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! Pension Benefit Guaranty Corporation S 

OD 

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

NOV 2'9 2002 

Re: Appeal Republic Retirement Plan 

The Appeals Board reviewed your appeal of PBGC's October 31, 

1997 revised determination of your guaranteed benefit. In its 

review, the Board found that the lump-sum payment of $140,794,32 

you received in 1986 did not equal the full present value of your 

Plan benefit because LTV miscalculated the benefit that you had 

accrued as of December 31, 1985 when they calculated your 1.5% 

Pension under the January 1; 1986 "benefit freeze" amendment. 

However, as we explain below, the September 1986 lump sum 

payment - although less than your full plan benefit - covered all 

the benefits that PBGC guarantees. Accordingly, the Appeals Board 

concluded that the additional payments totaling $68,096.18, which 

you received from PBGC in 1997, were made in error. 

PBGC decisions to seek repayment of overpayments are not 

subject to appeal. The Appeals Board notes, however, that after 

your appeal was filed PBGC made certain changes in its regulations 

and policies that govern the repayments of overpayments, and it 

also revised its debt collection procedures. These changes, which 

generally are favorable to plan participants, may apply to you. As 

is discussed later in this decision, we are forwarding a copy of 

this decision to the appropriate officials within PBGC, who will 

then decide whether you are entitled to any relief under the new 

regulations, policies, and procedures. 

PBGC's Determinations and Your Appeal 

PBGC's March 21, 199'7 benefit determination letter ("BDL1") 

said that you were entitled to a guaranteed monthly benefit 

beginning on your Normal Retirement Date ("NRD"; December 1, 1996) 

of $1,789.77 payable as a Straight Life Annuity ("SLA") , which 

provides a benefit for your lifetime and no survivor benefit. BDLl 

noted that if you were married when you started receiving your 

benefit, you would receive a reduced monthly amount payable as a 

Joint and 50% Survivor Annuity ("J&5O%SA"), under which your 

eligible spouse would receive one-half of your monthly amount if 

you died before she did. PBGC included a Benefit Statement showing 
how it calculated your guaranteed benefit amount payable as an SLA 

at either your NRD, or your Earliest Retirement Date ("ERD"; 

December 1, 1986). You did not appeal BDLl within the statutory 

45-day appeal period, and thus, it became final on May 6, 1997. 

PBGC records show that PBGC started paying you a monthly 

benefit on July 1, 1997, with a retroactive actual retirement date 

of December 1, 1993, and paid you a $60,481.88 lump sum on 

October 1, 1997 to reimburse you for missed payments from 

December 1993 through June 1997, including interest on the missed 

payments. Please note that, in general, PBGC does not allow 

participants to elect a retroactive retirement date, but in your 

case, PBGC applied its Retroactive Early Retirement policy and 

found that because under the Plan's terms, your earliest unreduced 

retirement age was age 62, they could allow you to retire 

retroactively to December 1, 1993 even though your PBGC-guaranteed 

benefit was reduced on account of the Maximum Guaranteed Benefit 

(''MGB") limit, a limit set by Congress when it enacted the Employee 

Retirement Income Security Act of 1974 ("ERISA"). 

Based on documents (see Enclosure 1) received from LW's 

former benefits administrator ("EDS") after PBGC began paying you 

a monthly benefit, PBGC sent you an October 31, 1997 revised 

benefit determination ("BDLZn) . BDL2 said that you are not 

entitled to a PBGC-guaranteed benefit because the documents that 

PBGC received from EDS indicated that you received the present 

value of your deferred vested pension in the amount of $140,794.32 

as payment in full for benefits due you under the Plan. 

BDL2 also said that PBGC must collect (recover) all payments 

made to you in error, and that the total of the erroneous payments 

as of October 31, 1997 was $65,558.08. PBGC sent you a second 

demand letter on December 30, 1997, saying that additional payments 

made to you during the 45-day appeal period increased your total 

overpayment to $68,096.18. 

PBGC records show that you e-mailed an extension request to 

the Appeals Board on December 13, 1997, that the extension request 

was granted, and that you filed a timely appeal on February 19, 

1998. Your appeal indicates that although you understood what LW 

told you when you received the lump sum amount in September 1986, 

you later filed a claim with the bankruptcy trustee for a larger 

benefit, and thought that BDLl reflected a positive change in LTV1s 

point-of-view. You said that you provided documentation to the 

bankruptcy court that the date of hire used in calculating your 

vested accrued benefit should be November 1949 instead of the May 

1958 date shown in LTV's records and on the Benefit Statement you 

received with BDL1. 
m Discussion 

I 

ip PBGC's policies provide that decisions to seek repayment of 

overpayments are not subject to appeal. However, the underlying 

determinations of benefit entitlement and the amount are subject to 

appeal. Thus, the Appeals Board's scope of review of your appeal 

of BDL2 is limited to BDL2's conclusion that you were no longer 

entitled to a benefit under the Plan as of the Plants termination 

date, and therefore improperly received benefit payments from PBGC. 

You did not object to BDL2's statement that LTV had paid you 

a lump sum of $140,794.32 in 1986. Furthermore, based on other 

information in PBGC's files, the Board found that you did receive 

a lump sum in that amount from LTV sometime in 1986. 

