You are here

Rouge Steel Retirement Plans General FAQ

As PBGC continues to process these plans and more information becomes available, we will continue to update this page.

PLAN FACTS

In 2010, PBGC became trustee of four defined-benefit pension plans sponsored by Rouge Steel. Two pension plans cover members of the United Auto Workers (UAW): the UAW Past Service Plan and UAW Plan.  Two plans cover Rouge Steel salaried employees: the Salaried Past Service Plan and the Salaried Plan. The Date of Plan Termination (DOPT) of all four plans is October 31, 2005. 

The Rouge Steel Retirement Plans Facts:

 

UAW Past

Service Plan

UAW

Plan

Salaried Past

Service Plan

Salaried Plan

TOTAL

Date of Plan Termination DOPT

10/31/2005

Date of Plan Trusteeship DOTR

08/25/2010

01/21/2010

 

Number of Participants

600

3,700

270

1,030

4,730¹

Current Payees

500

2,200

180

630

2,830

Plan Assets at DOPT

$18 M

$82 M

$9.6 M

$30 M

$140 M

Plan Benefit Liabilities at DOPT

$43 M

$218 M

$11.8 M

$66 M

$339 M

Termination Benefits Liabilities (PBGC Benefits) at DOPT

$35 M

$195 M

$11.5 M

$62 M

$304 M

¹Most participants in the Past Service Plans are also in the UAW and Salaried Plans

PLAN PROCESSING

What is the status of PBGC’s processing of the Rouge Steel retirement plans?

PBGC has completed all the steps needed to calculate final benefits in the UAW Past Service Plan and will begin issuing benefit determinations to participants in June 2018. PBGC is finishing these steps for the other three plans and will send benefit determinations in these plans later in 2018.

BENEFIT DETERMINATIONS

When can I expect to get my benefit determination?

PBGC will send benefit determinations to participants in the UAW Past Service Plan starting in June 2018. Benefit determinations in the other three plans will be mailed later in 2018 after the final benefits have been determined.  Some complex situations, such as a participant having a Qualified Domestic Relations Order (QDRO), take more time and individual attention. These letters will be mailed toward the end of 2018

I am a participant in two Rouge Steel plans. Will I receive one benefit determination or two?

PBGC will mail you a separate benefit determination for each plan in which you are a participant

What will be included in my benefit determination?

All participants in the Rouge Steel plans will receive a benefit determination letter and a brochure explaining their appeal rights.

Most participants will also receive a benefit determination statement and worksheet showing how we determined their benefit amount. Individuals whose benefits started before PBGC became trustee whose benefit amount payable by PBGC remains unchanged from the amount calculated by the prior plan administrator will not receive a benefit determination statement or worksheet.

If you have received more money than PBGC is legally allowed to pay you, we will also enclose a recoupment summary. Recoupment is PBGC’s process for collecting overpayments. Through recoupment, we must reduce your monthly benefit, generally by no more than 10%, to collect past overpayments. The recoupment summary will state the monthly reduction for recoupment and the number of months it will be in effect.

If you have been underpaid, we will enclose a back payment summary that tells you the amount owed to you, including interest.

For more information on how PBGC determines overpayments and underpayments, please see those sections below.

I was overpaid in one Rouge Steel plan but underpaid in the other. Will you pay me one amount that represents the net value of the overpayment and underpayment? Or, will you handle these amounts separately?

Generally, PBGC calculates overpayments and underpayments separately for each plan.

This helps participants. If you have been underpaid in one plan, we will pay you the entire amount with interest right away. If you have an overpayment in the other plan, you will not have to pay it back all at once. Instead, we will deduct a small amount from your payment each month. The monthly deduction is calculated to stretch out the repayment period over a lifetime, but it ends if the overpayment without interest has been repaid.

There is one exception to this policy. If your overpayment and underpayment occurred because one plan paid you a benefit owed by the other plan, we will calculate the net of your overpayments and underpayments from both plans. If the net result is an underpayment, we will pay you right away with interest; if an overpayment, we will deduct a small amount from your future monthly payments.

How long do I have to file an appeal of my benefit determination?

If you disagree with PBGC’s determination, you may appeal within 45 days of the date on your benefit determination letter. The brochure, Your Right to Appeal, included with your benefit determination letter provides information. If you need an extension of the appeal period, we must receive your request within 45 days of the date on your benefit determination letter.

I believe that I’m entitled to a benefit from both Rouge Steel UAW plans.  Before I decide whether to appeal, I need to see my benefit determinations from both plans. The problem is, I won’t receive them at the same time, and there’s a 45-day deadline on appeals. Should I just go ahead and file an appeal after I receive my first benefit determination?

No. Instead of filing an appeal right away, you can ask for an extension of time to file an appeal.

