Pension Benefit Guaranty Corporation 

Protecting America's Pensions t 200 K Street, N.W., Washington, D.C. 20005-4026 

August 24, 2006 

Re: I (Case No: 19837000), National Steel 

Corp. Hourly Pen. Plan (the "Plan") 

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

We are responding to your appeal of PBGC's August 11, 2005 

corrected determination of your benefit under the Plan. For the 

reasons stated below, we are changing PBGC's determination to allow 

you to elect a December 6, 2002 retirement date and to have your 

PBGC benefits recalculated based on 38.583 years of continuous 

service. You also will receive a new benefit determination to 

inform you of your benefit amount, with a new 45-day appeal right. 

Determination and Appeal 

PBGC's corrected determination stated you are entitled to a 

monthly benefit of $513.82. This amount is based on your benefit 

starting on December 1, 1988, which PBGC determined was your 

earliest retirement date due to disability. The $513.82 amount 

also is based on the election of the Straight Life Annuity form, 

and your spouse further would be provided with the Plan's Free 

Surviving Spouse Benefit. PBGC additionally determined that you 

are entitled to a retroactive payment for benefits owed between 

December 1, 1988, and the present, plus interest. 

In your September 12, 2005 letter to the Appeals Board, you 

disputed your retirement date of December 1, 1988. You stated 

your continuous service should have accrued until May 2004, when 

you attained age 60. You provided a page from the Agreement 

between Great Lakes Steel and the United Steelworkers of America, 

dated March 1, 1983 (the "1983 Agreement"), as support for changing 

your continuous service. According to this part of the 1983 

Agreement, "Plant continuous service" is broken by: 

"For pension purposes only absence due to 

nonoccupational physical disability which extends beyond 

4 years; provided, however, that plant continuous service 

for pension purposes only, shall continue to accumulate 

for no more than 4 years during absence due to 

nonoccupational physical disability, commencing with the 

first day of such absence." 
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You stated that ~this section indicates that my service with the 

company should continue until I file for retirement, because I was 

on an occupational physical disability rather than a 

nonoccupational physical disability." 

Finally, you asked that your benefit be recalculated as of May 

2004. 

Background 

The records PBGC obtained from National Steel show that you I 

were born on I I hired by National Steel on May 

1964, and sustained an injury on October 10, 1984. It also appears 

that October c=J 1984, was the last date you worked for National 

Steel. You received Workers' Compensation benefits starting in 

1986 (or earlier), and these payments continued up to and beyond 

the Plan's December 6, 2002 termination date. In 2005, you 

furnished PBGC with a February 23, 1988 letter from Social 

Security, which stated that 'you were entitled to Social Security 

disability benefits with payments beginning as of October 1986. 

National Steel's electronic employment records contained an 

entry showing that the Company had terminated your employment ~with 

benefits" as of November 1, 1988. The records PBGC obtained from 

National Steel also contained a Notice of Deferred Vested 

Eligibility that listed a ~Termination Date" of November 1, 1988, 

and "Service Credits" of 24 Years, 5 months, and 25 days. The 

"Service Credits" equaled the elapsed time you worked between your 

May [] 1964 hire date and the November 1, 1988 ~Termination Date." 

This document does not contain your signature, and it is unclear 

from the records whether you received a copy. 

National Steel's records also contained an undated estimated 

retirement calculation that showed a benefit of $515.11 per month 

based on a retirement date of Octoberc==J 1988. This estimate also 

contained the following notation: ~Only eligible for Deferred 

Vested at age 62 - or - if approved - Disability." National Steel 

also had prepared additional undated estimated retirement 

calculations, which showed varying benefit amounts based on 

different retirement dates. 

plan Provisions 

Section 2.5 of the Pension Agreement effective April 30, 1986 

between National Steel Corporation and the United Steelworkers of 

America (~1986 Agreement") provided that a participant who had at 

least 15 years of continuous service and had become permanently 
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incapacitated was eligible to retire and to receive an immediate 

pension. 

