Retirees' pensions slashed
Repayments also deducted from steelworkers' checks
Hundreds of retired steelworkers from the former Republic Technologies International are being notified their pensions will be cut, in some cases by as much as 75 percent, to less than $300 a month, due to new calculations by the federal agency that guarantees employer-paid pensions.
Some of the 3,300 retirees affected by the revisions are being told they must pay back tens of thousands of dollars in pension overpayments since Republic Technologies declared bankruptcy in June 2002. The Akron-based steelmaker's obligations were picked up by the Pension Benefit Guaranty Corp., which limits payouts according to rules set by Congress.
The agency is completing a detailed review of the workers' benefits, taking into account a 2004 court decision, and retirees are being notified by mail. They are scattered around the country, but many live in states where the company operated: Illinois, Indiana, Ohio, New York and Pennsylvania.
Most of the retirees are in their mid- to late 50s, according to union officials.
"Some people are being told they owe as much as $60,000, retirees on fixed incomes," said Michael Millsap, Northwest Indiana subdistrict director for the United Steelworkers union.
"I have never seen this before, where they've taken this long to do this for retirees. Every year that went by, these guys were getting older. If they'd done this in 2002 when these guys were younger, it would be one thing, but when you wait six years, what are they going to do?"
The repayments will be deducted at a rate of 10 percent of their monthly stipends. But many retirees lost much larger amounts when the pension agency canceled a $700 monthly supplement for younger retirees. The agency also denied pension benefits accrued at a Republic predecessor, LTV Corp., a decision the union plans to challenge, Millsap said.
Millsap said he has been getting three to five calls a day at the union's Gary office since retirees in Chicago and Northwest Indiana began getting letters about two weeks ago.
"I had a retiree in my office today; he put in 29 years" at the former LTV plant in South Chicago, Millsap said. "His pension went from $1,500 to $370, and they're going to deduct $37 per month because he has to pay back $25,000. He's 57, diabetic and can't work."
PBGC spokesman Jeffrey Speicher noted the agency is an insurance company operating under a contract set by Congress.
"We have to enforce it," he said, adding that agency staff is available to explain the changes to retirees. "We do the best we can to explain it, but there's really no explaining away the fact that these reductions do hurt."
U.S. Sen. Sherrod Brown (D-Ohio), in a letter this week to Senate colleagues, called on Congress to change the rules.
He cited an Ohio constituent, Richard Wyers, who was notified he owes $53,415.60. Wyers anticipated a monthly benefit of about $2,400 when he was working at the mill, but that was slashed to $1,088.27 when the PBGC assumed the plan.
"Now he is being told that he will get $325.19 minus a recoupment deduction of 10 percent, yielding $292.67 before taxes," Brown wrote.