Although you had already made the election for a lump-sum payout on September 3, 1986, it is not clear whether the release you 

signed on September 8, 1986 meant that you had (1) received the 

lump-sum payment on that date; or (2) would receive it sometime in 

the near future. An Appeals Analyst called you recently and asked 

you when you actually received the lump-sum cash-out payment. You 

told her that you did not recall, but that you would try to find 

any records you may have regarding the date you received that 

payment. 

Because the Appeals Board has not received information 

regarding the actual payment date of your lump-sum, the Board has 

assumed that you received the payment on September 8, 1986. 

In order to determine whether the lump-sum cash-out you 

received covered your full benefit under the Plan, the Appeals 

Board attempted to replicate LTVts calculation of the lump sum. 

During the replication process, the Board took note of the fact 

that in considering other appeals in your Plan, the Appeals.Board 

discovered that PBGC had determined that LTV did not correctly 

calculate vested accrued benefits payable to deferred vested 

participants under the 1986 Plan's 1.5% pension formula. That is, 

while LTV did not apply the Plan-specified "5% addition". in 

calculating a deferred vested participant's 1.5% Pension amount, 

PBGC found that the Plan's language required that it be so applied. 

Because no appellant under the Plan has claimed that PBGC's reading 

of the Plan was incorrect, the Appeals Board accepted it as the 
proper reading of the 1986 Plan. The knowledge that LTV improperly 

did not apply that 5% addition was needed by the Board to 

successfully replicate LTV's calculation of your lump-sum benefit. 

After reviewing the amount of the lump-sum payment you received in 

1986, the Board found that, regardless of whether you received 

payment on September 8, 1986, or sometime thereafter, the lump-sum 

payment you received did not cover the full present value of your 

vested accrued monthly benefit as of the payment date. Please see 

Enclosure 2, in which the Board shows how LTV calculated your lumpsum pay-out, 'based on a monthly 1970 Plan bene'fit of $2,771.36 and 

a payment date of September 8, 1986. 

However, as we discuss below, the amount of your lump-sum 

benefit covered your full PBGC-guaranteed monthly benefit. 

Because your Plan terminated in 1986, the Maximum Guaranteed 

Benefit ("MGB") that PBGC may pay to a participant at age 65 as an 

SLA is $1,789.77 per month. However, as discussed above, the Board 

found that the lump-sum payment you received in 1986 was the 

equivalent of a $2,771.36 monthly benefit payable as an SLA. Thus, 

the Board concluded that the lump-sum payment you received more 

than fully covered your guaranteed monthly benefit. 

You asserted that your date of hire should be changed from May 

1958 to November 1949 because you served in the Korean War during 

a portion of your time away from Republic. The law regarding 

bridging service on account of military service, however, generally 

requires that a pension plan participant return to service with the 

plan sponsor no later than 90 days after military discharge. In 

your appeal letter, you suggested that rather than returning to 

work with LTV, you went on to complete your formal education'after 

you were discharged. Thus, it appears that LTV was under no legal 

obligation to change your hire date. But even if you were entitled 

to an earlier hire date, an earlier hire date would not increase 

your PBGC-guaranteed benefit because PBGC's calculation of your MGB 

is not affected by your date of hire. 

Even after issuance of an Appeals Board decision, PBGC will 

always consider information showing that a participant is entitled 

to a higher benefit, or that the amount of overpayments that PBGC 

seeks to collect is incorrect. If you have or can obtain. 
additional documentation, please send it to the Pension Benefit 

Guaranty Corporation, Insurance Operations Department, P.O. Box 

19153, Washington, DC 20036. 

PBGC also has designated a Recovery Coordinator for benefit 

o$erpayment matters. If you have any questions concerning the 

repayment of overpayments, you should contact the Recovery 

Coordinator. His name and. address is: Jerome 0. Smith, Recovery 

Coordinator, Benefit Payment Administration Branch, Pension Benefit 

Guaranty Corporation, 1200 K Street N.W., Washington D.C. 20005.' 

Decision 

Having applied the law, Plan provisions, and PBGC rules to the 

facts in your case, the Appeals Board found that the lump-sum 

payment of $140,794,32 you received in 1986 did not cover the full 

present value of your Plan-defined benefit because LTV 

miscalculated the benefit that you had accrued as of December 31, 

1985 when it calculated your 1.5% Pension under the January 1, 1986 

"benefit freeze" amendment. 

However, the 1986 lump sum payment -although it covered less 

than your full Plan-defined benefit - did cover all the benefits 

that PBGC guarantees. Accordingly, the Appeals Board concluded 

that payments totaling $68,096.18 that' you received from PBGC in 

1997 were made in error, and are, therefore, subject to recovery. 

The Appeals Board will forward a copy of this decision to 

PBGC's Recovery Coordinator. PBGC will contact you concerning your 

obligation to repay PBGC for the overpayments, taking into 

consideration the fact that the lump sum you. received in 1986 did 

not cover the full present value of your Plan-defined benefit. 

This decision is the final agency action on the issues you 

raised in your appeal. You have exhausted your administrative 

remedies, and may, if you wish, seek court review of this decision. 

If you have additional questions, please call PBGC'S Customer 

Service Center at 1-800-400-7242. 

Sincerely, 

Michel Louis 

Appeals Board Member 

Enclosures (4)