"v~ Pension Benefit Guaranty Corporation 

1200 K Street, N.W., Washington, D.C. 20005-4026 PBGC www.pbgc.gov Protecting Am.rlca's Pensions 

October 31, 2011 

Re: 	 Appeal 2010-0334, Case 210859-00 

Rockford Product Correlated Pension Plan (the "Plan") 

Dear 	Mr. '-----------" 

The Appeals Board has reviewed your appeal of PBGC's May 7, 

2010 determination of your Plan benefit. 

Summary of Our Decision 

PBGC determined you are entitled to receive $509.77 1 per 

month, the same as you currently receive. The $50 9. 77 amount 

reflects reductions for your accounts in two other Rockford 

Products Corporation ("RPC") benefit plans: 

(1) a $903.81 2 reduction for your account balance in the 

Rockford Products Corporation Savings and Retirement Plan (the 

"S&RP"), and 

(2) a $33.15 3 reduction for your account balance in the 

Rockford 	Products Corporation Employee Stock Ownership Plan 

(the "ESOP"). 

We decided PBGC must redetermine your S&RP reduction. This 

will result in a substantial increase to your current $509.77 

payments. 

Background 

You were born on IL ----------T--I~ You retired LI_____ 2006 

wi th a Joint 66 2/3% Survi'vor (-"J&2/3S") annuity. Plan 

1 [$19.71 average wage x 2,080 hours x 1.25% x 35.00 years 7 12 mos/year 

- $33.15 ESOP - $903.81 S&RP] x 0.9138 J&2/3S annuity form 

2 $144,868.65 estimated S&RP value on 10/31/2006 7 160.2863 annuity factor 

Voluntary employee contributions to the S&RP do not affect this reduction. 

3' 2/3 x $7,971.30 ESOP balance 7 160.2863 annuity factor for age 63 3/12. 
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administrators estimated and started paying your current $509.77 . 4 

per month penslon. 

RPC filed for bankruptcy on July 25, 2007. Your facility 

closed Dece~ber 17, 2007. The Plan terminated December 17, 2007, 

without assets sufficient to provide all benefits. The Plan was 

only 40% 5 funded and was underfunded by more than $5 million. 

Consequently, under the pension law ERISA, PBGC became the Plan's 

statutory trustee on June 3, 2008. PBGC guarantees pension benefits 

as provided in a pension plan or otherwise required by ERISA, 

subj ect to legal limits. PBGC is guaranteeing your full Plan 

benefit. 

After PBGC became the Plan's trustee, PBGC has continued 

paying you the same $509.77 J&2/3S annuity that you were receiving. 

PBGC's Determination and Your Appeal 

On May 7, 2010, PBGC determined you are entitled to the same 

$509.77 amount that Plan administrators had estimated in early 

I 1 2006 . You appealed on May 26, 2010. You claim the $509.77 

amount you have been receiving is only an estimate. You explain 

RPC's bankruptcy prevented you from receiving your "Company Match." 

You ask that your benefit be recalculated using a value of $0 for 

your Company Match. 

Discussion 

New Determination Must Use a New S&RP Value On October 31r 2006 

We agree the $509.77 amount of your current payments was an 

estimate. We found: 

• "Company Match" is a term used to describe an S&RP account 

that held RPC's contributions to the S&RP . 

• Plan worksheets that are dated October 3, 2006 and underlie 

your $509.77 calculation state: "Payments subject to change as 

Company Match amount becomes available on 12/1/2006." 6 

• PBGC's Actuarial Case Memo states, "the prior administrator 

put participants into pay using estimated S&RP account 

4 On October 3~ 2006, Plan administrators calculated your benefit would 

provide $557.85 per month if paid as a Straight Life Annuity startingl I 

2006. See Enclosure 1 to this letter. The $557.85 amount is actuarially 

equivalent to your current $509.77 {$557.85 x 0.9138 J&2/3Sj payments. 

5 $14,106,236 assets 7 ($14,106,236 + $20,740,408 unfunded benefits) 

6 See Enclosure 1 and footnote 4. 
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balances and updated the benefit amount once the revised 

account balances were available." 7 

• The Plan requires your S&RP reduction to be determined as of 

the next "accounting date" following your "settlement date." 8 

Also, 

(i) Your "settlement date" is your I 2006 '----------­

retirement date (because your employment ended on 

"-----______---"1 2006, after you reached age 62) 9 

(ii) Your next accounting date was' the ~I_____~I 2006 

"regular accounting date." 10 

For these reason~, we decided PBGe must redetermine your benefit 

after correcting the RPC share price required for valuing your SRP 

account on October 31, 2006. 

