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"'1,, PBGe 

Protecting AmeriG.'. ""noton. 

Pension Benefit Guaranty Corporation 

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

MAR 31 2008 

Re: Appeal ,---I __ ~I; Weirton Retirement Program. PBGC Case # 1976 t 4 

DearMr·~1 ___ I: ' 

The Appeals Board has reviewed your appeal of PBGe's September 20, 2005 

detennination of your benefit under the Weirton Retirement Program, For the reasons explained 

. below, the Board found no basis presented for changing PBGC's detennination. Therefore. your 

appeal is denied. 

Background 

National Steel Corporation (National) owned the Weirton Steel Division until 1984. 

Through an employee buyout, a new company, Weirton Steel Corporation (Weirton), purchased 

the operating assets of Weirton Steel Division effective January II, 1984. 

Both before and after the sale, National sponsored and maintained the Weirton 

Retirement Program (which we will refer to as the "National Plan"). Also, effective January 11, 

1984, Weirton established a separate, new plan, the Weirton Steel Corporation Retirement Plan 

("Weirton Plan"), PBGC Case #20 1097. As part'ofthe sales agreement, Weirton agreed that the 

Weirton Plan would assume responsibility for benefits accrued by Weirton Steel Division 

employees after May I, 1983. 

Both the National Plan and the Weirton Plan terminated without sufficient assets to 

provide all benefits under Title IV of the Employee Retirement [neome Security Act (ERISA). 

The National Plan terminated as of Decernber 6,2002, and the Weirton Plan tenninated as of 

October 21, 2003. PBGC is the trustee of both Plans. 

You were a participant in both of the Plans. Under the terms of the National Plan. your 

benefit is calculated using your years of service with both National and Weirton. The benefit 

provided by the National Plan is calculated using your years of service with both employers 
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multiplied by a. factor equal to your years of service as of May I, 1983, divided by your total 

service with the two employers.' (The National Plan, however, limits "Earnings" to the amounts 

paid by National prior to May 1, 1983.2

) 

Your Weirton Plan benefit, which is calculated based on the terms of that Plan, also is 

calculated using your years of service earned with both employers. Additionally, the Weirton 

Plan provides for a reduction (offset) for the amount you are entitled to receive under the 

National Plan. 

Please note that benefits under the Plans are paid separately. Also note that PBGC's 

September 20, 2005 letter is its detennination of your benefit under the Nationa[Plan only. You 

will roceive a separate detennination, including appeal rights, of your benefit under the Weirton 

Plan at a later date. (The files show that PBGe sent you an estimate of your Weirton Plan 

benefit by letter dated March 11,2004. To understand your benefits, you should also refer to 

this Weirton Plan correspondence.) 

PBGC's Determinqtion. Your Appeal and Related Correspondence 

PBGC's September 20,2005 letter said that you are entitled to a National Plan benefit 

of$161.91 per month as a Straight Life Annuity if payments begin on March 1,2020, your 

normal retirement date. The letter enc]osed"a benefit statement which shows how your National 

Plan benefit was calculated and the data used in the calculation, including; (1) May 3, 1974 as 

your Continuous Service Start Date; (2) October 2, 1974 as your Continuous Service Start Date 

Adjusted for Breaks in Service after May ], 1983"; (3) you had 28.17 Total Years of Credited 

Service (or benefit service); and (4) as of May I, 1983, you had 9.00 Years of Credited Service 

with National. 

In your September 24,2005 and November 7, 2005 letters of appeal, you state that your 

employment with Weirton began on MayO 1974 and ended on May D, 2004, for a total of 

30 years and 16 days of service and, therefore, you should have started receiving an immediate 

pension, which you believe to be more than $1,600.00 per month. You also disputed the 

October 2, 1974 Adjusted Continuous Service Start Date, stating that the MayO 1974 Service 

Start Date was reinstated. You asked that we correct your benefit amount, immediately start 

paying you your monthly pension, and pay you the missed payments in a lump sum. 

'National Plan document effective January 1, 1998 ("1998 Document"), Part 1, Section I 

(19) ("Service and Related Terms"); Part 2, Section II ("Eligibility for Pension"); and Part 2, 

Section III ("Amount of Pension"). 

21998 Document. Part 1, Section 1; (7) and (8). 
Discussion 

When PBGe becomes the trustee of a tenninated pension plan, PBGe pays benefits to 

the participants according to the tenns of the plan, subject to the requirements and guarantee 

limits of ERISA. 

According to the records PBGC obtained from Weirton, you began working for the 

Weirton Steel Division of National on May[] 1974; you were laid offon OctoberD, 1981 and 

returned MarchD. 1984, for a period of absence of two years and five months; and, you were 

actively employed with Weirton when the National Plan terminated on December 6,2002. 

Forindividuals, like yourself, who worked as an hourly employee for National, eligibility 

for benefits and pension benefit amounts under the National Plan are determined based on your 

"Continuous Service.,,3 The National Plan defines Continuous Service to include periods of 

employment both with National prior to the asset sale and with Weirton after the sale.4 

The National Plan document also provides that absences from work for periods longer 

than two years nonnally constitute a break in Continuous Service. Although the National Plan 

and applicable collective bargaining agreements allow such a break to be removed if the 

employee later returns to work, the National Plan also specifically treats absences of more than 

two year duration as follows: 

(1) There shall be no deduction for any time lost which does not constitute a 

break in Continuous Service, except that in determining the length of 

Continuous Service for purposes of this Program: 

(i) that portion of any absence which continues beyond two years 

from commencement of absence due to a layoff, physical disability 

or leave of absence shall not he creditable as Continuous Service 

s 

Thus, while a layoff longer than two-years' duration does not constitute a break in Continuous 

Service if an employee returns to work, only the first two years of such a layoff counts in 

determining a participant's total length of Continuous Service. We further note that, with respect 

J1998 Document, Part 1, Section I (l9)(d). 

