Nov 3, 2003
About 7,000 Bethlehem Steel retirees – roughly 1,300 of them in the Baltimore area – were recently informed they will have to pay back thousands of dollars in pension benefits to the so-called Pension Benefit Guarantee Corporation (PBGC).
Melvin Schmeizer, for example, was told he will have to repay $15,000 to the PBGC. The PBGC is cutting his pension checks from about $2,850 a month to only $1,580. And he will have to pay back the amount the PBGC supposedly "overpaid" him since the time Bethlehem's pension plan was terminated last December. His case may be extreme, but he's not the only one.
When Bethlehem Steel declared bankruptcy, the pensions of all Bethlehem workers were taken over by the PBGC. All former Bethlehem workers will take some several kind of cut. Retirees who are less than 65 will have their pensions severely reduced. Retirees who designated a beneficiary will have their pensions cut in half. 28,000 employees still working at former Bethlehem mills or elsewhere will take even bigger cuts when they retire. All 95,000 of Bethlehem's current and future retirees will receive no cost-of-living increases in their PBGC pensions, as Bethlehem retirees did before the company declared bankruptcy and sold all its assets to International Steel Group (ISG).
Finally, all these retirees – current and future – have also had all their Bethlehem-paid retiree health insurance benefits terminated.
The Bethlehem bosses are far from the only ones to have done this to the workers who made them rich. Tens thousands of other active and retired steelworkers at LTV Steel and National Steel have been similarly attacked in just the last couple of years. Millions of other workers in other industries have also been stripped of their pensions and health benefits, in most cases following so-called bankruptcies that allowed their bosses to escape from their retirement obligations to them, while selling the plants they worked in to other bosses who continue to run them for a profit.
The Pension Benefit Guarantee Corporation is clearly misnamed. It doesn't guarantee pensions. But it certainly does protect the profits of companies that want to junk their pension plans.