"v" PBGC Pension Benefit Guaranty Corporation 

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

April 16, 2009 

Re: Consolidated Appeal, Case No. 195882, Republic Technologies International 

LLC - USWA Defined Benefit Plan (the "Plan" or "RTI Plan") 

Dear'---I ___ _ 

The Appeals Board of the Pension Benefit Guaranty Corporation has reviewed your 

appeal on behalf of 251 participants in the R TI Plan. Your appeal asserts that PBGC has not 

complied with the terms of the RTI Plan because PBGC is not paying a supplemental benefit 

(referred to in RTI Plan documents as the "LTV Supplement") to participants who retired from 

RTI employment under its Early Retirement Buyout Program (the "ERB"). As is discussed in 

more detail below, the Appeals Board found that PBGC is including the LTV Supplement, when 

it is applicable, in calculating the plan benefit amount for those appellants who retired under the 

ERB. Accordingly, the Appeals Board decided that your appeal does not provide a basis for 

changing PBGC's benefit determinations for any of the 251 appellants. 1 

Introduction 

PBGC is the United States government agency that insures pensions in accordance with 

Title IV of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 29 

United States Code ("U.S.c.") 1302-1461. If a plan sponsor is unable to support its defined 

benefit pension plan, PBGC becomes the trustee of the plan and pays guaranteed pension 

benefits according to the provisions of the plan. Because of legal limits under ERISA and 

PBGC's regulations, the benefits that PBGC guarantees may be less than the benefits a pension 

plan would otherwise pay. 29 U.S.c. § 1322; 29 Code of Federal Regulations ("C.F.R.") 

§ 4022.3. 

I You represent the 251 timely-filed appellants listed at Enclosure 1. Of the 251 appellants, 43 (who are listed on 

Enclosure 2) also submitted individual appeals directly to the Appeals Board. The Appeals Board later will issue 

supplemental decisions that will respond to the individual submissions from these appellants. Thus, for each of the 

43 appellants, the Appeals Board will keep the appeal open until the individual's supplemental decision is issued. 
PBGC determined, pursuant to ERISA § 4042(a)(2)(4), 29 U.S.c. § 1342(a)(2)(4), that 

the R TI Plan would be unable to pay benefits when due and thus the R TI Plan must be 

terminated. PBGC became trustee of the RTI Plan on September 30,2003. Additionally, based 

on a court decision, June 14, 2002 was established as the RTI Plan's Date of Plan Termination 

("DOPT,,).2 PBGC began sending initial (formal) Benefit Determination Letters to Plan 

participants in January 2008, with the majority of letters sent to appellants in May and June 

2008.3 

As is explained in more detail below, most RTI Plan participants who worked for LTV 

Steel Company ("LTV") before 1989 are entitled to benefits under a LTV-sponsored pension 

plan. Effective March 31, 2002, PBGC terminated and became statutory trustee of three LTV 

defined benefit pension plans. 

On October 29, 2008, you filed a 13-page appeal brief with 12 exhibits (the "Appeal 

Brief' or "AB") on behalf of245 participants in the RTI Plan. After you submitted your Appeal 

Brief, the Appeals Board received an additional 6 timely-filed appeals from individuals 

represented by you. The Appeals Board exercised its discretion under section 4003.56 of 

PBGC's regulations and consolidated the appeals you filed on behalf of these 251 appellants. 

The Appeals Board concluded that the respective appeals arise out of the same or similar facts 

and that they seek the same or similar relier4 

Your Appeal 

Your appeal raises a single issue. You state that "PBGC incorrectly applied the LTVDBP offset and corresponding supplement provisions for participants who elected to retire under 

the ERB Program and who are not immediately eligible for an unreduced LTV-DBP benefit." 

AB at 11. The "LTV-DBP offset" and the "LTV Supplement" provisions apply to certain RTI 

Plan participants who worked for LTV before LTV spun off its Bar Division into a separate 

company in 1989. 

2 Pension Benefit Guaranty Corp. v. Republic Techs. Int'l, LLC, 386 F.3d 659 (6th Cir. 2004), cert. denied, United 

Steelworkers of America v. Pension Benefit Guaranty Corp., 544 U.S. 905 (2005). 

3 Part 4003 of PBGC's regulations establishes the rules governing PBGC's issuance of initial Benefit 

Determinations and the procedures for requesting and obtaining administrative review. 29 C.F.R. § 4003 (titled 

"Rules for Administrative Review of Agency Decisions"). An initial (formal) Benefit Determination is the letter 

PBGC issues to communicate the Agency's determination of an individual's benefit. See 29 C.F.R. § 4003.21. If 

the individual desires Appeals Board review of his or her benefits, the individual or his or her representative must 

file an appeal of the Agency's determination, or a request for an extension of time, within 45 days from the date of 

issuance of the Benefit Determination. See 29 C.F.R. § 4003.4,4003.52. 

4 In footnote 2 of the Appeal Brief, you state that the United Steelworkers ("USW") represents: (1) "all participants 

of the RTI plan who timely filed appeals with the PBGC Appeals Board on their own behalf and/or through the 

USW, and (2) all similarly situated participants of the RTI plan who failed to timely file appeals with the PBGC 

Appeals Board, regardless of whether such participants were specifically identified by the USW in its 

correspondence with the PBGC Appeals Board." We have limited this decision to the 251 participants listed at 

Enclosure 1 who have timely-filed appeals. We did not identify any RTI Plan participant, however, where PBGC 

neglected to include the LTV Supplement, when it was applicable, in calculating the plan benefit amount. 

