"Vtl PBGC Pension Benefit Guaranty Corporation 

Protecting America's Pensions 1200 K Street, N. W., Washington, D.C. 20005-4026 

May 19,2009 

Re: Appeal "---I ___ I, Bethlehem Steel Corporation Pension Plan, Case # 196603 

Dear Mr.I"-----_~ 

We are responding to the appeal you filed on behalf o~ 1 concerning PBGC's 

October 2,2007 determination that he is not entitled to a Permanent Incapacity (disability) pension 

under the Bethlehem Plan. For the reasons discussed below, we changed PBGC's determination by 

finding that Mr.1 1 is entitled to Permanent Incapacity Retirement. PBGC's Benefits 

Administration and Payment Department, the organization responsible for calculating and paying 

benefits, will send him a new determination of his benefit amount and annuity start date, with a new 

45-day appeal right. 

PBGC's Determinations, Your Appeal and Related Correspondence 

PBGC's October 2, 2007 letter explained that, to be entitled to a Permanent Incapacity 

Retirement under the 1986 Steel Hourly Plan, a Participant must have at least 15 years of Continuous 

Service and be permanently incapacitated. The Plan defines "permanent incapacity" as being totally 

disabled by bodily injury or disease so as to be prevented from engaging in any employment of the 

type normally performed. PBGC said its records show that Mr.1 Ihad more than 15 years of 

service when he voluntarily terminated his employment with Bethlehem in May, 1989. PBGC 

further noted that the Administrative Law Judge from the Social Security Administration who 

,presided at his 1992 hearing wrote that Mr.1 Iwas "not under a disability as defined in the 

Social Security Act, as amended, at any time on or before the date of this decision." Based on this 

information, PBGC determined that Mr. I I was not permanently incapacitated before his 

employment with Bethlehem ended, and thus was not entitled to a Permanent Incapacity Retirement. 

PBGC also explained that he is entitled to a regular (non-disability) Bethlehem pension. 

Your November 29, 2007 appeal said that, as of May, 1989, Mr.1 Ihad a permanent and 

total disability due to 1 1 with recurrent ,---'1 --~-----'il. His medical 

condition was caused by a significant I I sustained in a serious I I accident in 
August, 1980 that left him I I for a period of time, required him to undergo al I, and 

led to a four-month stay in thel I. You submitted a number of medical 

reports and other documents when you filed your appeal and a letter supplementing your appeal on 

May 6, 2009. 

The documents you and Mr.1 Isubmitted show that he applied to the Social Security 

Administration ("SSA") for disability insurance benefits on August 22, 1990. SSA denied his 

application on January 14, 1991, and again upon reconsideration on February 2, 1992. Mr·1 I 

reapplied for disability benefits and, after another administrative review, SSA issued a decision on 

September 12, 1994 awarding him a disability benefit, effective February 27, 1992. As you noted 

in your appeal, after SSA finds an individual entitled to disability insurance benefits, SSA rules limit 

how far back SSA can go to begin paying the benefits. SSA disability awards normally set the 

disability date as the first date as of which SSA benefits are payable, even if the individual's 

disability occurred earlier. Accordingly, SSA's September 12, 1994 decision that Mr. 1 1 

became disabled on February 27, 1992 does not necessarily mean he was not disabled under SSA 

rules before that date. 

PBGC also received a copy ofSSA's response to Mr.1 I's inquiry regarding the first time 

he was eligible for Social Security disability benefits following his accident. SSA said that "claimant 

was getting benefits from 02/81 to 01184. Claimant is getting benefits since 08/92." 

Permanent Incapacity (Disability) 

The Bethlehem Plan terminated, effective December 18, 2002, without sufficient assets to 

provide all benefits PBGC guarantees under Title IV ofthe Employee Retirement Income Security 

Act (ERISA). The terms of the 1986 Steel Hourly Plan, the provisions of ERISA, and PBGC 

regulations and policies determine Mr. I I's entitlement to a guaranteed benefit. PBGC's 

regulations require that, to be entitled to a guaranteed benefit, a participant must satisfy the 

conditions of the plan necessary to establish the right to receive the benefit as of the plan's 

termination date. 

Under section 2.5 of the 1986 Steel Hourly Plan, there are two conditions that a participant 

must meet to be eligible for the Plan's Permanent Incapaiity retireDment: (1) the participant must have 

at least 15 years of continuous service (as does Mr. and (2) the participant must be 

"permanently incapacitated." Plan section 2.5 provides that a participant is considered permanently 

incapacitated only if --

(a) he has been totally disabled by bodily injury or disease so as to be 

prevented thereby from engaging in any employment of the type 

normally performed in his employee category; and 

(b) such total disability shall have continued for a period of five 

consecutive months and, in the opinion of a qualified physician, will 

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be permanent and continuous during the remainder ofthe Participant's 

life. 

This definition of permanent incapacity is not the same as SSA's disability definition nor is an SSA 

disability award a prerequisite for the Plan's disability pension. 

Background 

The files PBGC's auditors obtained from the former Plan Administrator show that (1) Mr. 

II was hired at Bethlehem's Sparrows Point plant on MayO, 1969, (2) his last day worked was 

Marcli[J, 1989, and (3) his employment there ended MayO 1989, with 19.92 years of continuous 

service. 

After receiving the letter PBGC sends to all participants in newly-trusteed plans, Mr·1 I 

filled out PBGC's Form 701 on June 19,2003, and asked to begin receiving a disability pension. He 

explained the circumstances surrounding his termination of employment and the reasons why he 

believes he is entitled to a disability pension in various letters to PBGC, Senator Martinez and 

Representatives Weldon and Feeney. 

