Pension Benefit Guaranty Corporation 

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

November 30, 2006 

Re: f Case #193942, Neuman Distributors, Inc. Pension 

Plan and Trust (the "Neuman Plan") 

Dear I I: 

The Appeals Board reviewed your appeal of PBGC'sl l200S determination that 

you are not entitled to a benefit from the Neuman Plan. For the reasons stated below, the 

Board changed PBGC's determination by finding that you are entitled to a benefit. On the 

basis of this decision, PBGC's Benefits Administration and Payment Department will send 

you a new benefit determination with a new 4S-day right of appeal. 

PBGC's Benefit Determination and Your Appeal 

PBGC's determination said that you are not entitled to a benefit because you earned 

less than the five years of service the Plan required for vesting. Your June 20, 200S appeal 

stat~d that Neuman filed for Chapter 11 sometime in March of 2000, that the Company 

employed you until June of 2000, and that you would have completed five years of service 

in June of 2001. You noted that an employee from Neuman's Human Resources department 

informed you on your last day that Neuman would extend your service to five years because 

it was going bankrupt and that, as a result, you would be eligible to receive a benefit upon 

retirement. You submitted a number of documents in support of your appeal, including the 

Notice of Intent to Terminate the Neuman Plan, dated April 20, 2001, you received from the 

bankruptcy trustee. 

Background 

The Neuman Plan terminated, effective June 30, 2001, and PBGC became trustee on 

June 2S, 2002. The terms of the Plan, the provisions of the Employee Retirement Income 

Security Act ("ERISA"), and PBGC regulations and policies determine your entitlement to a 

benefit. 
When the Plan terminated, PBGC records show that Plan assets were sufficient to 

satisfy all Plan benefits PBGC guarantees under Title IV of ERISA. To determine the benefits 

PBGC can pay, ERISA section 4044 provides for the allocation of Plan assets to the following 

six priority categories (PC's), in PC order: (1) voluntary employee contributions (none in the 

Neuman Plan); (2) mandatory employee contributions (none); (3) benefits that were, or could 

have been, in pay status three years before the Plan's termination date; (4) all other PBGCguaranteed benefits; (5) all other nonguaranteed vested benefits; and (6) all other (nonvested) 

benefits. PBGC records show that Plan assets were more than sufficient to provide all 

benefits through PC-6. 

Section 13.3 of the Neuman Plan describes rules that apply in the event the Plan 

should terminate: 

Discussion 

The Employer, without the consent of any Participant may 

terminate this Trust as to its Employees at any time ... After all 

liabilities of the Plan have been satisfied (emphasis added), the 

Employer shall be entitled to any balance of the funds which 

shall remain. 

The Plan, as restated effective May 1, 1989, provides that a participant has a right to 

a pension benefit upon completing five years of Vesting Service. The Plan defines "Years of 

Vesting Service" as "Employee's years of Credited Service." Under Plan section 1.12(a), an 

employee earns one year of Credited Service for each Plan Year (May 1st to April 30th) in 

which he or she works at least 1,000 hours. 

The records PBGC's auditors obtained from the former Plan Administrator show that 

you were actively employed at Neuman from 1 11996 throughl 12000. Thus, you 

earned four years of Vesting Service during that period (i.e., one year of vesting service for 

each of the Plan Years beginning 1 ft of 1996,1997,1998 and 1999). 

PBGC records also contain a copy of the Actuarial Valuation Report for the 2000 Plan 

Year. This Valuation includes (1) a summary of Plan Specifications with the specification for 

vesting shown as one year, and (2) aIist of "v~sted terminated" participants with fewer than 

five years of vesting service. Your name is on this list. Based on this information, we found 

that your accrued Plan benefit is a liability of the Plan that must be satisfied under Plan 

section 13.3 to the extent Plan assets are available. Because PBGC records show that Plan 

assets are available in accordance with ERISA section 4044, we found that you are entitled to 

a benefit under the Neuman Plan. 

Decision 

Having applied the provisions of the Plan, the law, and PBGC regulations and policies 

to the facts in this case, the Appeals Board changed PBGC'sl 12005 determination by 

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finding that you are entitled to a benefit under the Neuman Plan. We will forward a copy 

of this decision to PBGC's Benefits Administration and Payment Department, who will issue 

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

Meanwhile, if you need other information, please call PBGC's Customer Contact 

Center at 1-800-400-7242. 

Sincerely, 

Linda M. Mizzi 

Member, Appeals Board 

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