2 
Your appeal further clarifies that: 

Specifically, participants who retired under the ERB provisions are subject to the 

LTV-DBP offset and the corresponding LTV Supplement until age 62; PBGC 

properly applied the LTV-DBP offset to these participants, but failed to provide 

the participants with the corresponding LTV Supplement until age 62. AB at 11-

12. 

To illustrate you point, you provide details on four appellants: 1 I, 1 I, 

1 I, and I 1.5 You state that PBGC "correctly applied" the LTV 

Supplement provision for the first three participants, but failed to do so in the case ofl I, 

who you assert retired under the ERB. 6 

Background 

In this section, we discuss: (1) the history of Republic Technologies International, LLC, 

("RTI"), LTV, and their pension plans; (2) relevant provisions in RTI Plan documents, and (3) 

the legal limits on benefits paid by PBGC. 

1. History of the Companies and their Pension Plans 

Although RTI was established in September 1998, the events relevant to your appeal 

issue begin with the LTV's bankruptcy filing in September 1986. At that time, LTV's steel bar 

manufacturing operation was a division (the "Bar Division") of that Company. Shortly after the 

1986 bankruptcy filing, LTV terminated its defined benefit pension plans and established a 

replacement defined contribution plan (the "LTV-DCP"). 

Later, PBGC successfully sued LTV to have three of the terminated pension plans 

restored to LTV based on ERISA section 4047. As a result of this litigation, the three pension 

plans were restored as ongoing LTV pension plans effective January 1, 1993. The restored LTV 

plans provided benefit accruals for all periods of service with LTV, but benefits accruals were 

offset by benefits attributable to LTV's employer contributions to the LTV-DCP. 

Before the LTV plans were restored, LTV had spun off its Bar Division into a separate 

company named Republic Engineered Steel, Inc. ("RESI"). This spin off occurred through 

certain Employee Stock Ownership Plan ("ESOP") transactions. As a result of this transfer of 

5 1 1 has filed an individual appeal directly to the Appeals Board, to which we will respond in a 

supplemental decision. 1 I, I l and I Idid not file individual appeals. 

6 In the first full paragraph on page 12 of the Appeal Brief, you request that PBGC recalculate "the RTI benefits 

payable to all participants who are subject to the LTV offset provisions of the RTI Plan." Because this language 

possibly could encompass more than the appeal issue described above, William Condron and Matt Feeks ofPBGC's 

Appeals Division contacted you to discuss the scope of your appeal. In a telephone conversation with you on 

December 1, 2008, you clarified to them that PBGC's treatment of the LTV Supplement for ERB participants was 

the focus of your appeal. 

3 
the Bar Division to the RESI ESOP, the fonner Bar Division employees stopped earning benefit 

accrual service under the LTV defined benefit plans as of November 28, 1989. Employment 

with RESI after November 28, 1989, however, counted for purposes of establishing eligibility for 

certain types of benefits under the LTV defined benefit plans ("LTV-DBP,,).7 

In 1991, RESI established a defined contribution plan (the "RESI-DCP") that was 

effective November 28, 1989.8 Also, effective January 1, 1993, RESI established a defined 

benefit plan (the "RESI-DBP"). The RESI-DBP provided benefit accruals for all periods of 

service with both LTV and RESI, but benefits were offset by benefits payable from: (1) the 

LTV-DBP, (2) the LTV-DCP, and (3) the RESI-DCP. 

On September 8, 1998, the Bar Technologies Company ("Bar Tech") acquired all shares 

of the REST ESOP. The combined Bar Tech company was renamed Republic Technologies 

International, LLC ("RTl"). Also, as is noted in the restatement of pension plan provisions 

effective September 8, 1998, the RESI-DBP was renamed the Republic Technologies 

International LLC-USWA Defined Benefit Plan (the "RTI Plan"). 

The USW was the bargaining agent of the workers employed by RTI and its 

predecessors. Through the years, RTT (and its predecessors) and the USW negotiated successive 

collective bargaining agreements, which provided for the tenns and conditions of employment of 

the Company's employees. Among the many agreements was the 1998 Pension Agreement 

Tenn Sheet ("1998 Tenn Sheet"), which provided for certain significant modifications to the 

RESI Plan's provisions. The provisions of the 1998 Tenn Sheet were incorporated into the 

Settlement Agreement and into the restated R TI Plan document. 9 

On December 29, 2000, LTV again filed for Chapter 11 bankruptcy. PBGC tenninated 

the three LTV defined benefit pension plans with a plan tennination date of March 31, 2002. 

PBGC on that date also became statutory trustee of the LTV plans. 

RTI was unable to achieve profitability and filed for bankruptcy in 2001. As discussed 

above, PBGC tenninated the RTI Plan with a DOPT of June 14,2002. 

7 Generally, RTI hourly employees who worked for LTV prior to 1989 were covered under the Pension Plan of 

Republic Steel Corporation. Section 1.27 of the 2002 RTI Plan document, however, also refers to other LTVsponsored defined benefit pension plans, such as the Jones & Laughlin Hourly Pension Plan. In this decision, our 

reference to the "LTV-DBP" is to all of the LTV defined benefit plans to which Section 1.27 of the 2002 RTI Plan 

document applies. 

