4% Pension Benefit Guaranty Corporation Pwc YIL(*UI -*. 1200 K Street, N.W.. Washington. D.C. 20005-4026 

JUL 2 2 2004 

~e:l Tne Grand Union Company Associates' 

Retirement Plan ("Plan"), Case #I94132 

The Appeals Board reviewed your appeal of PBGC's September 3,2003 determination that 

you are not entitled to a benefit under the Plan. As explained below, the Board changed PBGC's 

determination by finding that you met the Plan's vesting requirement and you earned 3 years of 

credited service underthe Plan and, thus, you are entitled toa benefit. PBGC's Insurance Operations 

Department, the organization responsible for determining and paying benefits, will send you a new 

determination, with a new 45-day right of appeal. 

In various letters, PBGC notified you that PBGC had taken over the Plan.and that it would 

need information from you to help determine your eligibility for a Plan benefit, and asked you to 

complete and return PBGC's General Information form. AAer reviewing the information you 

provided and other information in PBGC's files, on September 3,2003 PBGC sent you its formal 

benefit determination, which stated you are not entitled to a benefit from PBGC because the Grand 

Union Plan "required you to have at least 5 years of service in order to qualify for a vested pension 

benefit. You had only 0.00 years of service as of the date the pian terminated, January I, 2001." 

In your October 7, 2003 letter of appeal, you said that you met the Plan's 5-year vesting 

requirement, and noted that your PBGC benefit statement shows you were employed with Grand 

Union for 7% years -- from July 19, 1993 to the Plan's January I, 2001 termination date. You stated 

that you worked at least 1,000 hours during at least 5 years of your employment with the Company, 

which was a requirement ofthe Plan for a vested right to a benefit. You further noted that while you 

did not work 1,500 or more hours in any year (to earn a full a year of credited service), you are 

entitled to % year of credited service for each of the years 1995 - 2000 (or 3 years of credited 

service) because you worked at least 1,000 hours during each of these years. To support your claim, 

you enclosed copies of your Grand Union W-2s for 1995 - 2000, pay stubs showing your hourly 

wages, and your detailed calculalion ofthe hours you worked based on your earnings. 
P 

kq 

b1 By letter dated December 2, 2003, PBGC's Insurance Operations Department("IODn) 

responded to your October 7,2003 appeal, stating that "you had 0 years of vesting service so you 8 are not entitled to.a benefit under the Plan." IOD's explanation said that: (1) a Plan participant 

3 receives !h year of service for 1,000 - 1,499 hours worked and a full year for working 1,500 or more 

hours in a year; (2) an employee is eligible to participate in the Plan on the January 1 or July I 

coinciding with or next following the date (i) he or she reaches age 20 %, (ii) has worked at least 6 

months, and (iii)customarily works 1,000hours ina year;and (3)you met thd'lan'sageand service 

requirements on January 1,1994; however, "you did not work enough hours in any year to gain even 

one year ofcredited service." IOD also said that, because the Plan's definition of compensation for 

pension purposes may not include all of your W-2 earnings, PBGC relied on the information it 

obtained from the prior Plan administrator (Grand Union). 10D also gave you 30 days to provide 

the Appeals Board with additional information if you still believed that your PBGC benefit 

determination is incorrect. 

In your December 3 1,2003 response, you maintain that you had enough hours under the 

terms of the Plan to be entitled' to a benefit. You stated that you did not receive any bonuses, - commissions, overtime pay or other non-pension earnings, except the $1 .OO per hour additional pay 

for working on Sunday, and asked that we provide you information~documentation on how Grand 

Union determined your hours worked. You later faxed some more of your Grand Union pay stubs. 

Discussion 

According to the records PBGC obtained from Grand Union, you were hired by the 

Company on July 19, 1993 when you were age 33, and you were employed on a part-time basis 

until the Plan terminated on January 1,2001. . 

PBGC and the Appeals Board determine benefit entitlement in accordance with the terms 

ofthe specificplan,the provkions oftheEmployee Retirement Income Security Act ("ERISAU),and 

PBGC regulations and policies. Section 2.2 of the Plan in effect when you were hired in 1993 . 

provides that an employee shall become a participant in the Plan as of the January 1 next following 

the later of the date on which. he becomes age 20 % and the date six months following the date as 

of which he became an Employee for purposes of the Plan. The Plan defines "Employee" or 

"Eligible Associate" as person employed at a regular rate of 1,000 hours per year or who 

accumulates 1,000 or more hours of employment during the first 1.2 months of employment or any 

calendar year alter the date of his or her tirst anniversary: "Hour of Service" is each hour which a 

person is directly or indirectly paid or entitled to payment by the Company for the performance of 

duties. 

In your appeal, you state that you did not work at least 1,000 hours in 1993 and 1994 and, 

therefore, you 'o not dispute that you are not entitled to pension credit for these two years. 

However, you disagree with Grand Union's records, and thus PBGC's findings, for the years 1995 - 

2000. 
Your VesrineService: Please note that under the terms of the Plan and ERISA provisions, 

a participant receives a full year of vesting sewice (used to determine benefit entitlement) for each 

calendar year during which he or she had at least 1,000 hours of service; no credit is given for fewer 

than 1,000 hours. According to the files, Grand Union repoked that you worked less than 1,000 

hours during each year of your employment with the Company. (We note that PBGC 

provided you with your hours and earnings obtained from Grand Union for these years, which you 

cite in your appeal; therefore, they are not repeated here.) However, after reviewing the provisions . 

of the Plan and the pay stubs and W-2's you submined, the Appeals Board concluded that you had 

at least 1,000 hours of service in each of the calendar years 1995 - 2000. Thus, you met the Plan's 

5-year vesting requirement. 

Your CredifedService: The Plan provides forthe following credited service (which is used 

to determine benefit amounts) : 

Hours ofservice Credited Service 

Less than 1,000 

1,000 - 1,499 

1,500 or more 

0 

% year 

full year 

Under the terms of the Plan, you became a~lan'participant on January 1,1996; however, you began 

accruing credited service on January I, 1995 (the first calendar year you worked 1,000 hours). You 

did not earn a full year of credited service in any. year because, consistent with your appeal, the 

. Board found that you did not have at least 1,500 hours of service during the year. Since the Board 

determined that you did work at least 1,000 hours each year 1995 - 2000; you earned 3 years of 

credited service (%year each year 1995 - 2000). 

Decision 

The Appeals Board changed PBGC's September 3,2003 determination by finding that you 

earned 3 years of credited service under the Plan and that you are fully vested in your accrued 

benefit: We wiil forward a copy of this letter to PBGC's Insurance Operations Department, who 

will send you a new determination, with a new 45-day right of appeal. Meanwhile,. if you have 

questions, please call PBGC's Customer Contact Center at 1-800-400-7242. 

Sincerely, 

, Sherline M. Brickus I . .; . -- . : .j 

Member, AppealsBoard