PBGC Protects Benefits of 82,000 LTV Workers In Largest-Ever Federal Pension Takeover
FOR IMMEDIATE RELEASE
March 29, 2002
The Pension Benefit Guaranty Corporation (PBGC) today announced it is taking over three underfunded pension plans covering some 82,000 workers and retirees of bankrupt steel maker LTV Corp., based in Cleveland. The move comes because no purchaser of LTV assets has agreed to assume any pension liabilities and, as LTV's liquidation progresses, no one will remain at the company to manage the plans' assets and pay benefits. With combined assets of almost $2.2 billion and benefit liabilities of $4.4 billion, the plans are underfunded by about $2.2 billion, PBGC estimates.
"Termination of these LTV pension plans represents the largest trusteeship in PBGC history," said PBGC Executive Director Steven A. Kandarian. "Most LTV plan participants will receive their full basic pension from PBGC," he said, noting that federal law limits the maximum benefit payable. He also noted that monthly checks for those already retired will continue, subject to the legal limits. "As responsibility for these plans moves to us, I wish to thank LTV and the United Steelworkers of America for helping to make this a smooth transition," Mr. Kandarian added.
The three plans terminate effective March 31, 2002. The largest plan, the LTV Steel Hourly Pension Plan, covers some 65,000 participants and is underfunded by nearly $1.8 billion. The LTV Steel Salaried Defined Benefit Retirement Plan has over 14,000 participants and is underfunded by about $316 million. The LTV Steel Mining Co. Pension Plan, with about 3,500 participants, is underfunded by around $70 million. There are over 82,000 people in all three plans, including 53,000 already retired and receiving benefits.
Separately, PBGC is preparing to take over the LTV Railroads Pension Plan, covering nearly 700 participants and underfunded by almost $2 million. The takeover would come after LTV completes the sale of its LTV Railroads unit which is not in bankruptcy.
Unaffected by PBGC actions are the pension plans covering current and former employees of LTV's Pittsburgh-based metal fabricating subsidiary, LTV Copperweld, which continues in business. Also unaffected are the ongoing pension plans for employees of VP Buildings, a subsidiary which LTV sold last year.
Under federal pension law, the maximum pension guaranteed for workers in plans that terminate in 2002 is $3,579.55 a month (or $42,954.60 a year) for persons retiring at age 65. Maximum guarantees are adjusted for those who retire at ages younger or older than 65 or those who elect survivor benefits. PBGC estimates that most LTV workers will receive their full basic pension benefit. However, certain recent additions to the basic benefit may not be fully guaranteed, and temporary supplements generally are not guaranteed.
Workers and retirees do not need to take any action. LTV pension plan participants who have questions about benefits or who wish to retire may contact PBGC's Customer Service Center toll-free at 1-800-707-7242. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to 800-707-7242. Information pertaining to the LTV pension plans may be found also on the Trusteed Plans Info section of the PBGC Web site, www.pbgc.gov.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by more than 44 million American workers and retirees participating in over 35,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by PBGC's investment returns.
— ### —
PBGC No. 02-16