8 RTI and USW, through a document titled "1998 Settlement Agreement Between United Steelworkers of America, 

AFL-CIO and BarTech and RES Acquisition Corporation" ("Settlement Agreement"), which was executed on 

August 2, 1998, agreed that RTI would discontinue contributions under the RESI-DCP effective September 8, 1998, 

and would provide enhanced benefits under the RESI defined benefit plan. 

9 In this decision, all our references to RTI Plan provisions will be to the "Republic Technologies International, 

LLC - USW A Defined Benefit Plan, Amended and Restated Effective as of September 8, 1998" (the "2002 

Restatement"), unless otherwise stated. The 2002 Restatement, which was executed by RTI on February 26, 2002, 

incorporated by reference the 1998 Term Sheet and the Settlement Agreement. 

4 
2. RTI Plan Provisions 

In this section we first discuss the various retirement types under the R TI Plan and the 

terms of the Early Retirement Buyout program. We then discuss the RTI Plan's regular pension 

formula, the LTV Supplement, and its other temporary supplemental benefits. 

The RTf Plan's Retirement Types 

Article 4 of the 2002 Restatement provides for 9 different types of pensions: Normal 

Retirement; 62/15 Retirement; 60/15 Retirement; 30-Year Retirement; Permanent Incapacity 

Retirement; 70/80 Retirement; Rule-of-65 Retirement; Deferred Vested Pension; and 60/1 0 

Retirement (only available to prior participants in the Bliss & Loughlin Pension Plan). 

The Normal Retirement benefit is payable to a participant who retires after having 

attained age 65 (the Normal Retirement age) with at least 5 years of Continuous Service. 

Eligibility for the other eight retirement types also is based on the participant's age and/or years 

of Continuous Service. Additionally, in order to qualify for 70/80 Retirement or Rule-of-65 

Retirement, the participant must (among other requirements) incur a Break in Continuous 

Service as a result of a layoff or a permanent shutdown, or must have elected to be placed on 

layoff status and subsequently have his employment terminated. Finally, Permanent Incapacity 

Retirement is available only to participants who meet the disability conditions stated in the RTI 

Plan documents. 

If a participant meets the requirements for one of the following six retirement types, he or 

she may retire with an immediate, umeduced RTI Plan pension: Normal Retirement; 62115 

Retirement; 30-Year Retirement; Permanent Incapacity; 70/80 Retirement; and Rule-of-65 

Retirement. For 60/15 Retirement, however, the participant will receive an actuarially-reduced 

monthly pension if payments begin before age 62. 10 Also, for Deferred Vested Pension, the 

participant will receive an actuarially-reduced pension if payments begin before age 65. 11 

The Earlv Retirement Buyout Provisions 

Select RTI employees were offered participation in the ERB based on criterion set forth 

in the Settlement Agreement. To qualify for participation in the ERB, a participant had to 

"satisfy the age and service requirements of at least a Rule-of-65, 70/80, 65/5, 62/15, or 30-Year 

10 Appendix B of the 2002 Restatement is a "Table of Percentages" that shows the reductions for commencement of 

the of the 60/15 Pension before age 62. 

lIThe Deferred Vested Pension is payable to a participant who incurs a Break in Continuous Service after five or 

more years of Continuous Service and who (at the time of the break) does not meet the eligibility requirements for 

another type of pension. 2002 Restatement, Section 4.08. Appendix C of the 2002 Restatement is a "Table of 

Percentages" that shows the reductions for commencement of the Deferred Vested Pension before age 65. 

Section 4.09 of the 2002 Restatement provides that, for 60/10 Retirement, the reduction factors used in the Bliss 

& Laughlin Pension Plan (as in effect on November 30, 1998) are applied. 

5 
Retirement pension."l2 Furthermore, the participant must also "[h]ave the greatest continuous 

service among a group: of employees eligible to apply for ERB's under the priority rules set forth 

... in Subsection D." 3 

Under the ERB, a participant was offered a choice between (1) a $15,000 lump-sum 

payment upon retirement, or (2) if the participant was less than 61 years of age, a $700 monthly 

supplement payable until the participant became eligible for a Public Pension.l4 It was generally 

financially advantageous for younger ERB participants to elect the $700 monthly supplement. 

We note that ERB participants taking either the $700 supplement or the $15,000 lump sum 

option were ineligible for the "Increased Pension" supplements under 2002 Restatement Sections 

5.04 (Permanent Incapacity and 70/80 Retirement), 5.05 (Rule-of-65 Retirement), or 5.06 (30-

Year Retirement).l5 

The RTf Plan's "Regular Pension" 

As is stated in the first sentence of Section 5. 03(b) of the 2002 Restatement (your 

Exhibit 4), the "Regular Pension" under the RTI Plan (prior to any offsets) is a straightforward 

calculation of $35.00 times years of Benefit Service. l6 Section 5.03 then states in its next 

sentence: 

"From the amount determined in the previous sentence deduct as applicable: 

(1) the Participant's LTV-Defined Benefit Plan Benefit;l7 and/or 

(2) the Participant's LTV-DCP Benefit,18 if not transferred to the RES I-Pension 

Plan and subsequently transferred to this Plan; and/or 

(3) the Participant's RESI-DCP Benefitl9 in this Plan or, in the case of a Pension 

payable under Sections 4.01 through 4.05 and 5.08, only the portion of the 

12 Settlement Agreement, Section H.C. 

13 Jd. 

14 Settlement Agreement, Section II.B(2)( a)-(b); 2002 Restatement, Section 5 .08(a)( 1 )-(2). 

15 2002 Restatement, Section 5.08(b). 

