Pension Benefit Guaranty Corporation 

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

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Re: ----------------------- Weirton Retirement Program, PBGC Case # 1976 14 

Dear ----------------

The Appeals Board has reviewed your appeal of PBGC7s September 20, 2005 

determination of your benefit under the Weirton Retirement Program. For the reasons explained 

below, the Board found no basis presented for changing PBGC7s determination. 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 1 1, 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 1 1, 

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

("Weirton Plan"), PBGC Case #201 097. As part of the 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 Income Security Act (ERISA). 

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

multiplied by a factor equal to your years of service as of May 1, 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 determination of your benefit under the National Plan only. You 

will receive a separate determination, including appeal rights, of your benefit under the Weirton 

Plan at a later date. (The files show that PBGC 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 Determination, Your Appeal and Related Correspondence 

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

of $172.27 per month as a Straight Life Annuity if payments begin on May --2020, your normal 

retirement date. The letter enclosed a benefit statement which shows how your National Plan 

benefit was calculated and the data used in the calculation, including; (1) October --- 1973 as 

your Continuous Service Start Date; (2) February --- 1974 as your Continuous Service Start 

Date Adjusted for Breaks in Service after May 1, 1983; (3) you had 28.83 Total Years of 

Credited Service (or benefit service); and (4) as of May 1, 1983, you had 9.58 Years of Credited 

Service with National. 

In your October 1 1,2005 letter of appeal, you said that the adjustment ofyour continuous 

service date is incorrect because you did not experience a break in service under the National 

Plan. You stated: 

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

(19) ("Service and Related Terms"); Part 2, Section I1 ("Eligibility for Pension"); and Part 2, 

Section I11 ("Amount of Pension"). 

21998 Document, Part 1, Section I, (7) and (8). 
"Under the National Plan, a break in service occurs if a layoff lasts for more than 

two years. The Weirton Steel Plan states that individuals who were laid off from 

National Steel prior to May 1, 1983, and who were laid off on the effective date 

of the transfer of assets from National Steel to Weirton Steel (January 1 1, 1984) 

are covered under the National Steel Plan until the earlier of two years after layoff 

or return to work. 

I was laid off from National Steel, was on lay-- f on January ---- 1984, and began 

working for Weirton Steel on February ---- 1984. My coverage under the 

National Steel Plan therefore ended two years or less after the date of layoff. A 

break in service occurs under the National Plan if the layoff is more than two 

years. For this reason, my continuous service start date should not be adjusted for 

a break in service." 

At the request of the Appeals Board, an authorized Plan representative for PBGC's 

Benefits Administration and Payment Department (BAPD) responded to your October 1 1,2005 

letter. BAPD's November 16, 2005 response stated that an arbitration decision between the 

union and Weirton, the 1989 Consent Decree, allowed a specific group of employees to bridge 

their credited service and you were not in this group of employees. Therefore, your credited 

service will not be bridged, i.e., your adjusted continuous service date will not change. BAPD 

explained that in calculating your benefit under the National Plan, your service as of May 1, 

1983 must first be calculated and then your service as of the earlier of the date your employment 

ended and the date the Plan terminated. BAPD also gave you 30 days to provide the Appeals 

Board with specific reasons if you still believed PBGC's determination to be incorrect. 

In your December 15, 2005 letter to the Appeals Board, you stated that the adjustment 

of your pension time does not involve any matters concerning the Weirton Consent Decree. You 

again asserted that you did not experience a break in service under the National Plan and, 

therefore, your continuous service start date should not have been adjusted. 

Discussion 

When PBGC becomes the trustee of a terminated pension plan, PBGC pays benefits to 

the participants according to the terms 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 October ---1973; you were laid off on October ---- 198 1 

and returned February --- 1984, for a period of absence of two years, four months and six days; 

and, you were actively employed with Weirton when the National Plan terminated on 

December 6,2002. 
For individuals, 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 Servi~e."~ 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 normally 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 be creditable as Continuous Service 

... 5 

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 Wher note that, with respect 

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 

companies. 

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

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

February --- 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 --- t only 

your first two years of your layoffperiod (i.e., from October ---- 198 1 through October ---- 1983) 

would count.6 

1998 Document, Part 1, Section I (1 9)(d). 

4 1998 Document, Part 1, Section I (1 3) (definitions of "National," "Weirton, and 

"Company"; Section I (1 9)(d) (definition of "Continuous Service"). 

'1 998 Document, Part 1, Section I, (1 9)(d)(l) [emphasis added]. 

61 998 Document, Part I, Section I, (1 9)(d)(l). 
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. 

Therefore, for you, the National Plan's administrators used a February ---- 1974 adjusted date 

of hire, which is four months and six days after your actual date of hire (October --1973). 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 PBGC regulations, participants do not receive pension credit for 

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

plan terminated (ERISA 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 (February ---- 1974) to the 

date the National Plan terminated (December 6,2002). As PBGC determined, this is equal to 

28 years and 10 months, or 28.83 years. 

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

formulas, with the Minimum Pension Formula providing you with the largest benefit amount. 

The National Plan, however, provides that this benefit amount (shown as $525.27 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 1, 1983, and 

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

Weirt~n.~ 

As previously noted, you did not experience a break in Continuous Service until 

October -----1983, which was two years after your layoff date. As a result, in determining your 

service with National up to May 1, 1983, there was no need to adjust your date of hire. Thus, 

as shown on the Benefit Statement, you receive full credit -- r the entire nine years and seven 

months, or 9.58 years, from October ---1973 through April ---, 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."' In determining your benefit, the denominator of 

the Pro-Ration Factor is 28 years and 10 months, or 28.83 years (see discussion above). The 

Pro-Ration Factor, therefore, is equal to 9.58 years divided by 28.83 years, or 0.332293, which 

is what PBGC calculated. 

7 1998 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 1, Section I 

@)(a) as "May 1, 1983 ." 

1 998 Document, Part I, Section I ( 1 9)(b). 
Your appeal states that PBGC should not adjust your Continuous Service because your 

"coverage under the National Steel Plan ended two years or less after the date of my layoff." 

However, 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 to change 

how PBGC determined your service under the National Plan. 

As noted earlier, 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. 

Decision 

Having applied the terms of the Plan, the provisions of ERISA and PBGC regulations to 

the facts in this case, the Appeals Board found no basis presented for changing PBGC7s 

September 20,2005 determination. 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. 

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

Sincerely, 

Sherline M. Brickus 

Member, Appeals Board