"'1,, PBGC 

Pension Benefit Guaranty Corporation 

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

www.pbgc.gov Protecting America"a Pensions 

March 31, 2006 

Re: Appeal I I, Case 195241 

LTV Steel Salaried Pension Plan (the ~Salaried Plan") 

Dear Mr. 1 I: 

The Appeals Board has reviewed your appeal of PBGC's April 20, 

2005 determination of the LTV defined benefit pension plans you 

accrued benefits in. As explained below, we must deny your appeal. 

However, you have 45 days from the date of this letter to appeal 

any new issues in PBGC's October 17, 2005 determination not already 

decided in this letter. 

PBGC's Determination 

PBGC found· that effective January 13, 1987, your accruals 

changed from the Hourly Plan 1 to the Salaried Plan. A PBGC 

official explained, in an April 14, 2005 letter: 

• 

• 

• 

LTV plan administrators had already found your accruals 

changed from the Hourly Plan to the Salaried Plan effective 

January 13, 1987. After that date, they calculated benefit 

~ccruals for Hennepin Guards, 2 such as you, in the Salaried 

Plan instead of the Hourly Plan. 

Under a May 1, 1988 LTV-Union 3 Agreement, it was "~greed that 

the salary compensation and benefit programs applicable to 

non-union, non-exempt salaried employees shall be applicable 

to salaried Plant Guard employees .... " 

An April 30, 1998 Union Agreement contained a similar 

statement to that above. The 1998 Union Agreement did not 

apply the Hourly Plan to the Hennepin Guards even though the 

Hourly Plan had been restored years earlier. 

1 the LTV Steel Hourly Pension Plan, successor to the Jones 

and Laughlin Hourly Pension Plan 

2 employees in the Plant Guard bargaining unit at the Hennepin 

Works 

3 International Union, United Plant Guards Workers of America 
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• PBGC has found no documents requiring Hennepin Guards to 

accrue benefits in the Hourly defined benefit plan beginning 

January 13, 1987. To the contrary, LTV consistently calculated 

your benefit accruals beginning January 13, 1987 in both the 

Salaried Plan and the salaried defined contribution plan. 

We note LTV also maintained two defined contribution plans: 

(i) the LTV Steel Retirement Plan (the "LSRP"), covering 

most salaried employees. LSRP benefit amounts are used 

as reductions in Salaried Plan benefit formulas. 

(ii) the LTV Steel-USWA Pension Plan (the "LUSWP"), 

covering most hourly employees. LUSWP benefit amounts 

are used as reductions in Hourly Plan benefit formulas. 

The two defined contribution plans were often referred to by 

the same names: the "DCP," the "Defined Contribution Plan," or 

the "Defined Contribution Pension." 

Your Appeal 

In your August 15, 2005 

determination that your pension 

Salaried Plan in 1987: 

appeal, 

accruals 

you disputed PBGe's 

swi tched back to the 

• You noted the Hourly Plan was terminated effective January 13, 

1987, and was restored following a 1992 LTV-USW agreement. 

You concluded a 1983 Union agreement required automatically 

restoring Hourly Plan accruals for the Hennepin Guards, too. 

• You disputed PBGC's reliance on a quote from the 1988 Union 

Agreement which refers only to salary and benefits, not 

explicitly to "pensions." See the quote n~ar the bottom of 

page 1 of this letter. You stated: 

"Nowhere does it state we are giving up an hourly pension 

plan for a salary pension plan. There was no salary 

pension plan and hadn't been since it was frozen on 

July 21, 1981. It would have been completely impossible 

to go with a salary pension plan in 1988 because there 

was no salary pension togo to .... I would like to see 

how it could be worded for us and our International Union 

to agree to something that didn't exist." 

We noted, the 1983 Agreement, a copy of which you provided, 

states: 

"Effective May I, 1983, the pension benefits applicable to the 

majority of the hourly paid employees of [J&L] shall be 

applicable to the Plant Guard employees ... for the Life of 

the May 1, 19B3 Labor Agreement .... (underlining added) 
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In the event of any change relating to pension benefits 

applicable to such majority of hourly paid employees ... , this 

Agreement shall continue in effect and such change shall be 

applicable to the Plant Guard employees covered hereby." 

You asserted the last quoted sentence requires the Hennepin Guards 

to remain members of the Hourly Plan forever. Instead, we found 

the sentence you cite simply requires applying to the Hennepin 

Guards any intervening Hourly Plan changes without causing the 1983 

Agreement to be renegotiated. Your interpretation plainly 

contradicts the underlined condition, requiring application of 

hourly pension provisions only for the life of the 1983 Agreement. 

Even if both the Union and LTV had agreed in 1983 that the 

Hennepin Guards would remain in the Hourly Plan forever, that 

agreement was superseded by later agreements. 

Because the Plans had not yet been restored, you disputed 

whether defined benefit pensions could have been within the scope 

of the 1988 Agreement's reference to "salary. compensation and 

benefit programs." We note that consistent with your claim, LTV 

and the Union saw the need to include a separate pension agreement 

(the "DCP Agreement") on the salaried defined contribution plan. 