16 Section 1.09 of the 2002 Restatement defines "Benefit Service" as "Continuous Service as an Employee 

recognized for purposes of computing the amount of any benefit." 

17 Section 1.26 of the 2002 Restatement defines the "LTV - Defined Benefit Plan Benefit" as "the monthly amount 

payable at the Participant's age 65 in the form of a single life annuity from ... any ... defined benefit pension plan 

sponsored by LTV Steel Company on account of the Participant's Continuous Service with the LTV Steel Company 

or any predecessor employer thereto." 

18 Section 1.27 of the 2002 Restatement defines the "LTV - DCP Benefit" as "for a Participant who elected 

distribution of his account balance as of his Transfer Date, the Participant's account balance as of the end of the 

month in which his Transfer Date occurs based on the LTV Steel Company contributions (excluding any 

contributions under Section 401(k) of the Code) to the LTV Steel: USWA Pension Plan .... " The remainder of 

Section 1.27 describes how the account balance is adjusted for future earnings after the Transfer Date. 

6 
Participant's RESI-DCP Benefit in this Plan taken by the Participant as a lump 

sum distribution as provided in Appendix A." 

Thus, the RTI Regular Pension that a participant generally is entitled to receive is the net amount 

after deductions for benefits under the LTV-DBP, the RESI-DCP, and possibly the LTV-DCP. 

The "LTV Supplement" 

In addition to other supplemental benefits, the RTI Plan provides a special temporary 

benefit, called the "LTV Supplement," for a participant who satisfies all three of the following 

conditions: (1) retires under the 70/80, Permanent Incapacity, Rule-of-6S Retirement, or ERB 

provisions; (2) has his/her RTI benefit reduced by the LTV-DBP offset; and (3) at retirement is 

not immediately eligible for an unreduced LTV-DBP benefit. The 2002 Restatement provides 

that a participant who satisfies these requirements is entitled to receive: 

an additional monthly supplement ("LTV Supplement") equal to the amount of 

the LTV - Defined Benefit Plan Benefit payable to the month he first attains the 

age to become eligible for an unreduced LTV - Defined Benefit Plan Benefit 

(whether or not he elects to begin receiving it at that time) or to the month he 

elects commencement of his LTV - Defined Benefit Plan Benefit, if earlier.2o 

Other Supplements Under the RTf Plan 

Under the terms of the RTI Plan, four types of supplements are available for employees 

in addition to the LTV Supplement. First, a participant who retires under Permanent Incapacity 

Retirement or 70/80 Retirement is entitled to a $400 per month supplement to his or her Regular 

Pension payable until age 62 or beginning the month the participant is eligible for disability 

benefits under the Social Security Act. 21 Second, a participant who retires under the Rule-of-6S 

Retirement is eligible for a $400 monthly supplement payable until the participant reaches age 

62?2 Third, a participant who retires under the 30-Year Retirement is eligible for a $200 

monthly supplement, subject to certain restrictions. 23 Finally, as discussed above, certain 

participants eligible for the ERB were able to elect a supplemental payment as part of the ERB. 

19 Section 1.47 of the 2002 Restatement defines the "RESI-DCP Benefit" as "the benefit the Participant is entitled 

to under the individual account provisions in Appendix A [of the 2002 Restatement]; such benefit is attributable to 

the contributions made by the Employer to the RESI - Pension Plan prior to September 9, 1998 on behalf of the 

Participant .... " The remainder of Section 1.47 describes how the individual account balances are adjusted for 

earnings after September 9,1998. 

20 The 2002 Restatement uses the (identical) above-quoted language in Sections 5.04(c) (Permanent Incapacity and 

70/80 Retirement), 5.05(g) (Rule-of-65 Retirement), and 5.08(c) (Early Retirement Buyout Program). 

21 See 2002 Restatement, Section 5.04(b). 

22 There are additional criteria for the $400 supplement under the Rule-of-65 Retirement concerning earned income 

restrictions. See 2002 Restatement, Section 5.05(a) - (e). 

23 Section 5.06 of the 2002 Restatement states: "In the detennination of the amount of any Regular Pension for a 

30-Year Retirement, the monthly amount determined in accordance with paragraph 5 .03(b) or (c) shall be increased 

7 
3. PBGC's Statutory Limits 

As discussed above, the RTI Plan terminated without sufficient assets to provide all 

benefits that PBGC guarantees under Title IV of ERISA. Three legal limits to PBGC's 

guarantee, namely the "Accrued-at-Normal" limit, the "Phase-in Rule," and the "Maximum 

Guaranteed Benefit" limit, apply to the RTI Plan. 

For the RTI Plan, PBGC's actuarial valuation identified 11 participants impacted by the 

Maximum Guaranteed Benefit limit (the "MGB"). Two of these participants are your clients: 

I I and I I Furthermore, according to the findings in 

PBGC's actuarial valuation, 56 of your clients have their RTI Plan benefit reduced due to 

application of the Accrued-at-Normal Limit, and 133 appellants have their RTI benefit reduced 

by the Phase-in Rule.24 Our decision will focus on the Accrued-at-Norma1 Limit, as it is the 

legal limit most relevant to the issue you have raised, and you did not appeal PBGC's application 

ofthe Phase-in Rule or the MGB. 

