"VA P BGC Pension Benefit Guaranty Corporation 

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

August 31, 2009 

Re: ~I ~ ________ ~ __________ ~ ______ ~I Case No. 195882, 

Republic Technologies International LLC - USWA Defined Benefit 

Plan (the "RTI Plan") 

Dearl ~--------------~ 

As we stated in our April 16, 2009 decision that applied to 

251 participants in the RTI Plan, the Appeals Board will issue 

supplemental decisions for 43 appellants who submitted 

correspondence directly to the Appeals Board. 1 I lis one 

of these 43 appellants. ~----------~ 

We have carefully reviewed all the issues relevant 

appeal I fubmi t ted to the Board. For the 

explained below, we have made the following decisions 

appeal: 

to the 

reasons 

on his 

• The RTI Plan's reduction for the benefit payable to c=J I lunder the LTV Plan ("LTV-DB offset") is decreased from 

$295.80 (the amount determined by PBGC) to $287.65. This 

$8.15 change is favorable to I I 

• PBGC cannot pay any portion of I I $700.00 ERB 

supplement because none of the supplement is either guaranteed 

by PBGC or funded by Plan assetsi 

l' In the appeal that you filed on October 29, 2008 on behalf of the 251 

participants ("Consolidated Appeal"), you claimed PBGC had not paid a 

supplemental benefit (referred to in RTI-Plan documents as the "LTV Supplement") 

to some participants who retired from RTI employment under its Early Retirement 

Buyout ("ERE") program. The Appeals Board's April 16, 2009 decision 

("Consolidated Decision") denied the Consolidated Appeal on this issue. A 

redacted copy of Consolidated Decision is included as Enclosure 1. 

Fori I the Appeals Board found in the Consolidated Decision that 

PBGC had included the LTV Supplement in determining his RTI-Plan benefit amount. 

The RTI Plan requires omitting his LTV Supplement starting in January 2006, the 

earliest date when he could have received an unreduced benefit under the LTV 

Steel Hourly Pension Plan (the "LTV plan") . 
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• PBGC guarantees only 60% of certain benefit increases that 

were adopted on August 2, 1998 under the RT1 Plan; 

• PBGC officials (in "BAPD, " the Benefits Administration and 

Payment Department) will review how PBGC determined another 

benefit offset, the "RES1-DCP offset," for I I and 

• PBGC officials will recalculate his PBGC benefit, which will 

reflect: (1) the $8.1S change to his LTV-DB offset decided by 

the Boardi (2) any changes PBGC determines are appropriate 

concerning the RESI-DCP offset; and (3) the required benefit 

reductions based on PBGC's guarantee limits. 

BAPD will issue I I a new benefi t determination, with a new 

4S-day right to appeal all issues not already decided in this 

letter. 

PBGC's Benefit Deter.mination and ~I ____________ ~I Appeal 

On Mav 21, 2008, PBGC's benefit-determination letter informed 

Ithat his guaranteed RTI-Plan benefit provides: ~----------~ 

• $4S0.29 per month through December 200S, and 

• $240.54 per month during his lifetime thereafter; and 

• 70.9090% of the Plan's Surviving Spouse's Benefit (the 

"SSB") . 

PBGC also determined I Iwas overpaid $61,068.95 2 through 

I I 2008. To "recoup" his overpayments, PBGC will reduce his 

current guaranteed benefit amount and his SSB by 10%. 3 

On June 27, 2008, I Ifiled his appeal. His appeal 

letter (Enclosure 2) states ln ltS entirety: 

"I am appealing your calculation on my pension benefits 

and request that it be put back to the original amount. 

My appeal is being handled by lawyers for the United 

States Steel Workers of America." 

We reviewed PBGC's determination based on available data and plan 

provisions, as explained below. We found some data discrepancies 

and an error on his LTV-DB offset. Because several of your clients 

,ppecifically raised the LTV-DB offset issue, we found it lS 

efficient to decide the LTV-DB offset issue in I 

appeal. ~--------------~ 

2 ($1,303.72 - $450.29) x 42 monthsll/02 -D/05 

+ $1,303.72 - $240.54 x 1 month~ 

+($1,019.95 - $240.54) x 31 months c==]06 -c===J08 

His overpayment total has been increasing while his appeal has been pending. 