See Enclosure 5, page 24. The DCP Agreement may have been included 

because pensions were otherwise outside the 1988 Agreement's scope 

or simply because of the DCP Agreement's 1987 effective date. 

Regardless of whether yet-to-be-restored pension plans were 

within the 1988 Agreement's scope, LTV negotiated pension 

restoration with its unions following the Supreme Court's 1990 

decision. For example, LTV and the USW signed a pension 

restoration agreement on September 10, 1992. See Enclosure 3. 

Following those negotiations, other Union locals, but not the 

Hennepin Guards, are explicitly included in the restored Hourly 

Plan documents: the Cleveland Plant Guards are listed in the 

document effective January 1, 1993, and the Cleveland Plant Guards 

plus 2 more Union locals are listed in the document effective 

November 1, 1999. See Enclosures 1 and 2. Both Hourly Plan 

documents explicitly refer to union agreements and provides lists. 

For example, see Enclosure 1 page 5 and Exhibit E. 

Thus, the Hennepin Guards were excluded from the 1993 Hourly 

Plan, with the Union's knowledge, and consistent with a plain 

reading of the 1988 Agreement. Similarly, the 1988 Agreement 

included the DCP Agreement that the Hennepin Guards would 

participate in the salaried DCP. The 1998 Agreement again included 

the Hennepin Guards in "salary and compensation benefit programs" 

of the salaried employees, without including the Hourly Plan, even 

though it had been restored years before. The subsequent 1999 
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Hourly Plan, like the 1993 Hourly Plan, again included plant guards 

from other Union locals, but not the Hennepin Guards. 

Therefore, all available documents are consistent with PBGC's 

plain reading of the 1988 Agreement. Finally, as noted below, we 

found that in practice, LTV consistently calculated Hennepin 

Guards' accruals after January 12, 1987 under the Salaried Plan. 

Thus, all available documents and practice show widespread 

knowledge and agreement that Hennepin Guards' accruals after 

January 12, 1987, such as yours, were under the Salaried Plan. 

Additional Issues You Raised 

• You questioned how Plan documents permit your benefit accruals 

after January 12, 1987 to be under the Salaried Plan instead 

of the Hourly Plan. 

• 

Plan coverage is determined bycollecti ve bargaining 

agreements. See Enclosure 2 page 6 and Enclosure 8 page 5. 

Under collective bargaining agreements, the Hennepin Guards 

were not covered under the Hourly Plan after January 12, 1987, 

as explained above, and under Plan documents - see the final 

page of Enclosure I, and Enclosure 2 page 131. Thus, the 

(salaried) Hennepin Guards were covered under the Salaried 

Plan. See Enclosure 8 page 5. 

You submitted 1989 LTV pension calculations and your 1992 

bankruptcy claim for benefits accrued starting under the 

Salaried Plan on September 5, 1968 and ending in the Hourly 

Plan on January 12, 1987. 

The 1989 and 1992 documents you submitted show only that the 

two plans would pay parts of the total benefit you had accrued 

through January 12, 1987. Those documents do not indicate 

which defined benefit plan would provide subsequent accruals 

upon restoration. Thus, those documents do not affect PBGC's 

determination on your subsequent plan coverage. 

You stated your bankruptcy filing shows an understanding that 

on January 1, 1993 you would resume accruing benefits until 

your retirement. You indicate you believe your accruals did 

not resume under a restored plan on January I, 1993. 

To the contrary, PBGC found restoration of the Salaried Plan 

caused your benefits accruals to be resumed effective 

January 17, 1987, earlier and more favorably than January 1, 

1993. See Line (4) of the benefit statement attached to 

PBGC's October 17, 2005 new determination on your benefit 

amount. Also, PBGC has never denied your claim that you 

earned vested benefits in both plans. In such a case where an 

employee switches between the Hourly and Salaried Plans, each 

plan requires: 
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(1) The final total accrued benefit is calculated as if 

all service had been earned under the final plan, and 

(2) To avoid duplication of benefits, the accrued benefit 

under the final plan is reduced by the benefit payable 

under a prior plan. See Enclosure 8 page 35. 

.. You and another appellant have questioned PBGC's practices 

paying Hennepin Guards benefits accrued after January 12, 

1987. 

.. 

.. 

.. 

We researched LTV and PBGC practices on other sample Hennepin 

Guards whose employment, like yours, ended after January 12, 

1987. We found that following steps (1) and (2) above, LTV 

and PBGC always used the Salaried Plan as the final plan the 

Hennepin Guards participated in. 4 

You submitted 1989 LTV documents showing you had earned 

benefits both in the Hourly Plan and in the salaried defined 

contribution plan (the LTV Steel Retirement Plan). 

We found those documents do not contradict PBGe's 

determination that when the Hourly and Salaried Plans were 

later restored, you resumed accruing benefits in the Salaried 

Plan instead of in the Hourly Plan. 