Under the Accrued-at-Normal limit, PBGC cannot guarantee any portion of a 

participant's supplement unless the supplemental portion, when added to his or her regular 

monthly benefit, is less than or equal to the benefit the participant would otherwise receive under 

the plan at normal retirement age in the form of a Straight Life Annuity.25 An explanation of the 

Accrued-at-Normal rule, as explained on pages 15-16 of PBGC's Pension Insurance Data Book 

2006, is as follows: 

[S]uppose that the plan entitles a participant to a straight life annuity of 

$1,000 per month at the plan's normal retirement age of65. Suppose further that, 

if he retires at age 60, he is entitled to an early retirement benefit of $750 per 

month and a temporary supplemental benefit of $400 per month between the ages 

of 60 and 62. His total benefit under the plan from age 60 to 62 would be $1,150 

per month. The accrued-at-normallimitation will reduce the supplemental benefit 

by $150. In this case, PBGC would pay the participant a benefit of $1,000 per 

month from age 60 to age 62, instead of $1,150. At age 62, PBGC would stop 

paying the reduced supplemental benefit in accordance with the plan's terms. 

From that point forward, the participant would be paid a monthly benefit of $750, 

by $200 per month beginning at the later of retirement or attainment of age 57; provided, however, that such 

increase shall not be applicable with respect to such a Regular Pension payable for the month for which the 

Participant first becomes eligible for a Public Pension; and provided, further, that such $200 supplement shall be 

payable without regard to the excess earned income test set forth in paragraph 5.05(a)." 

24 PBGC's Actuarial Case Memorandum ("Case Memo") dated December 6,2007, at pages 6-8, states the number 

ofRTI Plan participants affected by the MGB and the Phase-in Rule. You included the Case Memo as Exhibit 5 of 

the Appeal Brief. 

25 See 29 C.F.R. § 4022.21(a)(1), which provides in part: "Subject to paragraphs (b), (c) and (d) of this section, the 

PBGC will not guarantee that part of an installment payment that exceeds the dollar amount payable as a straight life 

annuity commencing at normal retirement age, or thereafter, to which a participant would have been entitled under 

the provisions of the plan in effect on the termination date, on the basis of his credited service to such date ... " 

8 
the same amount he would have received from the plan at that age if the plan had 

not terminated. 

In some pension plans, such as the RTI Plan, the participant's accrued benefit is based on 

his combined service with two employers with an offset for the benefit payable under the second 

employer's pension plan. Also, sometimes the benefit payable under the second employer's 

pension plan has a different start date. PBGC has developed an actuarial procedure for applying 

the Accrued-at-Normallimit in such situations, which is explained by the following example: 26 

Suppose Pension Plan A provides a participant with a straight life annuity 

("SLA") of$l,OOO per month at the plan's normal retirement age (65) reduced for 

the monthly benefit payable by Pension Plan B. Also assume the participant 

retires at age 55 with an unreduced Pension Plan A benefit, but his Plan B benefit 

of $400 per month (also payable as a SLA) cannot start before age 65, which is 

his Plan B normal retirement age. Finally, suppose that Plan A provides a $300 

temporary supplement that ends at age 65. 

Thus, Pension Plan A would pay: (1) $1,300 per month before age 65 ' 

(because he is not yet receiving a Plan B benefit and is entitled to a $300 

temporary supplement), and (2) $600 per month starting at age 65 (because the 

supplement has ended and Plan A deducts $400 for the Plan B benefit). 

In this example, PBGC uses the combined benefits at normal retirement 

under Plan A and Plan B (i.e., $1,000 per month for this participant) in applying 

the Accrued-at-Normal limit to Plan A. Thus, PBGC pays the participant a Plan 

A benefit of$l,OOO per month from age 55 until age 65, instead of$1,300. By 

paying $1,000 before age 65, PBGC ensures that the monthly sum of his Plan A 

benefit ($1,000) and his Plan B benefit ($0) equals his monthly normal retirement 

benefits as a SLA ($1,000) from the two plans. Starting at age 65, PBGC pays 

$600 per month, the same amount he would have received from Plan A at that age 

ifthe plan had not terminated. 

We note that the above example assumes that the Accrued-at-Normal limit is the only 

ERISA limit affecting the participant's benefit. If other limits apply, then PBGC will make other 

required adjustments to the participant's benefits. 

Discussion 

As is stated above, the issue you raise in your appeal is: Did PBGC fail to include the 

LTV Supplement in calculating plan benefit amounts for participants who retired under the ERB 

provisions? The appeal further explains your claim as follows: 

The PBGC correctly applied the [LTV-DBP] offset and corresponding 

supplement provisions with regards to participants entitled to Permanent 

26 The Appeals Board drafted this example based on how PBGC has applied the Accrued-at-Normal to the RTI Plan 

and other similar pension plans. 

9 
Incapacity, 70/80, or Rule of 65 pensions who are not immediately eligible for an 

unreduced LTV-DBP benefit, but PBGC failed to provide the same benefit to 

participants who elected to retire under the ERB Program and who are not 

immediately eligible for an unreduced LTV-DBP benefit. AB at 10. 