3 PBGC will not seek any further repayment from either I I and ~I ______ ---" 

or from their estates. See 29 CPR sections 4022.81 and 4022.82(a) (2) (i). 
-3-

Background 

I Iwas born j 11943. He worked at LTV 

Steel Company, Inc. ("LTV"), before transferring to Republic 

Engineered Steel, Inc. ("RESI"), which was subsequently acquired by 

Republic Technologies International, LLC, ("RTI"). The history of 

the companies and related pension plans is provided on pages 3-4 of 

the Consolidated Decision (Enclosure 1) . 

In this Background section, we discuss: (I) 1 1 RTIPlan benefits at retirement; (2) the benefits the RTI plan 

calculated; (3) benefits the RTI Plan paid before the RTI plan's 

termination; (4) the RTI-Plan benefits PBGC has paid; (5) PBGC's 

determination of 1 ILTV Plan benefit; and (6) PBGC's 

determination of 1 1 RTI-Plan benefit. 

1. I RTI-Plan Benefits at Retirement 

"-----______ 1 retired I I 1999 under RTI' s Early 

Retirement Buyout Program (the "ERB") , with his benefit determined 

under the RTI Plan's 70/80 Retirement benefit formula. Under the 

ERB, 1 Iwas entitled to the following two supplements: (1) 

a $700.00 per month temporary supplement (the "ERB Supplement"), 

which was payable until he reached age 63 (i.e., through December 

I, 2006); and (2) the LTV Supplement, which was payable through 

December I, 2005. 4 The RTI Plan also provides I I a 

Surviving Spouse's Benefit. 

When 1 tetired, the RTI Plan's retirement benefit 

formula, before offsets, was $35.00 per month times years of 

combined service at LTV and RESI/RTI. Since 1 1 at 

retirement had 22.75 years of combined service, his RTI-plan 

benefit, before offsets and not including supplements, is $796.25 

[$35.00 rate x 22.75 years combined service]. 

Additionally, section 5.3 of the RTI Plan provides for the 

following two benefi t offsets, both of which apply to I 

benefits: (1) the LTV-DB offset; and (2) the RESI-DCP~o~f~f~s-e~t-.-~S~e-e~ 

pages 6-7 of the Consolidated Decision. Details concerning the 

calculation of these two offsets is provided later in this decision 

and in the Appendix, which is titled "Additional Information 

Concerning the LTV DCP and RESI DCP." 

Section 5.3 of the RTI Plan also provides for a possible third 

offset, for certain distributions from the "LTV DCP." The LTV DCP 

Under the RTI Plan's prov~s~ons, the LTV Supplement ended when I 

became entitled to an unreduced LTV Plan benefit, which in his case~o-c-c-u-r-r~e~d-o~n~~ 

1 1

2006 . 
-4-

is a defined contriilltion ulan that was sponsored by LTV. 5 For 

participants such as _ kho initially worked in LTV's Bar 

Division, account balances in the LTV DCP were distributed to 

participants when the Bar Division facility was sold in 1989. 

Employees could choose whether to receive a cash payment or 

rollover their account balances into the new RESI DCP. 

I Fhose to rollover his LTV DCP distribution, 

according to RTI records. His LTV DCP account balance thus became 

part of his RESI DCP account balance. In the case of such a 

rollover from the LTV DCP to the RESI DCP, RTI Plan Section 5.3 

does not require an LTV DCP offset. 6 See the further discussion of 

the LTV DCP and RESI DCP in the Appendix. 

2. Benefits that RTI Administrators Calculated 

RTI administrators calculated I IRTI-Plan benefit 

near the time when he retired. The payment periods and benefit 

amounts that the RTI administrators calculated are shown in 

Enclosure 3. They calculated his RTI-Plan benefit starting with a 

$796.25 total benefit, before offsets and not including 

supplements. This is the same amount that PBGC determined, and the 

appeal does not dispute the $796.25 total. 

