 

Re: Appeal / Lloyd's Shopping Centers, Inc. Pension Plan (Case #: 167262) 

The Appeals Board. has reviewed your appeal of PBGC's September 21, 2001 

determination of your benefit under the Lloyd's Plan. As explained below, the Board changed 

PBGC's determination by finding you are entitled to a lumpsum payment of $1,966, plus interest. 

PBGC's letter said that you are entitled to a lumpsum benefit of $799.00, plus interest 

from the first day of the month following the Plan's termination date (March 5, 1999) until the 

date PBGC pays you. PBGC noted that, instead of a lump sum now, you may choose to receive 

annuity payments starting at age 65 of $34.27 per month, if paid as a lifetime annuity with no 

survivor benefit. 

According to your November 3, 2001 appeal, you computed your Average Monthly 

Compensation to be $1,970.10 instead of the $1,757.32 PBGC used, and your Years-ofxreditedService to be 6.60 years instead of 2.60 years. You submitted with your appeal a copy of Lloyd's 

Report of Your Benefits as ofc January 1, 1993 that shows (1) an estimated monthly accrued 

benefit of $60.00 as of January 1, 1993, and (2) a "service date for pension purposes" of 

February.22, 1988. You also asked how your benefit could have decreased and how the Plan's 

"0.75% " multiplier was determined. 

The benefit statement PBGC included with its determination shows that you began working 

for Lloyd's on February 22,1988 at age 16 years and 3 months, and that your employment there 

ended on August 4, 1994. You did not dispute this information in your appeal. 

Plan section 1.22 defines Employee as any person employed by the Company. Under 

section 2.01, an Employee becomes a Participant after reaching age 21 and completing one Yearof-Service. A Participant earns one Year-of-Vesting-Service for each calendar year after age 18 

in which the Participant works at least 1,000 hours. A Participant with 3 Years-of-Vesting- 
t 

c Service is 20% vested. The vesting percentage increases by 20% each year, reaching 100% after 

f 7 years (section 2.1). Section 1.63 deks Years-of-Credited-Service for benefit accrual purposes 

as a Plan Year in which a Participant completes 2,080 Hours-of-Service. Finally. section 1.64 1 defines Year-of-Service (which forms the basis for the defd terms Year-of-Vesting-Service and 

m Year-ofCredited-Service) as a computation period in which an Employee has been credited with 

at least 1,000 Hours-of-Service. 

Taken together, these Plan provisions can be read two different ways. Under the first, the 

tirsf possible Year-of-Vesting-Service and Year-of-Credired-Service is the fmt Year-of-Service 

after an Employee becomes a Participant (that is, the fust year after the Employee meets both the 

age (18 for vesting and 21 for accruals) and 1,000 hour requirements). Under the second, once 

an Employee becomes a Participant, the fust possible Year-of-Service is the year the Employee 

fmt worked at least 1,000 hours (in other words, after satisfying the age and service requirements 

for participation, service for vesting and accrual purposes would go back to date of hire). PBGC 

based its September 21,2001 determination of your benefit on the first reading. 'C 

PBGC files, however, show that the former Plan Administrator consistently applied the 

second reading when calculating Participants' Years-of-Vesting-Service and Years-of CreditedService. Based on this information, the Appeals Board decided to apply the second reading. The 

Board found, therefore, that (1) you are 100% vested because you worked at least 1,000 hours 

in each of the seven calendar years 1988 through 1994, and (2) you have 6.4 Years-of-CreditedService from your date of hire until your August 4, 1994 employment termination date. 

Section 1.09 defines Average Monthly Compensation (AMC) as the average of a 

participant's last 10 years of eamings as shown on the participant's W-2 forms. For a participant 

with fewer than 10 years of employment, AMC is based on the actual period worked rounded to 

the nearest month (in your case, 77 months). PBGC used the same earnings for 1992 through 

1994 that you cited in your appeal. Because PBGC did not have your W-2 earnings for 1988 

through 1991, PBGC used its standard assumptions for estimating earnings. The table below 

shows how PBGC computed your AMC: 

lyepr Il!hmiw l year l ~amings I 

1991 1 $20,381.83 1 Total 1 $135,313.53 

AMC = $135,313.53 +77 months = $1,757.32 
Plan section 3.01 provides that a Participant who attains his Normal Retirement Age 

(age 65) "will be entitled to receive a monthly Nonnal Retirement Pension equal to Y of 1% of 

Average Monthly Compensation times his Years-of-Credited-Service." Using your AMC of 

$1,757.32 and 6.4 years of credited service, we found that you are entitled to a benefit of $84.35 

per month if paid as a lifetime annuity at age 65, as follows: 

(Y times I%) times $1,757.32 times 6.4 = 0.75% times $11,246.85 = $84.35 

This benefit has a lumpsum value, as of the Plan termination date, of $1,966. 

Having applied the law, the provisions of the Plan and PBGC policy to the facts in this 

case, we changed PBGC's determination by finding that you are entitled to a lifetime annuity of 

$84.35 beginning at age 65. Instead of the annuity. you may elect to receive a lump-sum payment 

of $1,966, with interest from the Plan termination date until the date PBGC pays you. This is the 

agency's fml decision on this matter and you may, if you wish, seek court review. 

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

organization responsible for determining and paying benefits. They will contact you directly 

concerning your election of an annuity or a lump sum. Meanwhile, if you have questions, please 

call PBGC's Customer Service Center at 1-800-400-7242. 

Sincerely, 

b5%: 

Linda M. Mizzi 

Member, Appeals Board