PBGC's Case Memo, however, does not draw the distinction you make between 

participants who retired under the ERB and those who retired under the Permanent Incapacity, 

70/80, or Rule-of-65 provisions. Rather, the Case Memo states: 

Retirees receiving a 70/80, rule-of-65, disability or ERE pension who are not 

eligible for an unreduced benefit from the LTV DB Plan receive from this plan 

the unreduced LTV DB Plan accrued monthly benefit, payable monthly from 

retirement until age 62, when this amount becomes payable unreduced from the 

LTV DB Plan. For purposes of applying the accrued-at-normal limit, PBGC 

treats the benefit before applying the LTV offset as the benefit payable at normal 

retirement age, so the temporary LTV DB Plan benefit paid from this plan is 

generally not affected by the limit. [Emphasis added]. 

Case Memo at page 6. Thus, the Case Memo shows that PBGC has interpreted Plan provisions, 

as well as PBGC's Accrued-at-Normallimit, in the same way for ERB program retirees as it has 

for Permanent Incapacity, 70/80, or Rule of 65 retirees. 

In response to your appeal, the Appeals Board further examined PBGC records to 

determine whether PBGC in practice is including the LTV Supplement in calculating Plan 

benefit amounts for appellants who retired under the ERB or under other retirement types where 

the LTV Supplement could be payable. The Board's findings are presented below. 

1. PBGC records show that 42 appellants are ERE retirees and 4 appellants are Permanent 

Incapacity retirees 

As is stated on page 5 of the Case Memo, 802 participants elected to retire under the RTI 

Plan's ERB provisions. The Appeals Board examined a PBGC electronic listing of these 802 

ERB retirees and found that 42 appellants are either ERB retirees or are the beneficiaries ofERB 

retirees.27 Enclosure 3 provides a listing of the 42 individuals. The Appeals Board further 

examined individual pension records for this group of 42 individuals and found that the records 

PBGC obtained from RTI generally contained documentation of the individual's ERB status. 28 

There are several reasons why many appellants, as well as many non-appellants, are not 

ERB retirees. First, only select RTI employees, based on criterion set forth in the Settlement 

Agreement, were offered participation in the ERB. Second, to qualify for participation in the 

27 Appellants I~=====;-;--:-;-~~b and I I are the surviving spouses of participants who retired 

under the ERE. 1 1 is the Alternate Payees of another appellant (I ~ who retired under 

the ERE. 

28 ERE status typically was indicated on the participant's retirement application, the benefit calculation records 

prepared by the RTI Plan's administrators, and/or similar types of records. 

10 
ERB, a participant had to "satisfy the age and service requirements of at least a Rule-of-65, 

70/80,65/5,62/15, or 30-Year Retirement pension.,,29 Finally, the RTI employee was required 

to accept the ERB offer and actually retire. 3o 

Individuals who retired under the RTI Plan's Permanent Incapacity, 70/80, and Rule-of65 provisions, like some ERB retirees, potentially could receive the LTV Supplement. See 

discussion above under "RTI Plan Provisions." In addition to the 42 ERB appellants, we 

identified four additional appellants who retired under the Permanent Incapacity provisions. Our 

search of PBGC records, however, did not identify any appellant who, before DOPT, was 

eligible for a 70/80 or Rule-of-65 Retirement benefit.3l 

Appeals Board staff also examined the individual pension records for the remaining 205 

appellants who are not listed in PBGC's actuarial valuation as ERB retirees or Permanent 

Incapacity retirees.32 We did not locate any additional appellant (not already identified in 

PBGC's actuarial valuation) who retired under the ERB or who is the beneficiary of an ERB 

retiree. 33 

29 Settlement Agreement, Section H.C. 

30 Section D.4. of the Settlement Agreement provides: "To meet operational needs, the Company may retain an 

employee who accepts an ERB for up to six (6) months, or a period of time not to exceed twelve (12) months as 

mutually agreed to by the employee and the Company." 

31 As stated previously, a participant must (among other requirements) incur a Break in Continuous Service as a 

result of a layoff or a permanent shutdown, or must have elected to be placed on layoff status and subsequently have 

his employment terminated, in order to qualify for a 70/80 Retirement or a Rule-of-65 Retirement. As required by 

ERISA sections 4022(a) and 400l(a)(8) (defmition of "nonforfeitable benefit"), PBGC cannot guarantee a 70/80 or 

Rule-of-65 Retirement benefit unless (among other things) the participant satisfied either the layoff or permanent 

shutdown condition for that benefit before DOPT. 

32 Based on PBGC electronic records, the 205 appellants generally fall into three categories. The first category, 

which consists of approximately 98 appellants, are participants who retired before DOPT under the RTI Plan's 30-

Year or 62115 Retirement provisions, or who at DOPT were eligible to retire under those provisions. These 

individuals, who generally have qualified for unreduced LTV DBP benefits as of their RTI Plan retirement dates, are 

not eligible to receive the LTV Supplement. The second category (of approximately 104 appellants) consists of 

individuals that PBGC found to be deferred vested participants. Under the terms ofRTI Plan, the LTV Supplement 

is not payable to Deferred Vested participants. The third category (of 3 appellants) consists of partially-vested or 

non-vested participants who, like the Deferred Vested participants, are not eligible for the LTV Supplement. 

33 The Appeals Board identified one appellant (I ~ who, although not identified in PBGC's 

valuation as an ERB retiree, had been offered and had accepted ERB retirement in February 1999. Records for D 

I I further show: (1) he did not actually retire from RTI until April 30, 2002; and (2) in 2002, the RTI 

Plan's administrators had placed him into pay status as a 30-Year retiree, rather than as an ERB retiree. Thus, 

PBGC's conclusion that I I was not an ERB retiree is consistent with how the RTI Plan's 

administrators had processed his application based on his actual retirement date. 