RTI administrators calculated I I RESI-DCP offset as 

$256.16. Essentially, the RESI-DCP offset is the annuity equivalent 

of a distribution that a participant receives from his RESI-DCP 

account balance. 7 RTI administrators used a $33,263.02 RESI-DCPdistribution amount for j I the sum of the account balance 

accumulated from the LTV DCP ($7,916.99) and the accumulated 

account balance based on RESI DCP contributions ($25,346.03). RTI 

administrators divided the $33,263.02 account balance by a 129.852 

The official name of the LTV defined contribution plan is the "LTV Steel -

USWA Pension Plan." The RTI-Plan document refers to this plan as the "LTV DCP," 

and we use that term in our decision and the Appendix. 

6 If he had not rolled over his LTV DCP account balance, then Section 5.3 would 

require an offset as if he: (i) had rolled his LTV DCP account balance into the 

~ESI DCP, and (ii) had received a RESI DCP distribution at retirement equal to 

the accumulated value of the amount in (i). 

7 As a result of the 1998 amendments to the RTI Plan and the RESI DCP, RESI DCP 

account balances were transferred to the RTI Plan. Consequently, the RESI-DCP 

offset started applying only to the portion of an individual account balance that 

a participant actually withdrew. The 1998 amendments also limited the individual 

account fund amounts that a participant could withdraw from the RTI plan. See 

further discussion in the Appendix. The effect of this limitation upon 

withdrawals is that some or all of an individual account balance was effectively 

converted to an RTI-Plan defined benefit, using the RTI Plan's definition of 

actuarial equivalence. 
-5-

actuarial "annuity equivalence" factor to calculate the $256.16 

RESI-DCP offset. 

RTI administrators estimated I I LTV-Plan benefit as 

$283.38 if paid as a Straight Life Annuity starting at age 62. 

However, RTI's written procedures required using the "actual" LTV 

Plan benefit if available. (See pages 9-10 and footnote 20 below.) 

Also, LTV administrators wrote that his LTV Plan benefit would be 

$220.14. Thus, RTI's worksheets recorded the $220.14 amount as the 

"Actual Net LTV-DBP benefit if available."s Based on the abovestated amounts, RTI administrators calculated the following monthly 

RTI-Plan benefits: 

(1) $1,240.09 {$796.25 "$35-per-year total" - $256.16 RESI-DCP 

offset + $700.00 ERB supplement} through December 2005,9 

(2) $1,019.95 {$1,240.09 - $220.14 LTV-DB offset} January 2006 

through December 2006, and 

(3) $319.95 {$l,019.95 $700.00 ERB Supplement} for the 

remainder of 1'---______ 1 lifetime beginning 1~ ____ ~~007 

(age 63) . 

,-----___ R_T---=;I officials also determined the RTI Plan provides = 

'-----___ ---ll a Surviving Spous e ' s Bene fit. 

3. Benefits the RTI Plan Provided Before Plan Termination 

The RTI Plan provided ~ 1$1,303.33 per month starting 

with his retirement and contlnuing through the RTI Plan's 

termination. As stated above, the monthly RTI amount payable to 

I fas not scheduled to change until January I, 2006 (age 

62), which was after the RTI Plan terminated. 

The Appeals Board found that payment of the $1,303.33 amount, 

which was more than the $1,240.09 amount RTI officials had 

calculated, was the result of an error. Under the RTI Plan's 

provisions, the amount of the LTV Supplement should equal the 

amount of the LTV-DB offset until the LTV Plan benefit became 

8 Former LTV administrators provided PBGC a revised LTV plan benefit amount after 

"the LTV Plan terminated in 2002. See section 5 of this Background summary I 

starting on page 6 below. 

For ERB retirees such asl Ithe exact amount of an LTV-DB offset 

for the period before entitlement to an unreduced LTV plan benefit did not result 

in an incorrect RTI-Plan benefit for that time period. This is because the LTVDB offset amount used by RTI administrators was matched by an LTV Supplement of 

the same amount. 

