November 22, 2001
LTV workers fear for pensions, medical coverage
By PAUL M. KRAWZAK
Copley Washington correspondent
WASHINGTON — Active and retired workers from LTV Corp. would see reductions in their pension benefits in some cases, and the loss of health and life insurance if the steel maker shuts down operations.
“We (would) lose our medical benefits,” said Willie L. Moore, who retired from a steel plant previously owned by LTV in Canton. He is among more than 4,000 LTV retirees in the Stark County area.
The loss of benefits could be especially hard on those who have high prescription drug costs and who took early retirement, added Dave York, president of United Steelworkers of America Local 7367 in Hennepin, Ill., where LTV has a plant.
“It’s probably going to put some of them on welfare,” York said. For younger retirees who took early retirement, “the only chance that they’ve got is some of them are still in good enough health to find another job.”
If the company wins permission from a bankruptcy court in Youngstown to cease operations, 7,500 employees, most of them hourly workers, will lose their jobs. Another 52,000 retirees who draw pensions, health and life insurance benefits from the company would be affected.
The federal government guarantees pensions up to a certain level through the Pension Benefit Guaranty Corp., which would take control of the pension program if LTV closes.
The maximum monthly pension benefit paid by the government is less than the $4,000 a month that some LTV retirees collect, union officials said. If the government took over the LTV pension program before the end of the year, it would pay a maximum of $3,392 a month for retirees who are 65 or older in 2001.
Younger workers who took early retirement would draw reduced benefits from the government. Someone who joined the company at 18 and retired after 30 years of service could now be drawing a monthly pension of more than $3,000 from the company, York said. If the federal government takes over the program their benefit could fall to as low as $1,100 a month, he added.
The federal government does not guarantee pension supplements, including add-ons that are given to employees who worked in plants that were closed. Those supplemental benefits would be lost if the government took over the program.
Since the late 1980s, management and salaried employees of LTV have been in a “portable” pension plan that would not be affected by a liquidation, since the plan is under individual employees’ control, LTV spokesman Mark Tomasch said. But those salaried employees who were in the previous pension plan would see that plan taken over by the government in a liquidation, he said.
Retirees would lose company-paid health insurance and life insurance, which are not guaranteed by the government. That loss would be most noticeable to early retirees who do not yet qualify for Medicare health insurance or Social
Security payments. Retirees who are beyond the regular retirement age still would have Medicare while losing the supplemental coverage provided by the company’s insurance.
One scenario in which the pension plan might remain in private hands would be the purchase of LTV by another steel company.
“In the course of dealing with a potential buyer, the union would have the right to have a labor agreement with the buyer before the sale,” said David Jury, assistant general counsel for the Steelworkers. “We would bargain with the buyer and the question of assumption of liabilities would be one of a number of very significant issues.”
If this occurred, Jury believes that retirees would continue to draw benefits under the old plan. Future retirees would be under the new plan negotiated with the buyer, he said.
Since filing for Chapter 11 protection from bankruptcy Dec. 29, LTV has put together a restructuring plan with the aim of urviving. Earlier this week, company officials said the Steelworkers’ refusal to agree to sufficient wage cuts gave them no choice but to close and attempt to sell steel-making facilities.