41998 Document, Part 1, Section I (13) (definitions of UNa tiona 1," "Weirton, and· 

"Company"; Section I (19)(d) (definition of "Continuous Service"). 

51998 Document, Part I, Section I, (19)(d) (1) (emphasis added]. 
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to layoffs of more than two years, the National Plan does not distinguish between periods of 

layoff with National, with Weirton, or which straddle an individual's employment with both 

compames. 

In your case, you were absent from work for a period of two years and five months. 

Although your break in Continuous Service was removed when you returned to work on 

MarchD 1984, the National Plan (as discussed above) did not allow you to receive Continuous 

Service credit for your entire period of layoff. Rather, the Plan provided that only your first two 

years of your layoff period (i.e., from October II, 1981 through October 10. 1983) would count.6 

Please note that it was the National Plan's practice to adjust the employee's date of hire 

in situations involving breaks in service, rather than to account for such breaks separately. Thus, 

for you, the National Plan's administrators used an October 2, 1974 adjusted date of hire, which 

is five months after your actual date of hire (MaD 1974). Thus. the adjusted date of hire that 

the National Plan's administrators and PBGC used in your case for calculation of your 

Continuous Service was consistent with the National Plan's terms. 

Under ERISA and PBGe regulations, participants do not receive pension credit for 

service after a plan's tennination date, even if they continue to work for their employer after the 

plan terminated (ERlSA Section 4022(a); Code of Federal Regulation (CFR) Part 4022.4(a». 

Therefore. for purposes of your PBGC benefits with respect to the National Plan, your 

Continuous Service is calculated from your adjusted Date of Hire (October 2, 1974) to the date 

the National Plan terminated (December 6, 2002). As PBGe detennined, this is equal to 

28 years and two months, or 28.17 years. 

As PBGe's Benefit Statement shows, the National Plan provided several benefit 

fonnulas~ with" the Minimum Pension Fonnula providing you with the largest benefit amount. 

The National Plan, however, provides that this benefit amount (shown as $512.73 per month in 

the Benefit Statement) must be reduced by fraction, which is referred to in the Benefit Statement 

as the '·Pro-Ration Factor." The numerator of this Pro-Ration Factor is the number of years (and 

fractions calculated to the nearest month) of Benefit Service with National to May I, 1983, and 

the denominator is the number of years (and fractions) of Benefit Service with National and 

Weirton? 

61998 Document, Part I, Section r (l9)(d)(l). 

71998 Document, Part 2. Section VI ("Adjustments in Pension or Benefit Amounts"). 

Please note that the reference to "Effective Date" in this Section is defined in Part I, Section I 

(8)(a) as "May I, 1983." 
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As previously noted, you did not experience a break in Continuous Service until 

OctoberD f ] 983, which was two years after your layoff date. As a resultt in determining your 

service with National up to May), 1983, there was no need to adjust your date of hire. Thus. 

as shown on the Benefit Statement, you receive full credit for the entire nine (9.00) years from 

MaD 1974 through Apri130, 1983, which is the numerator of the Pro-Ration factor. 

For individuals who had worked for National as hourly employees, "Benefit Service" has 

the same meaning as "Continuous Service."s Thus, for you, the denominator of the Pro-Ration 

Factor is 28 years and two months, or 28.17 years (see discussion above). The Pro-Ration 

Factor, therefore, is equal to 9.00 years divided by 28.17 years, or 0.3l9489, which is what 

PBGC calculated. 

As discussed above, the National Plan documents provided that you continued to be 

covered under that Plan's benefit provisions even after you became an employee of Weirton. 

Furthermore, your National Plan benefit is based on your Continuous Service with both 

employers, with the benefit then reduced using the Pro-Ration Factor. Thus, since the National 

Plan clearly provided that periods of layoff in excess of two years were excluded (even if it 

occurred after you started working for Weirton), the Appeals Board found no basis 10 change 

how PBGC determined your service under the National Plan. Even assuming that you were an 

active employee with no break. in service from your MaYLJ 1974 date of hire to the Weirton 

Plan's termination date of October 21, 2003, you still would not have 30 years of service. 

You stated that "according to the agreement with Weirton Steel Corporation, the 

Independent Steelworkers Union, and PBGC. I should have started receiving my retirement 

benefits immediately." It appears that you are referring to the fact that, shortly after PBGC 

tenninated the Weirton Plan, the Company and Union attempted to amend the Plan by agreement 

to remove the two-year limitation with respect to the crediting ofservice after a layoff. PBGC 

informed them that the Agency could not give effect to such post-termination amendment and, 

therefore, any increase in benefits resulting from such an agreement could not be guaranteed by 

PBGC. The Appeals Board found that there was no agreement binding on PBGC that would 

provide yOll with a right to an immediate benefit. 

As noted earlier, benefits under the two Plans are paid separately. PBGC will send you 

a separate determination of your benefit under the Weirton Plan. You will also have appeal 

rights with respect to that determination. Please keep in mind that, in accordance with the terms 

of the Plans, your Weirton Plan benefit is offset (reduced) by your benefit amount under the 

National Plan. 

81998 Document, Part I, Section I (19)(b). 
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Decision 

Having applied the tenns of the Plan~ the provisions of ERISA and PBGe regulations to 

the facts in this case., the Appeals Board found no basis presented for changing PBGe's 

September 20,2005 detennination. This is the Agency's final decision on the issues your appeal 

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

[f you have questions, please can PBGe' s Customer Contact Center at 1-800-400-7242. 

Sincerely, 

Sherline M. Brickus 

Member, Appeals Board