A Pension Benefit Guaranty Corporation FmE 1200 K Street. N.W., Washington, D.C. 20005-4026 

Re: Appeals Retirement Plan for Employees of P*I*E Nationwide, Inc. 

("Nationwide Plan") 

Dear 

The Appeals Board has reviewed your appeal of PBGC's October 9, 2001 corrected 

determination of your benefit under the Nationwide Plan. As explained below, the Board changed 

PBGC's determination by finding that your actual retirement date is April 1, 1999, instead of 

June 1, 1999. As a result, the Board found that you are entitled to a benefit of $540.86 per month 

as a Single Life Annuity with no survivor benefit (SLA), beginning April 1, 1999. 

PBGC's fust determination (dated April 17, 1998, sent to the wrong address and remailed 

March 3, 1999) said that you are entitled to a monthly benefit of $650.02. if payments begin on 

April 1, 2001, the first of the month following your 65th biiday, as an SLA, or to a lower 

amount if payments begin earlier or are in a different form. PBGC included a benefit statement 

with the information PBGC used to calculate your monthly benefit. 

On April 23, 1999, you filed a timely appeal concerning the date of Plan termination, the 

length of time the Plan was "in effect" and the content of PBGC's benefit statement. On 

September 30, 1999, I wrote you (copy enclosed) explaining (1) that the Appeals Board has no 

authority to change an established plan termination date, (2) the statutory "phase-in" limitation 

under section 4022(b)(1) of the Employee Retirement Income Security Act (ERISA), (3) the 

statutory rule for determining how long a new plan or plan amendment is "in effect," (4) that 

PBGC subsequently determined the Nationwide Plan is a "successor plan" under ERISA section 

4022@)(2), and (5) that, as a result of this successor plan determinahon, PBGC agreed to issue 

you a new benefit determination. 

PBGC's files show that you elected to begin receiving your Nationwide benefit as an SLA, 

effective April 1, 1999. On June 1, 1999, PBGC began paying you $611.02 per month on an 

estimated basis and sent you a check for $1,229.69 to cover the April and May payments plus 

interest. PBCC has continued to pay your $611.02 per month estimated benefit. 
PBGC's October 9, 2001 corrected determi~tion said that your aciual PBGC-payable 

benefit is $548.53 per month. Because this is lower than the estimated benefit of $611.02 per 

month you are receiving, PBGC explained that you had a net overpayment balance (then equal to 

$3,104.39) that PBGC would recover by reducing your final monthly benefit by $44.60 until the 

overpayment without interest is repaid. PBGC also included a benefit statement with this letter. 

Your December 1,2001 appeal of PBGC's 2001 determination raised two issues. First, 

you said that, if you assume the revised benefit amount is correct, the overpayment amount should 

be $1,999.68 ($62.49 times 32 months), instead of $3,104. You believe the error may involve 

the retroactive payment of your first two months' pension. Second, you noted that the former 

Plan Administrator told you when your employment ended that your aged5 Nationwide benefit 

would be $815.52 per month as an SLA. You relied on this information when you elected your 

prior Ryder/P*I*E benefit in a form that significantly reduced the monthly payment, and would 

not have made this choice had you known the corrected Nationwide benefit amount. Because of 

these circumstances, the fact that the prior RyderlP*I*E benefit is a fully paid-up annuity and the 

fact that you have been ill, you asked PBGC to restore your Nationwide benefit amount. 

When the estimated benefits a participant has received are more than the amounts the 

participant is entitled to receive under Title IV of the Employee Retirement Income Security Act 

(ERISA), PBGC must collect the difference. PBGC does this by reducing future monthly benefits 

(generally by not more than 10%) until the overpayment, without interest, is repaid. The Appeals 

Board cannot change this requirement. 

Your appeal questioned the calculation of the overpayment amount. PBGC's 2001 benefit 

determination assumed an actual retirement date of June 1, 1999 (see the Participant Data section 

of the 2001 benefit statement). PBGC reduced your age-65 Nationwide benefit by the early 

retirement factor that applies to a participant who retired 22 months early (.9450) instead of the 

factor for 24 months early (9400). Similarly, PBGC reduced the age-65 MGB to reflect a June 1, 

1999 start date. The MGB reduction factors are prescribed by regulation and differ from the 

Plan's early retirement factors. As you pointed out, PBGC then computed the overpayment 

amount assuming you were not entitled to any payments before June 1, 1999. 