You asked for copies of any agreements stating Hennepin Guards 

would start accruing pension benefits in the Salaried Plan 

instead of the Hourly Plan. 

We found no agreements explicitly stating Hennepin Guards' 

accruals were being switched to the Salaried Plan effective 

January 13, 1987. Nevertheless, as explained above, we found 

that conclusion is required by the available documents and the 

actions of the parties involved. 

You stated LTV failed to notify the Union" and employees within 

210 days of when the Hennepin Guards were excluded from the 

restored Hourly Plan. 

We found the 1988 and 1998 LTV-Union agreements and Hourly 

Plan documents required the Hennepin Guards to accrue benefits 

in the Salaried Plan instead of the Hourly Plan. See above. 

Several Union offic~als signed those Agreements, including 

your co-appellants I I (1988) and "---I _~ 

4 Such a participant's final total accrued defined benefit 

could simply be his accrued benefit on January 12, 1987 - because 

the Salaried (and Hourly) Plans use sometimes sizable offsets for 

DCP accruals after January 12, 1987. In this case, such a 

participant's final total accrued benefit could be based only on 

service from the hire date through January 12, 1987. 
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'--------=----=-----c-I (1998). Thus, contrary to your statement, Union 

officials' signatures on those LTV-Union agreements indicates 

they were notified of the contents of the agreements they were 

signing. 

Other Union locals, but not the Hennepin Guards, are 

explicitly included in the restored Hourly Plan documents 

under collective bargaining agreements. See page 3 above. It 

is unreasonable to believe in these circumstances that the 

Union could have been unaware or disagreed with the Hennepin 

Guard's exclusion from active participation in the Hourly 

Plan. 

You have not provided and we have not located copies of the 

notices LTV provided individual Hennepin Guards about the 

restoration of the defined benefit pension plans they would 

accrue benefits in. However, you provided a copy of a 

November 8, 1999 summary LTV addressed to Salaried Employees 

explaining new Salaried Plan benefits. 

Thus, you have shown that in 1999 or earlier you personally 

were notified in detail about your Salaried Plan benefit 

accrual formulas. Further, we have no record that following 

your notification you objected to your Salaried Plan benefit 

accruals until PBGC started estimating benefit amounts in 

2002. 

Regardless of when you and other Hennepin Guards were 

personally notified, you have provided no evidence that you 

were told you would accrue benefits in other than the restored 

Salaried Plan. Thus, your statement about notices to 

employees do not contradict PBGC's determination on your Plan 

coverage. 

• You questioned the January D, 1987 retirement date LTV 

recorded for you under the Hourly Plan. 

• 

Whether or how that "retirement date," affects your total PBGC 

benefit amount is not covered by the PBGC determination you 

have appealed. For your information, under the Hourly Plan, 

the retirement date is defined to be the date service ends. 

As explained above, your benefit accruals switched to the 

Salaried Plan from the Hourly Plan on January 13, 1987. Thus, 

your Hourly Plan "retirement date" is January 13, 1987. 

You proposed how PBGC should calculate your pension. In 

particular, you disputed any reductions for a defined 

contribution balance such as from a 401(k) plan. You stated 

the Union was not notified when the DCP was merged into the 

Salaried Plan. You also stated PBGC is using incorrect 

abstracts and data, including service, to determine your 
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benefit. You included copies of benefit calculation documents 

created before and after the Plans terminated. 

Please note, the April 20, 2005 determination you appealed was 

only on plan coverage, not on benefit calculations. PBGC 

subsequently determined your benefit amount, on October 17, 

2005, before your current appeal could be resolved. As we 

subsequently agreed last November, you will have 45 days from 

the date of this letter to appeal the October 17, 2005 

determination. Thus, we will address any specific benefitcalculation (not plan-coverage) issues you raise only in a 

new, timely-filed appeal of the October 17, 2005 

determination. 

• Your elected representatives inquired whether you may meet 

with PBGC officials in Chicago to discuss your concerns. 

In general, an opportunity to appear before the Appeals Board 

"will be permitted when the Appeals Board determines that 

witnesses will contribute to the resolution of a factual 

dispute." See PBGC's regulation 29 CFR §4003.55(b). In your 

case, the Appeals Board decided your appeal based solely on 

written documents. Therefore, the Board decided your appeal 

without asking witnesses to appear. 

You may address any further requests to meet with PBGC 

officials by writing to: 

Decision 

PBGC Authorized Plan Representative 

PO Box 151750 

Alexandria, ·VA 22315-1750 

Having applied Plan provisions to the facts in your c~se, we 

must deny your appeal of PBGC's April 20, 2005 determination. You 

have 45 days from the date of this letter to appeal any new issues 

in PBGC's October 17, 2005 determination not already decided in 

this letter. 

When any such new appeal is resolved, or when the 45-day 

appeal period ends if you do not file a timely new appeal, you may 

seek court review of PBGC's April 20, 2005 determination with 

respect to the issues you have raised. Thank you for your patience 

while we carefully reviewed your August 15, 2005 appeal. 

Sincerely, 

William D. Ellis 

Appeals Board Member