9 More specifically, the RTI administrator's calculation of the benefit payable 

before January 2006 included both a reduction of $220.14 for the LTV-DB offset 

and an increase of $220.14 for the LTV Supplement. Since these two amounts 

cancel each other out, they are not shown in the above calculation. 
-6-

payable. 10 The $1,303.33 amount the RTI Plan paid, however, was 

based on an LTV Supplement of $283.38, which differed from the 

$220.14 LTV-DB offset that the RTI administrators used. 11 

4. The RTI-Plan benefits PBGC has Paid 

PBGC continued to pay I t1 , 303.33 per month through 

January I, 2006. PBGC reaacea IllS estimated-guaranteed benefit 

payments to $1,019.95, on February I, 2006, a month after the date 

RTI administrators had determined for starting the $1,019.95 

amount. 12 The $1,019.95 estimated-guaranteed benefit amount still 

included the $700.00 ERB supplement, which PBGC cannot guarantee, 

as well as early retirement subsidies under the ERB, which PBGC 

cannot fully guarantee. See the Appendix to this letter for an 

explanation of I Iguaranteed benefit. 

While PBGC f s cutbacks to estimated-guaranteed levels generally 

eliminated non-guaranteed supplements f b ~stimatedguaranteed benefit still included the $7 0.00 supplement. PBGC has 

continued to pay $1,019.95, including the non-guaranteed and the 

now-expired $700.00 ERB Supplement, as his estimated PBGC benefit 

while PBGC determined his benefit and while his appeal has been 

pending. 

5 . PBGC I S Determination of I ILTV Plan Benefit 

PBGC is the trustee of the terminated LTV Plan, as discussed 

on pages 4-5 of the Consolidated Decision. Former LTV 

administrators provided PBGC with a new accrued-benefit calculation 

fo~ lunder the LTV Plan, $287.65 13 instead of $220.14. 

10 Both amounts are the LTV-Defined Benefit Plan Benefit, defined in Enclosure 

4, section 1. 26, page 7. See section 5. 03 (b) (1) (page 39) which requires 

reducing by the LTV-Defined Benefit Plan Benefit and section 5.08(c) (page 48) 

which requires using the same amount as the LTV Supplement. 

11 The Appeals Board found that the RTI Plan's practice (for participants other 

than I I was to use the same amount for both the LTV Supplement and for 

the LTV-DB offset. These practices on other participants provide further 

evidence, beyond reading plan provisions, that the $1,303.33 payments were 

erroneous. 

12 RTI Plan administrators calculated the final LTV supplement would be paid on 

December 1, 2005. They also calculated the final $700.00 ERB supplement would 

be paid December 1, 2006. See Enclosure 3 page 1. 

13 1.155% x 13.667 years 3/29/1976-11/28/1989 

x $129,659.37 5-year total earnings 7 58 months 

- $65.23 LTV DCP Annuity Equivalent. 

$65.23 = $4,010.12 DCP balance on 11/28/89 x 1.0775 9 . 083 years to 1/1/99 

7 121.11 actuarial factor under the LTV Plan 

The 58-month "denominator" was calculated starting with 5 years and making 

complicated adjustments for months with $0 earnings. See Enclosure 5. 
-7-

The $287.65 amount is if paid as a Straight Life Annuity starting 

~ ________ ~I 2006 (age 62). 14 On May 20, 2005, PBGC determined the 

same $287.65 LTV-Plan accrued benefit, in a separate PBGC 

determination dated May 20, 2005. 15 I I did not appeal 

PBGC's determination of his $287.65 LTV-Plan accrued benefit. 

6. PBGC's Determination of j IRTI-Plan benefit 

PBGC's determination of I RTI-Plan benefit 

included a LTV-DB offset amount of $295.80. 16 This offset amount 

differed from the $287.65 benefit amount that PBGC had determined 

under the LTV Plan (and from the $220.14 and $283.38 amounts RTI 

officials had obtained - see discussion above). For the purpose of 

actually paying a benefit under the LTV Plan, however, PBGC is 

continuing to use the (smaller) $287.65 accrued benefit it 

determined in 2005. 

