‘LTV and the PBGC are working closely to effect an orderly transfer of the pension plans,’ said Glenn J. Moran, chairman and chief executive officer of The LTV Corporation, in a company press release.
The move would transfer the pension obligations of some 82,000 current and former LTV workers to the Pension Benefit Guaranty Corporation (PBGC). LTV filed for bankruptcy protection last December.
Late last year, several large steelmakers were in talks with the federal government about the possibility of taking over the steelmakers’ pensions and retiree health care programs as part of a three-pronged industry consolidation plan – a move opposed by some.
The top five steel producers account for more than $10 billion in unfunded pension and health care obligations.
The affected LTV defined benefit pension plans are:
- the LTV Steel Hourly Pension Plan
- the LTV Steel Salaried Defined Benefit Retirement Plan
- the LTV Steel Mining Company Pension Plan.
LTV Steel also said that, based on conversations with PBGC officials, in order for eligible laid-off or active hourly employees covered by the LTV Steel Hourly Pension Plan to receive the “special payment’ and “partial lump sum’ from the PBGC, they must retire no later than February 28, 2002.
The company says it is working with the United Steelworkers of America to alert all affected former employees to turn in a completed Application for Retirement by the deadline if they wish to receive these benefits.
Salaried employees are covered by different pension plans and the February 28th retirement deadline does not apply.
The PBGC has established a toll-free telephone information line for participants in the LTV Steel defined benefit pension plans — 1-800-707-PBGC (7242), and has created a special LTV Steel information section on the agency’s Web site .
The Web site includes information about the PBGC and a set of questions and answers for LTV Steel employees and retirees.
LTV also said it expects to terminate its defined contribution and 401(k) plans this year, at which time balances will be distributed to individual employees.
The PBGC picked up responsibility for the two pension plans of Dunkirk, NY-based Empire Specialty Steel Co. in late December.
The steel industry has presented the PBGC with some of its largest liabilities on a historical basis (see A Table of the Top 10 Pension Fund Failures ), and the large retiree pension and health liabilities continue to represent a financial challenge for the beleaguered industry.
However, the PBGC has said it is unlikely to absorb that burden all at once.