$509.77 Payment Will Increase After Correcting RPC Values In S&RP 

,-----_____=P'-'B=--G~C___=h-",as already decided the correct value of RPC shares on 

'-----_____~12006 is $0. 11 By correcting your S&RP reduction to use 

the same RPC share price PBGC is using for others ($0), your S&RP 

reduction ($903.81) will be largely diminished. Therefore, your 

$509.77 estimated benefit-amount will substantially increase. 

7 From section 3 page 4 of the Actuarial Case Memo dated January 29, 2010. 

8 The S&RP reduction is determined "as of the accounting date coincident 

with or next following the participant's settlement date," under Plan § 4.5(a). 

See Enclosure 2 page 12. 

9 For a non-disabled participant whose employment ended before age 62, the 

Settlement Date is the date employment terminated. For a participant whose 

employment ended on or after age 62, ~he Settlement Date is the retirement date. 

See Section 4.1 of the ESOP document, Enclosure 3 page 11. The Settlement Date 

is described the same way in Section 5.1 of the S&RP document amended and 

restated November 1, 1989. 

10 Under section 5.3 of the ESOP, on page 14 of Enclosure 3: (i) The 

"regular accounting date" is defined to be the last day of a plan year, and (ii) 

"Special accounting" dates were possible if established by a management committee 

appointed by RPC management. The "committee" is defined in section 11.1, on page 

46 of Enclosure 3. 

The regular accounting date following your retirement is October 31, 2006, 

the end of the Plan year in which you retired. 

11 RPC officials formally valued RPC shares as of October 29, 2006, the end 

of Rockford's fiscal year, following Section 6.8 of the S&RP document. The 

October 29, 2006 valuation date and the October 31, 2006 regular accounting date 

are sometimes used interchangeably. Regardless of which date better describes the 

October 2006 regular accounting date (October 29 or October 31), PBGC has already 

decided the RPC share price on that regular accounting date is $0. 
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ESOP Reduction Based On Value Preceding October 1, 2006 

The ESOP reduction is based on: 

(i) a participant's RPC shares in the ESOP, and 

(ii) RPC-share values on the accounting date "immediately 

preceding" his settlement date. 12 

Therefore, your ESOP reduction is based on your ESOP account's 

value on the accounting date immediately preceding your I~____~I 

2006 settlement date. 

We Cannot Change Your $33.15 ESOP Reduction 

The RPC share price ($7.90) on the October 31, 2005 regular 

accounting was not changed on any accounting date= (reg1..).lar or 

special) preceding 1 1 2006. 13 Thus, on 1 1 2006 ,

your ESOP value had been not affected on any accountlng date by the 

decline in the RPC share price (to $0) that PBGC decided to use as 

of the October 31, 2006 regular accounting date. Therefore, we 

found no basis for changing the $33.15 ESOP reduction that Plan 

administrators calculated for you on I I 2006. 

Decision 

Having applied Plan provisions to the facts in your case, we 

decided PBGC must use the actual value of your S&RP account on 

October 31, 2006 to determine your Plan benefit. PBGC has already 

decided for other Plan participants that the value of RPC stock 

(such as was held in your S&RP account) was $0 on October 31, 2006. 

Therefore, your current $509.77 payments will be substantially 

increased when your S&RP reduction is redetermined. 

PBGC will redetermine your benefit amount in accordance with 

this decision. Your new determination will include a new 45-day 

right to appeal. When PBGC's new determination becomes final, you 

may, if you wish, seek u.S. District Court review of this decision 

with respect to the issues you have raised. 

12 The ESOP reduction is determined "as of the accounting date coincident 

with or immediately preceding the participant's settlement date," under Plan § 

4.S(b). See Enclosure 2 page 12. 

13 Instead, the $7.90 share price was used as late as September 13, 2006, 

the end of an "open window" period when terminated employees could redeem their 

ESOP shares. The "open windows" are explained in the Appendix to this letter. 

PBGC's records show your ESOP account held I I shares of RPC stock 

on October 31, 2006. The ESOP reduction used for your current payments is based 

on I I shares ($7,971.30 ESOP value -;- $7.90 share price). See footnote 3. 
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Thank you for your patience while we carefully reviewed your 

May 26, 2010 appeal. If you have questions about your new 

determination, please contact PBGC's Authorized Plan Representative 

at 1-800-400-7242. 

Sincerely, 

William D. Ellis 

Appeals Boaid Member