One reason PBGC calculated a new and different LTV-Plan 

benefit ($295.80 instead of $287.65) is that under its formal RTIPlan determination, PBGC changed the plan administrators' (LTV's 

and RTI's) methods for offsetting defined benefits with definedcontribution plan (DCP) benefits. Both the RESI Plan and LTV Plan 

contained DCP offsets. 

For purposes of determining the LTV-DCP offset to the LTV Plan 

benefit, LTV administrators used certain actuarial "annuity 

equivalence" assumptions. These assumptions differed from the 

assumptions used by the RTI Plan in valuing the RESI-DCP offset, 

and they also differed from the annuity equivalence assumptions 

PBGC considers appropriate for valuing benefits under terminated 

pension plans. 

For determining RTI-Plan benefits, PBGC decided to recalculate 

the LTV-DB benefit by changing the LTV Plan's annuity equivalence 

assumptions for valuing the LTV-DCP offset. PBGC also used new 

data on LTV benefits from RTI's databases, as is discussed in the 

~ See Enclosure 5. 

lsi I chose to receive an actuarially equivalent $241.11 {$287. 65 x 

.8382 early} pension from the LTV Plan starting j ~004. His decision 

to start his LTV Plan benefit early with an actuarlaI reduction does not affect 

the calculation of his RTI-plan benefit. 

16 1.155% x 13.667 years 3/29/1976-11/28/1989 

x $129,659.37 5-year total earnings + 60 months 

- $45.32 LTV DCP Annuity Equivalent. 

$45.32 = $3.549.67 DCP balance on 11/28/89 X 1.07759,083 years to 1/l/99 

+ 154.2941 PBGC-revised actuarial factor under the LTV Plan 
-8-

Appendix to this decision ,17 PBGC I s changes had the impact of 

reducing I IRTI-Plan benefit with an LTV-DB offset that 

is larger than the benefit PBGC had determined the LTV Plan could 

actually provide him. 

PBGC similarly changed the RESI-DCP offset for 1,---_______ _ 

from the $256.16 calculated by the RTI administrators to $161.23. 

These two amounts are different because: (1) as was the case with 

the LTV-DCP offset discussed above, PBGC changed the annuity 

equivalence assumptions for valuing the RESI-DCP offset from what 

RTI administrators had used; and (2) PBGC also changed the account 

balance used for the RESI-DCP offset from the $33,263.02 amount RTI 

administrators used to $24,876.61. A more detailed discussion is 

in the Appendix. 

using the above-discussed offset amounts, PBGC determined the 

following RTI Plan-provided benefits, before applying guarantee 

limits required by law: 

(1) $1,335.02 {$796.25 "$35-per year of service ll - $161.23 

RESI-DCP offset + $700.00 ERB supplement} through December 

2005 (age 62), 

(2) $1,039.22 {$1,335.02 - $295.80 LTV-DB offset} January 2006 

through December 2006 1 and 

(3) $339.22 {Sl.039.22 $700.00 ERB Supplement} for the 

remainder of I f lifetime beginning 1'---____ --"1 2007 

(age 63) . "----------

The RTI Plan-provided benefits PBGC determined are more favorable 

than the amounts RTI administrators calculated. Compare (1)-(3) 

immediately above with the corresponding amounts on page 5. 

Discussion 

In this Discussion section, we will address in the following 

order; ( 1) I ir'eques t to have hi s RTI - Plan benef i t 

reinstated to ltS orlglnaI amount; (2) the amount of the LTV-DB 

offset to his RTI-Plan benefit; (3) the amount of his RESI-DCP 

offset; (4) the reason his $700.00 ERB Supplement is not guaranteed 

by PBGCi and (5) the reduction to his guaranteed benefits based on 

the "Phase-in Rule." 

17 PBGC used slightly different benefit formulas and account balances. Under 

its LTV-plan determination, PBGC used a $4,010.12 LTV-DCP account balance forc::::::::J 

Iwhen his LTV employment ended in 1989. PBGC used a different $3,549.67 

~L=TV=-~D=C=P~1989-account balance under its RTI-Plan determination. We explain in the 

Appendix that under our decision, the conflicting 1989-account-balance data has 

a negligible effect on his combined PBGC benefits under the LTV and RTI Plans. 
-9-

1. Irequest to have his RTI-Plan benefit reinstated 

to its original amount 

As we stated in the Consolidated Decision, PBGC pays 

guaranteed pension benefits based on the provisions of the pension 

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 provide. is 

Two guarantee limits - the "Accrued-at-Normal limit" and the 

"Phase-in Rule" - apply to I J guaranteed benefits. As 

is explained later in this declslon, PBGC must apply these two 

limits tol Ibenefits. 