Section B of Exhibit C to the 1986 Agreement set forth the 

"continuous service provisions" applicable to employees who worked 

for the Great Lakes Division. This section defined "continuous 

service" as the "service prior to retirement calculated from the 

Employee's last hiring date." It further stated: "There shall be 

no deduction for any time lost which does not constitute a break in 

continuous service, except that in determining length of continuous 

service for pension purposes .. . that portion of any absence which 

continues beyond four years from commencement of absence due to a 

non-occupational physical disability, shall not be creditable as 

continuous service." The language in this provision is consistent 

with the 1983 Agreement provision that you included with your 

appeal. 

Finally, Section B of Exhibit C provided that continuous 

service shall be broken by the following events: (1) voluntarily 

quitting the service; (2) discharge unless reversed by the Basic 

Agreement's grievance procedure; (3) layoff which extends beyond 

four yearsj (4) termination of employment due to a permanent 

shutdown; and (5) absence in excess of one year due to birth or 

adoption of a child. 

Discussion 

When the Plan terminated on December 6, 2002, it did not have 

sufficient assets to provide all benefits PBGC guarantees under 

Title IV of the Employee Retirement Income Security Act (IIERISAII), 

and PBGC became the Plan's trustee. 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. 

National Steel's employment records indicate that National 

Steel considered you to be a terminated employee as of November 1, 

1988. Furthermore, the Company's general practice for the Great 

Lakes Division was to terminate an individual's employment on or 

near the four year anniversary of the last day worked, even if the 

absence from employment was for reasons of disability. 

Ordinarily, the Appeals Board would be hesitant to reverse a 

determination concerning an individual's employment status after 

such a long period of time. However, the records PBGC obtained 

from National Steel do not establish whether or not you were 

notified of National Steel's employment termination decision. We 

also found your situation to be unique because you were still 

receiving Workers' Compensation benefits up to the Plan's 
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termination date and because you never applied for a pension under 

the Plan before its termination date. 

Furthermore, the Plan's terms provide that continuous service 

is broken only in certain limited circumstances: voluntary 

resignation, discharge by the Company, layoff, termination due to 

a permanent shutdown, or absence in excess of one year due to the 

birth of a child or the care of an adopted child. While National 

Steel may have considered your continuous service to have been 

broken based on one of these events, the record before the Appeals 

Board is insufficient to establish that one of these events had 

occurred. Therefore, based on the unique circumstances of your 

case, we concluded that you did not have a break in service that 

occurred prior to the Plan's December 2, 2002 termination date. 

Section C of the Plan nevertheless provides that there is a 

deduction from continuous service for any absence that continues 

beyond four years "due to a non-occupational physical disability." 

You asserted in your appeal that this four-year restriction does 

not apply to you, because you were absent from work due to an 

occupational physical disability, rather than a non-occupational 

physical disability. We agree with you that the Plan's language 

indicates that the four-year limitation does not apply to 

participants such as you who were absent from work due to a 

physical disability that had its origin in the workplace. 

We are unable, however, to grant your request to have your 

benefits determined as of May 2004. ERISA and PBGC regulations 

provide that your service in the Plan stops as of the Plan's 

December 6, 2002 termination date. Therefore, PBGC cannot credit 

you with additional continuous service after December 6, 2002. 

Accordingly, we concluded that your continuous service under the 

plan was 38.583 years, which equaled the amount of time (calculated 

to the nearest month of employment) between your hire date of May 

6, 1964, and the December 6, 2002 Plan termination date. 

Because of legal limits under ERISA and PBGC's regulations, 

the amount of your PBGC benefits based on a December 6, 2002 

retirement date may be less than your Plan benefit. Please also 

note that your retroactive benefits will be payable from only 

January 1, 2003, to the present, rather than from December 1988 as 

PBGC previously had determined. 

Decision 

We changed PBGC's determination to allow you to elect a 

December 6, 2002 retirement date and to have your PBGC benefits 

recalculated based on 38.583 years of continuous service. PBGC's 
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Benefits Administration and Payment Department will issue you a 

corrected benefit determination to implement this decision, and you 

will have a new 45-day appeal right with respect to that new 

determination. Because you will receive a new appeal right, we are 

closing your current appeal. 

We appreciate your patience while PBGC completes this process. 

Meanwhile, if you need other information from PBGC, please call the 

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

Sincerely, 

~}(~ 

Charles Vernon 

Chair, Appeals Board