Uncertain Future For LTV Retirees
Mike West- Retirees of LTV Steel gather regularly to socialize and go over issues that affect how they spend their golden years. Their group is called the Steelworkers Organization of Active Retirees, or SOAR. About two dozen are meeting here at the East Dennison School, located just up the hill from LTV's Cleveland works. George Banks is the executive board coordinator for SOAR. He says steel workers have given a lot to the company and are likely to lose more.
George Banks- We made great sacrifices and, low and behold, apparently that was not good enough. I don't care what we do, it's never good enough. And this employer has some problems, they have a very bad opinion about their workers and because of that they seem to think that we as workers earn too much money. But if you look at our wage structure it's in line with the cost of living in America.
MW- Hourly retirees receive a percentage of what they earned while they were on the job. The amount varies depending on when they were hired and when they chose to retire. It's a complicated formula because every worker has different circumstances and pension agreements have changed with new labor contracts. Hourly workers receive a so called "fixed benefit" that never changes. However, Banks says over the years retirees have had to pay an increasing share of their health care. That means pension checks have shrunk, leaving fewer dollars to live on.
GB- We should be ashamed of ourselves to see senior people who live to be what I refer to as a ripe old age, yet we have no time to take a look at their condition, but people who make millions of dollars a year can get more money to continue to make millions of dollars and nothing coming back to the citizens who make it happen like that.
MW- John Marcis is a 91-year-old former steel worker who retired in 1975. He is one of 20,000 other LTV retirees who still live in the Cleveland area.
John Marcis- I worked in the pit where they were filling the molds after they tapped the furnace. I worked with the open hearths and they tapped the furnace and the liquid steel would go down from one mold to the other mold and I was working on there.
MW- Marcis says he's lucky enough to be over 65 and will qualify for medicare if he loses his LTV health insurance. But those under 65 won't be as fortunate. Marcis says their only hope is if the union can use their group buying strength to find another carrier willing will cover them, but retirees would still have to pay the premiums themselves.
JM- And those people that are retiring now, like now we will probably lose the whole health care and I don't how we gonna start, we gonna have to wait maybe as a whole the union. The SOAR chapter in Pittsburgh will get together and try to get some healthcare company that will take us as a group, not as an individual, as an individual you don't have much of a chance. But as a group you could.
MW- The pension checks themselves will be covered by the Pension Benefit Guarantee Corporation. However, when the government takes over some retirees will see their checks reduced depending on their age and benefits. Again, it a complicated formula. But in general, retirees over 65, who receive up to $42,000 a year, will not lose any money. That's according to Michael Coyne. He's a lawyer who deals with retirement and pension planning. He says the LTV retirement situation is a symptom of the growing health care crisis that is hurting many employers.
Michael Coyne- It's not unique to the steel industry but very common in the steel industry - very generous post retirement health care benefits are promised when steel was big and it's got to the point now when it's just almost impossible for some of these large companies to provide the benefits they originally promised.
MW- Coyne says business managers probably didn't see the problem coming, and it will only get worse.
MC- It's a little unfortunate that companies have promised benefits as large as they have in the past. And I guess in fairness to companies, years ago when most health insurance health benefits were promised, healthcare wasn't nearly as expensive as it is today so I'm not sure the employers ever anticipated what they would be facing in terms of cost for retirees and of course longer life expectancies has a big impact on the cost as well.
MW- Mark Tomasch is a spokesman for LTV Steel. He says the company retirement plans will last longer than LTV Steel, and doesn't expect the government to take them over for at least a couple of years.
Mark Tomasch- The plans also are in very good financial shape - they are very well funded. In fact, the LTV pension funds don't require an additional funding until the year 2004. However, with the company out of business, it obviously won't be around to make any additional contributions.
MW- There's at least one big downside retirees face when the govermenmet takes over. Pension expert Michael Coyne says it's likely to take longer for retirees to solve problems or issues with receiving their benefits because they will be dealing the government bureaucracy rather than a private company. In Cleveland, Mike West, 90.3 WCPN News.