PBGC also pays nonguaranteed pension benefits if the pension 

plan, when it terminated, had sufficient assets to pay them. When 

the RTI Plan terminated, however, it had: (1) assets of only $46.2 

million; (2) $88.0 million in unfunded guaranteed benefits; and (3) 

an additional $77.2 million in unfunded benefits that PBGC does not 

guarantee. Thus 1 overall 1 the RTI Plan was funded only 22%, and 

total under funding was more than $165 million. Because of the 

insufficiency of the RTI Plan's assets 1 PBGC may pay only ,---I __ _ 

I I guaranteed benefit. We therefore deny his request for 

PBGC to reinstate the benefits RTI administrators were paying. 

2. The LTV-DB offset to I IRTI-Plan benefit 

As discussed above, PBGC/s determination of 1'---______ _ 

RTI-Plan benefit included a LTV-DB offset amount of $295.80 1 which 

differed from the $287.65 benefit amount that PBGC had determined 

for the LTV Plan. To determine whether PBGC correctly used 

different values for these two amounts, the Board examined RTI-Plan 

documents, which provide as follows: 

(i) The RTI Plan's formal document requires an LTV-DB offset 

from the lithe Participant's LTV-Defined Benefit Plan Benefit," 

which is "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 .... 1/; 19 

(ii) The RTI Plan's Summary Plan Description similarly 

requires an LTV-DB offset equal to "the participant's LTV-DBP 

benefi t." The LTV-DBP benefit is defined simply as II the 

monthly amount payable at the participant's age 65 in the form 

of single life annui ty from any defined benefi t plan sponsored 

by the LTV Steel Company"; and 

(iii) To calculate the LTV-DB offset, RTI's actuaries 1 written 

instructions for a benefit-calculation program state, "Confirm 

18 See Consolidated Decision at pages 1-2 and 8-9. 

19 See Enclosure 4, section S.03(b) (1) on page 39, and section 1.26 on page 7_ 
-10-

actual LTV benefi t is unreduced before any reduction factor is 

applied. . . . If actual LTV DBP benefit is available, make 

sure this amount is used to determine RESI DBP benefit." 20 

(iv) A pre-printed RTI-Plan application form allows retiring 

participants to choose between starting an estimated pension 

or "wait until the LTV information is received from PBGC and 

my final pension is calculated before my payments start." 

The Appeals Board concluded that these four documents all 

plainly provide that the LTV-DB offset is based on the actual 

accrued (unreduced) benefit that is payable from the LTV Plan. 

Thus, these documents do not provide for a recalculation of the 

LTV-DB offset based on any actuarial assumptions, employment data, 

or LTV-DCP account balances different than what PBGC already used 

to determine benefits under the LTV Plan. 21 

The Appeals Board thus concluded, based on those documents, 

the RTI Plan's overall design, and the RTI Plan's practice, is that 

PBGC should determine RTI-Plan benefits using the same LTV-Plan 

accrued benefit that PBGC has determined and is fully guaranteeing 

under the LTV Plan. (The LTV DB offset may, however, differ from 

what PBGC is actually paying under the LTV Plan if a participant'S 

LTV Plan benefit is being reduced for early commencement, an 

optional benefit form, or optional pre-retirement survivor annuity 

coverage.) Thus, PBGC must reduce I I LTV offset from 

$295.80 to the $287.65 amount PBGC determined in May 2005. The 

smaller offset is favorable fori I 

3. The RESI-DCP offset tol ~TI-Plan benefit 

PBGC changed the actuarial assumptions for C1] ell] :ti:a ~he 

RESI-DCP offset for many participants r including. ~ 

Specifically, PBGC changed the assumptions RTI used fo'---r-c-a~c-u~-a~t-l~n-g---

the annuity equivalence of DCP distributions. PBGC/s decision to 

change actuarial assumptions followed a PBGC precedent on a similar 

terminated pension planl the LTV Plan. 