11 
2. 23 o(the 42 ERB appellants are receiving unreduced benefits {rom the LTV-DBP 

As discussed above, retirement under the ERB program was available to certain RTI 

employees who satisfied the age and service requirements for a Rule-of-65, 70/80, 65/5, 62/15, 

or 30-Year Retirement benefit. 34 

In the case of an ERB retiree who met the age and service requirements for 30-Year, 

65/5, or 62/15 Retirement, the individual also is eligible to receive an unreduced pension from 

the LTV-DBP as of the same Actual Retirement Date (ARD) that he or she retires from the RTI 

Plan. The ARDs are the same in both plans for these three benefit types because: (1) the LTVDBP, like the RTI Plan, offers unreduced 30-Year, 65/5, or 62/15 retirement benefits; and (2) as 

is the case with the RTI Plan, under the LTV-DBP service with LTV and with RESIIRTI is 

combined for purposes of determining eligibility for those three benefit types. 

The Appeals Board examined PBGC records for the 42 ERB program retirees. The 

Board found that 22 of them had met the service requirement for a 30-Year Retirement benefit 

and one had qualified for a 62/15 retirement benefit. (None of the 42 ERB appellants is a 65/5 

retiree.) The Board also examined PBGC payment records for the LTV-DBP. The Board found 

that each of the 23 appellants who qualified for a 30-Year or 62/15 benefit has been receiving an 

unreduced LTV-DBP benefit that had started on or before the RTI Plan's DOPT. 

As discussed above, the LTV Supplement is payable only if the participant has his or her 

RTI benefit reduced by the LTV-DBP offset and is not immediately eligible for an unreduced 

LTV-DBP benefit. See 2002 Restatement, Sections 5.04(c), 5.05(g), and 5.08(c). Thus, because 

each of the 23 appellants discussed above had been receiving an unreduced LTV-DBP benefit as 

of the RTI Plan's DOPT, the individual is not entitled to receive the LTV Supplement from 

PBGC. 

3. PBGC has included the LTV Supplement in determining the Plan benefit amount [or the 

remaining J 9 ERE program appellants and {or the 4 Permanent Incapacity appellants 

The LTV -DBP does not provide a 70/80 benefit or a Rule-of-65 benefit for a former LTV 

Bar Division employee who was employed by RESI and/or RTI after November 28, 1989. Thus, 

an ERB retiree who (at retirement) did not meet the age and service requirements for a 30-Year, 

65/5, or 62/15 Retirement benefit generally cannot receive an unreduced LTV -DBP benefit until 

age 62 - even though the R TI Plan pays the individual an immediate unreduced benefit upon 

ERB retirement. The RTI Plan's LTV Supplement accordingly was created to provide an ERB 

retiree (as well as a 70/80, Rule-of-65, or Permanent Incapacity retiree) with additional monthly 

payments from the RTI Plan until the unreduced LTV DBP benefit became payable. 

34 PBGC records show a "retirement type" for each participant who retired under the ERE. The listed retirement 

type corresponds to the age and service requirements that the participant satisfied when he terminated employment. 

For example, if the participant retiring under the ERE had sufficient age and service for 70/80 Retirement, the 

records would list the individual as a 70/80 retiree. Also, in some cases, a participant may qualify for more than one 

type of benefit. In PBGC's benefit statements, the "Retirement Type" for those ERE retirees who satisfied the age 

and service requirements for both a 70/80 benefit and a 30-Year Retirement benefit generally is listed as "70/80." 

12 
The Appeals Board found that for the group of 42 ERB appellants: (1) 14 appellants had 

met, as of their ERB retirement dates, the age and service requirements for 70/80 Retirement but 

had not met the service requirement for 30-Year Retirement; (2) an additional 5 ERB appellants 

had met the age and service requirements for Rule-of-65 Retirement but had not met the 

requirements for 70/80 or for 30-Year Retirement; and (3) as discussed above, the remaining 23 

appellants are receiving unreduced benefits from the LTV DBP. 

The Appeals Board further examined PBGC records and found that, for each of the 19 

individuals not receiving an unreduced LTV DBP benefit, PBGC had included the LTV 

Supplement in determining the individual's plan benefit amount. Two of these individuals, 

1 1 and 1 I, are specifically named in your appeal. See Appeal Brief at 

page 10, where you cited 1 1 and lias examples of where PBGC "correctly 

administered the LTV-DBP offset and corresponding supplement provisions." The Appeals 

Board also found that PBGC had included the LTV Supplement in its calculations for all 4 of the 

Permanent Incapacity appellants. 

Accordingly, the Appeals Board concluded that, for the 42 ERB appellants and 4 

Permanent Incapacity appellants, PBGC in practice is either (1) including the LTV Supplement 

in determining each individual's plan benefit amount, or (2) not paying the LTV Supplement 

because the individual had qualified for an unreduced LTV DBP benefit. We note, however, that 

PBGC is unable to pay the full LTV Supplement amount for the 19 ERB appellants and 4 

Permanent Incapacity appellants who qualified for it because of the Phase-in Rule. See 

discussion above under "PBGC Statutory Limits." 

