LTV CORP. Recent retirees face pension reductions
A federal agency is taking over payments.
THE VINDICATOR, YOUNGSTOWN
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- LTV Corp. retirees will have their pensions taken over by a federal agency March 31.
Cleveland-based LTV, which is liquidating its operations, said Thursday that it expects the Pension Benefit Guaranty Corp. to take over its pension plans for 82,000 hourly and salaried retirees that day. LTV has about 6,000 retirees in the Mahoning and Shenango valleys.
Nearly all hourly workers who retired in 1999 or earlier will receive the same pension benefits as they have been. Those who retired more recently will see cuts in benefits, however, said Mike Rubicz, president of United Steelworkers of America Local 1375.
Rules: The cut comes because a pension increase negotiated in 2000 has been in effect for only one full year. Under PBGC rules, a pension increase must be in effect for five years for workers to receive the full increase.
Workers who retired under the new contract will receive the benefit level of the old plan, plus 20 percent of the increased benefits provided under the new plan.
That will represent a significant cut for recent retirees because the contract provided for a large increase in pension benefits.
The previous contract gave retirees with 30 years' service a pension of $1,050 a month.
The latest contract increased that to $1,575 a month.
Workers with more than 30 years saw an even larger increase because the contract included a higher reimbursement rate for each year worked beyond 30. Someone retiring with 40 years' service, for example, would receive $2,275 under the latest contract, compared with $1,400 under the previous contract.
Salaried workers: Rubicz said salaried workers had a different plan. Some of them will receive reduced benefits under the PBGC because their benefits exceeded the maximum amounts paid under its rules. The maximum benefit is $3,579 a month.
The PBGC has set up a special area on its Web site to answer questions about LTV pensions. The address is www.pbgc.gov. It also has a telephone information line for LTV retirees at (800) 707-7242.
The PBGC, which is funded by contributions from its pension plan participants, covers basic pension benefits only. Taking over LTV's plan will cost it more than $1 billion.
LTV said its 401K retirement savings plans will be terminated sometime this year, with money being disbursed to participants.
Rubicz said the PBGC takeover is another sign that the end is near for LTV, which stopped production at its steel-related plants in December. The company filed for bankruptcy protection a year earlier.
While the future of its Warren coke plants remains uncertain, LTV intends to auction steel mills in Cleveland and Indiana at the end of the month. It is trying to sell its tubular plants.