The circumstances underlying PBGC/s decision to change 

actuarial assumptions for the RESI-DCP offset, which are complex, 

20 The RTI manual requires calculating the LTV Offset without any LTV-Plan 

reductions for early retirement, pre-retirement spouse coverage, or optional form 

of payment. I 1$287.65 LTV-Plan accrued benefit already omits any such 

reduction. See footnote 13. 

21 Also, the LTV Plan already used different actuarial assumptions than the RTI 

Plan did for offsetting a DCP distribution, before PBGC decided to change 

actuarial assumptions. The two plans even differed on what payments constituted 

a distribution requiring an offset - an LTV DCP distribution that was rolled into 

the RESI DCP became an offset in the LTV Plan but not in the RTI Plan. We saw 

no reason why a decision to change the later (RTI) plan's actuarial assumptions 

would imply the two (LTV and RTI) plans' assumptions should be made the same. 
-11-

are discussed in the Appendix. The Appeals Board found that PBGC' s 

reasons for its changes, as well as how they should be applied, are 

unclear in certain respects. For this reason, we are asking PBGC 

officials to revisit the appropriate actuarial assumptions for the 

RESI-DCP offset. Thus, we are not deciding the amount of I "-----____ ~I RESI-DCP offset in this decision. ~--~ 

Also, as discussed above, PBGC's calculation of the RESI-DCP 

offset was based on a $24,876.61 account balance, while RTI used a 

larger $33,263.02 account balance. An offset based on a larger 

account balance produces a smaller RTI-Plan benefit. The Appeals 

Board is therefore also asking PBGC officials to revisi t the 

appropriate account-balance amount for purposes of calculatingc==J 

I I RESI-DCP offset. 

4. 1 1$700 ERB Supplement is not Guaranteed 

As stated above and on pages 8-9 of the Consolidated Decision, 

the "Accrued-at-Normal" limit applies to I Iguaranteed 

benefits. Generally, the Accrued-at-Normal limit provides that 

PBGC cannot guarantee any portion of a temporary supplement if it 

would result in the participant receiving more than the normal 

retirement benefit that is payable as a Straight Life Annuity.22 

As stated on page 9 of the Consoridated Decision, 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. PBGC has established procedures for determining the Accruedat-Normal limit in such plans. As is explained on page 9 of the 

Consolidated Decision, PBGC generally uses the combined benefits In 

both pension plans in applying the Accrued-at-Normal limit. 

PBGC's procedures favorably allow the LTV Supplement to be 

included in I I guaranteed benefit calculation. See 

discussion at pages 9-10 of the Consolidated Decision. The ERB 

program, however, created a second temporary supplement, the 

$700.00 ERB supplement, that until age 63 increased 1 

~-~-----~ combined benefits under both plans to $700.00 more than the amount 

of his combined normal retirement benefits. 23 Therefore, based on 

22 Specifically, PBGC's regulations provide, at 29 Code of Federal Regulations 

("C.F.R.") § 4022.21(a) (1), in pertinent 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 . 

23 For example, using the RTI-plan benefits on page 8 that PBGC calculated, and 

favorably including the LTV Supplement, I b Accrued at Normal Limi t is 

$635.02 {$339.22 age-63 + $295.80 LTV Supplement}, $7 0.00 less than his initial 

RTI Plan-payable benefit. 
-12-

PBGC's regulation and PBGC's procedures for determining the 

Accrued-at-Normal limit in benefit offset plans, none of I "-----____ ~I $700.00 ERB Supplement is guaranteed. "----------" 

