Pension Benefit Guaranty Corporation PrnE 1200 K Street, N.W., Washington, D.C. 20005-4026 

FEB 1 6 2005 

Re: 1 ~ethlehem Steel Corporation Pension Plan, Case # 196603 

The Appeals Board reviewed your appeal of PBGC's July 12,2004 determinationof your 

benefit under the BethlehemPlan. For the reasons discussed below, we are denying'your appeal. 

PBGC's letter said that you are entitled to $3,809.26per month in the form of a Straight 

Life Annuity with a Surviving Spouse Benefit, which is the same amount you are currently 

receiving and the same amount you were receiving from the prior Plan Administrator. Your 

August 7, 2004 appeal said that PBGC officials confirmed to the Retired Employees Benefits 

Coalition (REBO) that the maximum monthly guarantee "cap" for an individual in retirement 

status on December 18, 2002, the date PBGC took over Bethlehem's pension plan, is based on 

the individual's age on that date and not on his or her age at retirement. Your appeal included 

a copy of what appears to be a REBO document with a table showing the Monthly "PBGC Cap" 

for 2002 plan terminations for a sample of ages. You asked that we review your case because it 

seems PBGC did not properly consider the cap. 

You also noted in your appeal that you are a widower and are aware there are no benefits 

payable after your death, including the Five-Year Certain or Surviving Spouse Benefits. 

Maximtn Guaranteed Benefit 

When the Plan terminated, effective December 18,2002, it did not have suficient assets 

to provide all benefits PBGC guarantees under Title IV of the Employee Retirement Income 

Security Act (ERISA). The termsof the Plan, the provisions of ERISA, and PBGC regulations 

and policies determine your entitlement to a guaranteed benefit. Because of legal limits under 

ERISA and PBGC's regulations, the benefits that PBGC can guarantee may be less than the 

benefits a pension plan would otherwise pay. Under one of these limits, the maximum guaranteed 

benefit limit or MGB; PBGC's guarantee of aparticipanfsplan benefit cannot exceed a specific 

dollar amount payable in the form of a single life annuity beginning at age 65 (see ERISA 

section 4022(b)(3)). 
ERISA requires that PBGC compute, for each calendar year, an MGB that applies to all 

plans with termination dates in that year. For a plan like Bethlehem with a 2002 termination date, 

the MGB as a single life annuity beginning at age 65 is $3,579.55 per month. As you noted in 

your appeal, the MGB for a given year is lower for a participant under age 65 and higher for a 

participant over age 65. The relevant age for this purpose is the later of the participant's age on 

the date he or she retired and the date the Plan terminated. The MGB is also adjusted for a benefit 

payable in a form other than single life annuity. 

Discussion 

The files PBGC's auditors obtained from the prior Plan Administrator show that (1) you 

retired March 1, 1980 under the Plan's Normal Retirement provisions at age 65 with 45 years of 

credited service; (2) your benefit as a single life annuity, adjusted for the 1981 benefit increase, 

would have been $3,809.26 per month; (3) you elected instead to receive your benefit under the 

100% Co-Pensioner Option; and (4) your benefit in the form elected was $3,333.10 per month. 

The files also show that your benefit form automatically reverted to a single life annuity after your 

wife's death on January 28,1993, and your monthly pension increased from $3,333.10 per month 

to $3,809.26 per month. 

As explained above, the MGB is a statutory cap on the amount of a participant's Plan 

benefit that PBGC can guarantee. When the Bethlehem Plan terminated, you were receiving a 

Plan benefit of $3,809.26 per month as a single life annuity, which is more than the $3,579.55 per 

month age-65 MGB for 2002 plan terminations. The Appeals Board found that PBGC did 

recompute the MGB to reflect your age at Plan termination and, as a result, PBGC will pay your 

full Plan benefit. Please note that the MGB does not cause your Plan benefit to increase. 

Decision 

Because you have not presented any grounds that could change PBGC's July 12, 2004 

determination that you are entitled to $3,809.26 per month as a single life annuity under the 

Bethlehem Plan, we are denying this appeal. This is the Agency's fmal decision on this matter and 

you may, if you wish, seek court review. 

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

Sincerely, 

Linda M. Mizi 

Member, Appeals Board