The PBGC Appeals Board understands that you want complete information about both plan benefits before you decide whether to appeal. So, no later than 45 days after the date on your first Rouge Steel benefit determination letter, contact the Appeals Board in writing and ask for an extension. Be sure to tell the Appeals Board that you have a benefit from both plans and want to see both benefit determinations before you appeal.  With the extension, you can appeal both benefits up to 45 days after the date of your second Rouge Steel benefit determination letter from PBGC.

The Your Right to Appeal brochure included with your first Rouge Steel benefit determination has more information on how to ask the Appeals Board for an extension of time to file an appeal.

Why does it take so long to issue the benefit determinations?

The Rouge Steel Plans are large and highly complex plans. To determine benefits, PBGC must collect and validate data about each participant; determine and value the plan's assets; value amounts recovered in bankruptcy; calculate the plan benefits; and apply the complex legal limits of ERISA to each benefit. This process takes a great deal of time. PBGC works carefully to ensure participants receive all the benefits they are entitled to.

While we work to determine benefits, we pay estimated benefits so that retirees don't experience any interruption in their payments, and individuals approaching retirement can begin payments when they are ready.

EFFECT OF THE LEGAL LIMITS

What legal limits apply to my benefit?

In general, there are three legal limits that most commonly apply to participants’ benefits. One is called the “accrued-at-normal” limit. In the Rouge plans, the accrued-at-normal limit affects the most participants. The three legal limits are: 

Accrued-at-Normal Limit

Some pension plans, such as Rouge Steel’s, feature a temporary supplement to bridge the gap between early retirement age and Social Security retirement age. Most supplements are not fully guaranteed because PBGC cannot pay more than you would have received if you had retired at the normal retirement age in the normal benefit form. Since the Rouge Steel plans paid supplements during early retirement, participants who received the supplement are likely to be affected by this limit.

Maximum Guarantee Limit

This is a flat dollar amount based on the year your plan terminated, your age when you begin receiving benefits from PBGC, and the form of your benefit.

For 2005 terminations, the maximum guarantee is $3,801 per month ($45,612 per year) for a benefit that is payable at age 65 and does not include a survivor benefit. The guarantee amount is lower if PBGC payments start before age 65, or if you select a form of benefit that provides for survivor payments. For certain disability benefits the maximum guarantee is not reduced for PBGC payments starting before 65. You can find more information about the maximum guarantee payable at other ages and in other types of annuity.

Phase-In Limit

PBGC does not fully guarantee benefit increases that took effect within five years of the plan termination date, October 31, 2005. A few participants in the UAW Past Service and UAW plans are affected by this limit.

How did PBGC’s legal limits affect people in my pension plan?

In the UAW Past Service Plan, the benefits of about 60% of participants are reduced by PBGC’s legal limits. In the UAW Plan, about 25% of participants have reductions because of the legal limits.

Most of these individuals are affected by the limit on PBGC’s guarantee of temporary supplements (the accrued-at-normal limit).

Has PBGC adjusted benefits for retirees affected by PBGC's legal limits?

Yes, for most participants. When PBGC takes over as trustee of a plan, we adjust benefits as soon as practicable for retirees receiving more than the legal limits. These are considered estimated benefits because we do not yet have all the data and plan information to determine final benefits so soon after termination.

PLAN ASSETS AND RECOVERIES

How do the assets in the UAW and UAW Past Service plans affect the amount PBGC can pay?

Some participants in the UAW and UAW Past Service plans will receive benefits that exceed the legal guarantee limits discussed above. This is because the plan has enough assets to fund benefits above the guarantee, and PBGC recovered additional funds from the plan sponsor through bankruptcy proceedings. Under ERISA rules, these assets are allocated first to participants who made employee contributions and second to those participants who were retired or could have retired at least three years prior to the date of plan termination. 

PARTICIPANTS NOT YET RECEIVING BENEFITS

How soon can I start receiving my benefits?

As soon as you are eligible to retire, you can choose when to begin your benefit. Your benefit determination statement will include information on when you can begin receiving your benefit. The date you can start receiving benefits depends on the retirement types you are eligible to receive.

What do you mean by retirement types?

“Retirement types” refer to the options for retirement available to employees, according to age, service and other criteria. The Rouge Steel plans offered various options, described below:   
Normal Retirement - Age 65 and older. Any participant can retire at age 65.

Deferred Vested Retirement - Any participant who earned at least five years of service before the plan terminated on October 31, 2005, can retire as early as age 55. If you begin receiving benefits before age 65, your benefits will be reduced for early retirement.

(Note: Most participants who have not yet retired are eligible only for the two retirement types above.)

30-Year Retirement– If you had at least 30 years of service with Rouge before October 31, 2005, you can retire immediately at any age.