To summarize, Mr.1 I said he received a I I D in a serious accident in August of 1980. He sufferedl I after the accident and the Plant 

Physician declared him "disabled to return to work." He applied for and was awarded Social 

Security disability benefits in 1981. Mr.1 Isaid he "didn't want to stay on S.S. disability" and 

had to file and win a grievance before Bethlehem would reinstate him. He was eventually cleared 

for light duty, gave u= his Social Security disability benefits and returned to the plant as al I 

I Ion I _ l1984, "hiding the fact [he] was occasionally having I I 

Before his accident, Mr.1 Iwas al lat Bethlehem's Sparrows Point plant. After 

he won the right to return to work, he was reassigned to light duty I I 

equipment. Mr. said he was able to do this job, which included I I 

, until the I Istarted 

I getting worse in the late 1980's. He specifically mentioned I 

"-----_~----=-:-;======"I-____,-a point he said the Company doctor had made to him previously. He also 

~poted these hisl lat work were well-documented and PBGC could obtain information about 

them directly from his employee files. 

Mr.1 I returned to the plant on MayO 1989 and voluntarily quit work. He said that 

local union officials were not around when he quit because they were in Pittsburgh negotiating a 

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contract.' Mr.1 I did not ask the Bethlehem employees who processed his termination about 

a disability pension because he thought only disabilities caused by on-the-job injuries would qualify. 

He said he only learned he was eligible during a conversation with a former co-worker in Maryland 

after the Plan terminated. Mr.1 Idid not work again after MayO, 1989. 

Discussion 

To be entitled to a disability benefit under the Bethlehem Plan, Mr. I I had to have 

satisfied the Plan's definition of permanent incapacity as of MayO 1989, the date his employment 

terminated. The medical reports you submitted with your appeal were written between February, 

1990 and November, 1993 by various doctors who treated Mr. . Taken together, these reports 

document that (1) Mr. resulting from a serious 

I I accident in August, 1980, with 

"-----____________________ ,-----"'----=iand (2) he was totally and 

permanently disabled as of the date of the report. Referring to Mr. 's past medical history, Dr. 

c=J noted onl I, 1990 that Mr·1 Ihad I lin 1989 that left him I I and 

I land that thel Iprompted him to quit work at Bethlehem Steel as al I 

worker. Dr. c::::::::Jfurther noted that the medication he was taking in 1989 was not the optimal drug 

in this case and that Mr.1 Iwas not to operate dangerous machinery, climb to excessive heights, 

or be involved in physical or mental activities that require sustained concentration. Other medical 

reports also referenced Mr.1 I's history ofl I 

The Social Security Act defines disability as the inability to engage in any (emphasis added) 

substantial gainful activity due to physical or mental impairment(s) which can be expected to either 

result in death or last for a continuous period of not less than 12 months. On August 22, 1990, Mr. 

I I applied for Social Security disability insurance benefits and was denied, both initially and 

upon reconsideration. On July 2, 1991, he submitted a timely request to the SSA for a hearing before 

an Administrative Law Judge. Mr.1 Isaid on his request form that he disagreed with the 

determination made on his claim because "I continue to be totally disabled from gainful employment 

and have been disabled since May, 1989." 

The Administrative Law Judge who presided at Mr.1 I's January[] 1992 hearing found 

that Mr.1 I was not under a disability as defined in the Social Security Act and denied his claim 

for Social Security disability benefits. However, before determining whether Mr.1 Icould 

engage in any substantial gainful activity under the Social Securit)r definition of disability, the 

Administrative Law Judge was required first to determine whether Mr.1 I retained "the residual 

As part of our research on Mr. c::::::::J's appeal, we contacted a fonner Plan official who con finned that local 

union officials from the different Bethlehem plants were in Pittsburgh for contract negotiations on MayO. 1989. He also 

told us that International Steel Group, which purchased the assets of Bethlehem Steel on May 6, 2003, had destroyed 

any remaining Bethlehem employee records at Sparrows Point. 

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functional capacity to engage in his past relevant work." The Judge's February 2, 1992 decision cited 

Mr.1 I's May, 1989 "alleged onset date of disability" and found that --

The claimant is precluded from engaging in his past relevant work as 

I I worker. 

The Appeals Board concluded that SSA's finding that Mr. I I's condition precluded him from 

engaging in his past relevant work as of May, 1989, meant that he was "prevented thereby from 

engaging in any employment of the type normally performed in his employee category." 

After reviewing all the evidence submitted and, in particular, the SSA's February 2, 1992 

decision quoted above, the Appeals Board found that Mr.1 I satisfied the Plan's definition of 

Permanent Incapacity because his I Iresulted in a disability that was 

both total and of such severity that it prevented him from engaging in any employment of the type 

normally performed in his employee category on or before MayO 1989. We further found that, as 

of August 30, 1989 at the latest, the disability had continued for more than five consecutive months. 

Decision 

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

the Appeals Board found that Mr.1 lis entitled to a Permanent Incapacity Retirement. We will 

forward a copy of this letter to PBGC's Benefits Administration and Payment Department, who will 

send him a new determination of his benefit amount and annuity start date, with a new 45-day appeal 

right for matters not decided herein. BAPD will also calculate any backpayments PBGC may owe 

him and pay that amount in a single lump sum with interest. 

Meanwhile, if you or Mr.1 I have questions about his benefit, please call PBGC's 

Customer Contact Center at 1-800-400-7242. 

Sincerely, 

Linda M. Mizzi 

Member, Appeals Board 

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