The Board found, however, that your actual retirement date is April 1, 1999, as you said 

in your appeal. Thus, the overpayment for April and May of 1999 is the difference between the 

total amount PBGC paid you for those two months and the fnal April and May benefit amounts 

to which you are entitled under ERISA. Because your actual retirement date is two months earlier 

than the date PBGC used in its 2001 determination, your final benefit amount will be lower 

($540.86 instead of $548.53, as shown on the new benefit statement enclosed with this letrer). 

Please note also that the total overpayment amount described in PBGC's 2001 letter has grown 

because you continued to receive your estimated benefit of $611.02 while we reviewed your 

appeal. 
PBGC's files show that the Nationwide Plan terminated on March 11, 1991 without 

sufficient issets to provide all benefits PBGC guarantees under Title IV of ERISA. Because of 

legal limitations under ERISA and PBGC's regulations, the benefits PBGC can provide may be 

less than the benefits a pension plan would otherwise pay. PBGC's 1998 benefit statement 

explained that one of these legal limits, the phase-in limit, applied to you. As a result, PBGC 

could guarantee only the greater of 80% of your Nationwide Plan benefit or $80 per month. 

PBGC later found that the Nationwide Plan is a "successor plan" under ERISA and, consequently, 

the phase-in limit does not apply. 

However, a diierent legal lit, the "maximum guaranteed benefit" or MGB, now applies 

to your benefit. For plans that terminated in 1991, the MGB payable as an SLA starting at age 65 

is $2,250.00 per month. Because you began receiving your benefit before age 65, PBGC must 

reduce the MGB to account for the earlier stan date. Your MGB (based on your April 1, 1999 

retirement date) is $1,948.05, as shown on line 8 of the enclosed benefit statement. 

PBGC has consistently treated predecessor and successor plans as one plan for purposes 

of applying the MGB. Because the Nationwide Plan is a successor to the Ryder/P*I*E Plan, 

PBGC applied the MGB to your combined benefit under both Plans. As a result, PBGC 

determined your guaranteed benefit under the Nationwide Plan by subnacting your benefit under 

the RyderlP*I*E plan ($1,937.80 per month beginning on the same date and in the same form as 

your ati ion wide benefit) from your MGB. The res&, $20.50 per month, is shown on line 11 

of the enclosed benefit statement. 

You noted in your appeal that the former Plan Administrator calculated an age-65 SLA 

benefit for you of $815.52 per month. Please note that this is the same amount PBGC used before 

applying the ERISA limits 

Monthly Nationwide Plan benefit at age 65 = [Age-65 Nationwide benefit (line 5) minus age-65 Executive Life offset (horn line 10)J i 12 

= [$34,357.23 minus $24,606,961 i 12 

= $9,750.27 + 12 

= $815.52 per month. 

Section 4022(c) of ERISA authorizes PBGC to pay additional benefits (k, unfunded 

benefits that PBGC could not otherwise legally guarantee), based on amounts that PBGC recovers 

from sponsors of terminated, underfunded plans. PBGC determined that you are entitled to 

70.01 % of your unfunded nonguaranteed benefit under section 4022(c), or an additional $520.36 

per month (line items are from the enclosed benefit statement): 
Unfunded nonguaranteed Nationwide benefit = Total Nationwide benetit Oine 7) minus Executive Life offset (lie 10) 

minus Nationwide PBGC-guaranteed benefit (line 11) = $2,691.32 minus $1,927.55 minus $20.50 

= $743.27 

Section 4022(c) benefit = Unfunded nonguaranieed Nationwide benefit times 70.01 % 

= $743.27 times 70.01 % 

= $520.36 (line 13) 

Thus, your total monthly PBGC-payable benefit as an SLA beginning April 1, 1999 is $20.50 plus 

$520.36, or $540.86. (PBGC's 1998 determinations did not address section 4022(c) because at 

that time PBGC did not have all the information needed to compute 4022(c) benetits.) 

Having applied the law, the provisions of the Plan and PBGC policy to the facts in this 

case, the Appeals Board changed PBGC's determination by finding that your actual retirement 

date is April 1, 1999, instead of June 1, 1999. As a result, the Board found that you are entitled 

to a benefit of $540.86 per month as an SLA beginning April 1, 1999. This is the Agency's final 

'decision on this mattei and you may, if you wish, seek court review. 

We will forward a copy of this lener to PBGC's Insurance Operations Department, the 

organization responsible for determining and paying benefits. They will recompute your 

overpayment amount using the correct retirement date of April 1, 1999, and contact you directly 

concerning repayment. Meanwhile, if you have questions, please call PBGC's Customer Service 

Center at 1-80040-7242. 

Sincerely, 

Linda M. Mivi 

Member, Appeals Board 

Enclosures