Rule-of-85 Retirement – If, as of October 31, 2005, your age plus your years of service with Rouge totaled 85 or more, you can retire immediately at any age.

Regular Early Retirement – If you worked for Rouge Steel until age 55 and had 10 or more years of service as of October 31, 2005, you can retire immediately at any age.

If you retire before age 62 under the 30-Year, Rule-of-85, or Regular Early Retirement types, your benefit will be reduced for early retirement; however, with the 30-Year and Rule-of-85 retirement types, the reduction only applies until age 62, at which point your benefit increases to the amount of your Normal Retirement benefit.

The 30-Year, Rule-of-85, and Regular Early Retirement types may also include a supplement that is payable until you become eligible for 80% of your unreduced Social Security benefit. (This is age 63 for participants born between 1943 and 1954). Due to legal limits on PBGC’s guarantee, as explained above, PBGC may be able to pay only some of the supplement.  

Can I receive my benefit as a lump sum?

Only if your benefit was small. If the total value of your benefit is $5,000 or less, you can take it as a lump sum. Otherwise, PBGC will pay you an annuity for the rest of your life.

Will you pay me interest on my lump-sum payment?

Yes. If you are owed a lump-sum payment, we will pay you interest from the date of plan termination to the date of payment.

If I can’t take a lump sum, what kind of annuity can I receive?

PBGC offers a variety of annuity types that provide payments to you and your designated beneficiary. When you are ready to start your benefit, we will send you information about the annuities available to you and the amount you would receive from each one.

Under the rules of UAW and UAW Past Service plans, married participants are required to take their benefit as a joint-and-65% survivor annuity unless they obtain the written consent of their spouse. 

Your annuity choice is irrevocable, that is, it stays in effect for the rest of your life. For example, if you choose to receive your benefits in the form of a joint-and-65% survivor annuity, PBGC cannot allow a change in the survivor you designated at retirement to receive payments continuing after your death.  In the event of a divorce, limited changes can be made, but only under the terms of a Qualified Domestic Relations Order.

If I die before starting my benefit, will my spouse get a benefit?

Yes. If you die before you start your benefit, PBGC will pay your spouse a monthly amount equal to the survivor portion of a joint-and-65% survivor annuity. This survivor benefit is payable on the first day of the month following the later of the participant’s 55th birthday or the participant’s date of death.

I received my benefit determination and found out that I was underpaid. Why was I underpaid?

When PBGC takes over a pension plan, we work to avoid any interruption in benefit payments to retirees. Because we don’t have complete information to determine final benefit amounts, we pay retirees on an estimated basis. We strive to make our estimates as accurate as possible. In some cases, retirees are underpaid because our estimate is less than the amount they were entitled to receive.

If I was underpaid, will you refund my money?

Yes. If you have been underpaid, we will send you a single back payment with interest to make up the difference between what we paid and what you were entitled to receive.

I was underpaid and am owed a back payment. What do I need to do to get my payment?

If your back payment is less than $5,000 and less than three times your monthly benefit, PBGC will make the payment automatically.

If your back payment is $5,000 or more and at least three times the amount of your monthly benefit, you will need to apply for your back payment. In that case, your benefit determination will include an Application for Lump-Sum Payment.

My back payment is more than $5,000 and more than three times my monthly benefit. Why must I apply to receive my back payment?

If your back payment is $5,000 or more and at least three times the amount of your monthly benefit, you have the option of rolling the payment over into an Individual Retirement Account or another qualified retirement plan. This decision has important tax consequences. The application gives you the opportunity to choose to receive your back payment directly or roll it over, and it provides information to help you make an informed decision.

How do you determine the amount of my total underpayment?

For each month that PBGC paid you estimated benefits, we look at the difference between what you were entitled to receive and what you actually received to determine whether you were overpaid or underpaid in that month. PBGC then sums up all the monthly underpayments or overpayments to calculate the total net underpayment.

Will you pay interest on my underpayment?

Yes. PBGC pays interest on all underpayments.

If I appeal my benefit, will I still get my one-time back payment for my underpayment?

Yes. You will still receive a back payment for your underpayment even if you appeal your benefit. We will not delay the payment while your appeal is pending.

What happens once the appeal is decided?

Once the Appeals Board has issued its decision, we will recalculate any overpayment or underpayment you have received based on your final monthly benefit (as determined by the Appeals Board) and all payments you have received as of that date. If you have been underpaid, we will issue you another back payment.

I received my benefit determination and found out that I was overpaid. Why was I overpaid?

When PBGC takes over a pension plan, we work to avoid any interruption in benefit payments to retirees. PBGC initially keeps paying the benefit amount promised by the plan. Once we have sufficient information, we adjust benefits to an estimate of the amount that PBGC can legally pay. For the Rouge plans, PBGC made most of these adjustments in the first year after we became the trustee for your pension plan. Most overpayments occurred during the period before PBGC was able to adjust benefits to the estimated amounts. 