4. PBGC is paving appellant Carlos L. Ball an unreduced LTV-DBP benefit 

As stated above, the Appeal Brief specifically discusses the benefits of four RTI Plan 

appellants: 1 I; 1 I; 1 I; andl I. The Appeal 

Brief asserts that PBGC properly applied the LTV Supplement for 1 I, 1 land [J 

1 I, but improperly omitted it in determining 1 1 benefits. The Appeals Brief, at page 

12, further contends that 1 1 is an ERB retiree who, under Plan terms, is entitled to a 

LTV Supplement until age 62. 

The Appeal Board, however, found no evidence that 1 1 had been offered 

retirement under the ERB. Rather, the records PBGC obtained from RTI show that: (1) ,---I __ ~ 

retired effective February 1,2000 under the RTI Plan's 30-Year Retirement provision; and (2) he 

elected to take his benefit in the form of a Straight Life Annuity with a five-year certain period. 

See his retirement election form at Enclosure 4. 

Because his combined RTI and LTV service exceeded 30 years, I I became 

eligible, as of his May 1, 2000 Actual Retirement Date, to receive an unreduced benefit from the 

LTV-DBP.35 See PBGC's determination letter for the LTV-DBP (included in Enclosure 4), 

35 Records PBGC obtained from LTV show that I I termination of employment date for purposes of his 

LTV-DBP benefit was January 31, 2000. After the end of his 3-month Special Payment period,1 I became 

entitled to a $362.29 monthly benefit starting May 1,2000. 

13 
which shows 1 1 is entitled to an unreduced LTV-DBP benefit of $362.29 as of his 

February 1, 2000 Actual Retirement Date. PBGC payment records (see Enclosure 4) further 

show that 1 1 has been receiving monthly LTV -DBP payments of $362.29 from PBGC. 

Accordingly, because 1 1 was receiving an unreduced LTV-DBP benefit on the RTI 

Plan's DOPT and afterwards, he is not entitled to receive the LTV Supplement from PBGc.36 A 

more detailed explanation ofPBGC's determinations ofl 1 benefits under the RTI Plan 

and the LTV-DBP is provided in Enclosure 4. 37 

5. Appellants with their own unique issues and claims. 

As we stated in footnote 1, the 43 appellants listed in Enclosure 2 have submitted 

individual appeals directly to the Appeals Board. We will answer their individual issues in 

supplemental decisions to you, with a copy furnished directly to them. 

In this decision, the Appeals Board has limited its factual findings and legal conclusions 

to the issue raised in your appeal. While we decided that PBGC is including the LTV 

Supplement (when it is applicable) in calculating the plan benefit amount for those appellants 

who retired under the ERB, we did not review the correctness of PBGC's calculations. In at 

least five of the individual appeals, however, the RTI Plan participant has challenged the amount 

of the LTV-DBP offset that PBGC had calculated. The Appeals Board therefore will address the 

calculation of the LTV -DBP offset when it decides those individual appeals. 

Decision 

Having applied the RTI Plan provisions, the provisions of ERISA, and PBGC regulations 

to the facts in this case, the Appeals Board found that PBGC is including the LTV Supplement, 

when it is applicable, in calculating the plan benefit amount for those appellants who retired 

under the ERB. Accordingly, the Appeals Board decided that your appeal does not provide a 

basis for changing PBGC's benefit determinations for any of the 251 appellants. As discussed 

36 Additionally, RTI Plan provisions do not provide 30-Year retirees like 1 1 with an LTV supplement. 

Section 5.06 of the 2002 Restatement discusses the only supplemental payment available for the 30-Year Retirement 

benefit, stating: 

In the determination of the amount of any Regular Pension for a 30-Year Retirement, the monthly 

amount determined in accordance with paragraph 5.03(b) or (c) shall be increased by $200 per 

month beginning at the later of retirement or attainment of age 57; provided however, that such 

increase shall not be applicable with respect to such a Regular Pension payable for the month for 

which the Participant first becomes eligible for a Public Pension; and provided, further, that such 

$200 supplement shall be payable without regard to the excess earned income test set forth in 

paragraph 5.05(a). 

Because of the Accrued-at-Normallimit, ,---I __ I is not entitled to receive the $200 supplemental monthly benefit 

after the RTI Plan's DOPT. 

37 Additionally, Enclosure 4 contain excerpts from PBGC records on 1 I, which include his benefit 

determination letters, benefit statements, and various RTI retirement election forms. 

14 
above, however, the Appeals Board will Issue supplemental decisions for 43 of the 251 

appellants. 

This decision is PBGC's final Agency action with respect to 208 appellants who will not 

receive supplemental decisions. These appellants, if they wish, may seek review of this decision 

in an appropriate federal district court. For the appellants listed on Enclosure 2 who will receive 

supplemental decisions, this decision is not yet PBGC's final agency action. If any appellant 

needs other information regarding his or her PBGC benefits, he or she may contact PBGC's 

Authorized Plan Representative at 1-800-400-7242. 

Sincerely, 

Charles 

~~ Vernon 

Appeals Board Chair 

Enclosures (4): 

1. List of 251 Appellants with Timely Filed Appeals ( 6 pages) 

2. List of 43 Appellants who Filed Individual Appeals (2 pages) 

3. List of 46 Appellants who Participated in the ERB or are Permanent Incapacity Retirees 

(2 pages) 

4. Benefit Explanation (5 pages), with Excerpts from PBGC's Records (29 pages) forC] 

I I 

15