5. PBGC's 60% "Phase-in" of Benefit Increases 

The Phase-in Rule provides that PBGC's guarantee of benefit 

increases is phased in over five years from the later of the 

adoption or effective date of the plan amendment or amendments that 

provide for the increases. This phase-in of benefit increases is 

required by ERISA and PBGC's regulations. 24 

For the RTI Plan, certain benefit increases (including those 

under the ERB program, which became effective on January 1, 1999) 

were adopted or effective less than 4 years before the RTI Plan 

terminated. As a result of the Phase-in Rule, I 

~~----~----" 

benefit increases under the ERB and under the 1998 amendment to the 

RTI Plan are guaranteed at 60%.25 

In particular, four different types of benefit increases are 

included in the Phase-in Rule calculations for I IFirst, 

under the September 1998 RTI Plan amendment, his benefit accrual 

rate increased from $33.3334 (capped at 30 years) to $35.00 

(uncapped years). Furthermore, the ERB amendment - which, among 

other things, made him eligible for a benefit determined under the 

70/80 benefit formula - increased his benefit three more ways:26 

• He became eligible for in unreduced benefit o~ 

1999, 10 years before his = ~009 normal retlrement 

date. without either the 1998 amendment or the ERB, he would 

only have been eligible for a Deferred Vested Pension, 

requiring an actuarial reduction for starting early; 

• He became eligible for the Surviving Spouse's Benefi t; 27 and 

• He also became eligible to receive a 5-year certain period 

on his pension at no charge. 28 

24 29 United States Code § 1322 (b) (1), (7) (ERISA requirements) i 29 C.F.R. 

§§ 4022.2, 4022.24, 4022.25 (PBGC's regulations). 

25 A net increase of up to $60.00 per month would be fully guaranteed. See ERISA 

section 4022(b) (7). 

26 The ERB also increased I I benefits by making him eli:ible for the 

RTI Plan's $700.00 per month ERB supplement. Because none of I 

$700.00 ERB supplement is guaranteed as a result of the Accrued-at '-.=o=r=m=a'--I-I"lC-;:;m=l--':tC-,~ 

the $700.00 ERB supplement does not affect his Phase-in Rule calculation. 

21 See Enclosure 4, page 61, section 6.02(a) (2). 

28 See Enclosure 4, page 70, section 7.04(a). 
~13-

Under prior RTI Plan provisions (the "1993 Plan") ,'---I ______ ~ qualified only for a Deferred Vested retirement, and for none of 

the four improvements discussed immediately above. Thus, after 

removing the non~guaranteed $700.00 ERB Supplement because of the 

Accrued-at-Normal limit, the remaining benefit is subject to the 

Phase-in Rule. The Benefit Statement that PBGC will provide with 

its new determination for I Iwill explain PBGC's new 

guaranteed-benefit calculations. 

Decision 

Having applied the law, regulations, and Plan provisions to 

the facts in his case, the Appeals Board decided: (1) the RTI 

Plan's reduction for the LTV-DB offset is decreased from $295.80 to 

$287.65; (2)1 ~ is not entitled to a guaranteed $700.00 

temporary supplement un er the ERB program; and (3) PBGC may 

guarantee only 60% of certain benefit increases that were effective 

September 8, 1998 and January 1f 1999 under the RTI Plan. 

PBGC will redetermine I I guaranteed benefit 

pursuant to this decision. PBGC also will revisit how his RESI-DCP 

offset should be calculated. PBGC's new determination will include 

a 45-day right to appeal all issues not already decided in this 

letter. 

When PBGC's new determination becomes final, he may seek court 

review of PBGC' s determinations wi th respect to the issues he 

raised. We thank you and j I for your patience while we 

carefully reviewed his appeal. 

Sincerely, 

William D. Ellis 

Appeals Board Member 

Appendix: Additional Information Concerning the LTV DCP and 

~ RESI DCP 

Enclosures: 

(1) Redacted copy of the Appeals Board's decision dated 

April 16, 2009 ("Consolidated Decision") (15 pages) 

(2) Copy ofl IJune 27,2008 appeal (2 pages) 

(3) Final Pension Benefit report calculated by RTI on 

August 10, 1999 (7 pages) 
cc: 

-14-

(4) Republic Technologies International, LLC - USWA Defined 

Benefit Plan, Amended and Restated Effective as of 

September 8, 1998 (58 pages) 

(5) LTV Plan Administrators I Calculation of I 

LTV-Plan accrued benefit (2 pages) ~------------~