Even when PBGC adjusts benefits, they are still estimated benefits until we determine the final benefit amounts that we’re legally allowed to pay. Because these are estimated payments, some individuals may receive additional overpayments or underpayments until their final benefits are determined.
 

If I understand correctly, most of the overpayments were made shortly after PBGC took over the plan. Why are you just now letting me know of the overpayment?

PBGC determines your total overpayment or underpayment by comparing what you were paid to what you are entitled to receive. We can make this calculation only after we have determined the benefit you are entitled to receive.

I was overpaid. How will PBGC collect the overpayment? Will I have to pay the money back all at once?

No. You will not have to repay the overpayment all at once. To reduce the burden on participants and beneficiaries, PBGC collects overpayments by recoupment. This means that we collect the amount you have been overpaid by reducing your monthly benefit by a percentage called the recoupment percentage. Recoupment is designed to spread the reduction over the expected duration of the benefit (including payments to your beneficiary, if any). Once the overpayment has been repaid, we stop the reduction for recoupment.

Generally, we limit the recoupment percentage to no more than 10% of your monthly benefit.

The recoupment summary will state the monthly reduction for recoupment and the number of months it will be in effect.

If my benefit changes in the future, will the recoupment reduction continue to apply?

Yes. If your benefit changes in the future, this same recoupment percentage will be applied to that benefit until the overpayment has been repaid. For example, say you are receiving a supplement that is payable until age 62 and one month, and that your benefit equals $2,500 before age 62 and one month and $2,000 thereafter.

Also, say that your recoupment percentage equals 2% of your benefit amount.

Your benefit before age 62 and one month with the recoupment percentage applied is $2,450, determined as follows:

Monthly Benefit until age 62 and one month: $2,500 (before recoupment)
Recoupment amount = $2,500 x 2% = $50
Monthly Benefit until age 62 and one month: $2,500 - $50 = $2,450

Your benefit after age 62 and one month with the recoupment percentage applied is $1,960, determined as follows:

Monthly Benefit after age 62 and one month: $2,000 (before recoupment)
Recoupment amount = $2,000 x 2% = $40
Monthly Benefit after age 62 and one month: $2,000 - $40 = $1,960

If I die before my beneficiary, will payments to my survivor also be reduced for recoupment?

Yes. The same recoupment percentage will apply to the payments to your survivor until the overpayment has been repaid. However, when no monthly pension payments remain for the participant or any beneficiaries, PBGC’s recoupment action ends, even if the overpayment has not been fully repaid.

How do you determine the amount of my overpayment?

For each month that PBGC paid you estimated benefits, we look at the difference between what you were entitled to receive and what you actually received. We then determine whether you were overpaid or underpaid in that month. PBGC then sums up all the monthly underpayments and overpayments month by month.

The result is the net overpayment or underpayment. In performing this determination, PBGC does not charge interest on overpayments, but it does pay interest for any month in which your over/underpayment balance is a net underpayment.

Will PBGC charge interest on my overpayment?

No. PBGC does not charge interest on overpayments.

I was overpaid initially. However, when PBGC adjusted my benefit to the estimated amount, that amount was lower than what I am entitled to receive as shown in my benefit determination. Will those underpayments be taken into consideration when you determine my overpayment?

Yes. Please refer to the question above on how PBGC determines the amount of your overpayment. We take into account all underpayments when we determine the amount of your overpayment.

I plan to appeal my benefit determination. Will my benefit be reduced for recoupment while you are considering my appeal?

No. If you appeal, PBGC will not reduce your benefit and we will not apply recoupment for prior overpayments until the appeal is decided. If the Appeals Board determines you are entitled to less than the amount that you were paid, any amounts that exceeded your entitlement during the appeal period will be included in your total overpayment.

My benefit determination says that I have been overpaid due to payments in the past, but it also says that I am entitled to a benefit that is greater than my current estimated benefit. If I appeal, will you still increase my benefit?

Yes. In some cases, PBGC has determined that participants have been overpaid based on past payments, but also that they are entitled to more than the estimated benefit they are currently receiving.

If this happens, PBGC will increase your benefit to the amount you are entitled to receive, even if you file an appeal. We will not apply recoupment until the appeal is decided. Once the appeal is decided, we will apply recoupment if there is an overpayment.

What happens once the appeal is decided?

Once the Appeals Board has issued its decision, we will recalculate any overpayment or underpayment you have received based on your final monthly benefit (as determined by the Appeals Board). All payments you have received as of the date of the Appeals Board determination will be included in the recalculation.

If you have been overpaid, we will start reducing your monthly benefit to recoup the overpayment at that time.