Control of National Steel Pension Sought
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WASHINGTON (AP) _ The government’s pension insurance program is seeking control of seven underfunded National Steel Corp. retirement plans covering more than 35,000 workers and retirees. The plans are underfunded by $1.5 billion, officials said.
The Pension Benefit Guaranty Corp. estimates it would have to cover more than $1.1 billion in retirement benefits, making it the second-largest claim in the history of the government insurer.
The company, based in Mishawaka, Ind., has missed more than $150 million in required minimum funding contributions and has said it will not make any additional payments to the retirement plans, which are only 47 percent funded, according to the PBGC.
The steel industry now accounts for more than 40 percent of all claims against the pension insurance program, but only 2 percent of covered workers.
Since Oct. 1, 2001, the PBGC has absorbed nearly $3 billion in claims from a number of steel companies, including Acme Metals, CSC Steel, GS Industries, and Empire Specialty Steel. In March 2002, the agency assumed $1.6 billion in pension liabilities from LTV Steel Corp., the largest claim in PBGC history.
The government corporation was created in 1974 to ensure payment of basic pension benefits for workers in the private sector. It is financed largely from insurance premiums paid by companies that sponsor pension plans and by the PBGC’s investment returns. Participants of a plan taken over by the program receive, on average, about 94 percent of benefits they had earned.
National Steel’s seven pension plans are: National Steel Corp. Retirement Program; National Steel Corp. Pension Plan-Hourly Employees; Granite City United Steelworkers of America Pension Plan; Granite City Pension Plan for Chemical Workers, Bricklayers, Hodcarriers, Blacksmiths, and Watchman’s Union; Weirton Retirement Program; National Steel Pellet Company Pension Plan for Hourly Wage Employees; and Pension Plan for Salaried Employees of National Steel Pellet Company.
Workers and retirees do not need to take any action. Until the PBGC becomes trustee of the National Steel pension plans, individuals who have questions or who wish to retire should contact National Steel’s pension plan administrator.
Information about PBGC’s pension insurance program is available at the agency Web site, www.pbgc.gov.