The Pension Benefit Guaranty Corporation (PBGC) made the decision after finding that the retirees had been receiving monthly payments that exceed the legal limits guaranteed by the agency that insures private pension funds. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2003 is $43,977.24 a year, according to a Baltimore Sun report.
Adjusted checks for the new “estimated benefits” will begin arriving for the retirees in December. Once estimates are finalized – a process that could take years – the retirees will begin to see their checks reduced by up to 10% a month until the money they owe PBGC is paid off.
“Some people could have six, seven months of extra benefits that they have to pay back,” PBGC spokesman Jeffrey Speicher told the Sun.
Former Bethlehem Steel employees who must pay money back include:
- workers whose pension checks were increasing as part of a collective bargaining agreement
- those who exceed the pension agency’s caps on checks
- retirees that have been receiving an extra $400 a month to supplement their income until they turn 62 and become eligible for Social Security benefits.
Speicher said the payment plan is designed to make the process as painless as possible for retirees. “The recoupment policy is designed to stretch out the repayment without interest and to have it come out of future checks in very small amounts,” Speicher said. He also noted the PBGC does not charge interest on the money it recoups.