Steel Pension
Pension Plans in the Steel Industry
Can the government save steel, and your pension?
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“Why should an airline employee receive better treatment than a steel worker whose plan failed in 2003?”
- The Hawaii Reporter, August 10, 2006‚ 2005
"And if you've retired before age 65, say, a steelworker who's put in his 30 years, the federal agency will pay you only two-thirds of the pension amount promised you by your employer.”
- - The Palm Beach Post‚ July 18‚ 20
“For the steel industry, 2000 to 2003 ‘was about the lowest period in the industry when 250,000 retirees and their spouses lost benefits during Chapter 11’ bankruptcies...If you're relying on the court to save the day, that will be a strategy that leads to distinct disappointment."
- - David Jury,assistant general counsel for the United Steelworkers of America
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What’s New . . .
In voting on Monday, September 25, members of the International Association of Machinists and Aerospace Workers/Armco Employees Independent Federation Local 1943 voted down AK Steel’s “final” contract proposal.
The proposed 5-year contract would have allowed the steel company to bring in non-union temporary workers if not enough union members could be found to maintain production. The contract included several improvements in pensions.
A new defined benefit pension under the IAM pension fund would have been established to which the company would make a $1.80 contribution per hour based on a 40-hour work week. All returning employees would be guaranteed a 40-hour work week.
Following rejection by the union, both sides said they would take a one-week cooling-off break before continuing negotiations. A favorable vote would have ended a seven-month lockout at the Middleton plant. In the vote, union leaders opposed the contract.
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On Thursday, Aug. 17, President Bush signed into law the Pension Protection Act of 2006, which he called the "most sweeping reform" of US pension law since the enactment of the Employee Retirement Income Security Act (ERISA) in 1974. The compromise measure will have broad impact on the way future pension plans are structured and funded. It will affect pension outcomes, not only for tens of thousands of employees whose plans are currently hanging on the contents of the bill, but for millions of Americans who remain but dimly aware of pension issues. Affected groups everywhere are weighing in with commentary. With some 44 million Americans covered by private pension plans, bipartisan support for private sector reform was made possible by not stirring up a hornet’s nest of debate about stricter funding guidelines for public employee defined-benefit plans, which remain generous and are woefully underfunded. In any case, the bill basically signals the end of private defined-benefit pension plans. As recently as 25 years ago, more than 80 percent of large and medium-sized companies offered such plans. Today, fewer than a third do.
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Late in the day on August 3, the Senate approved a compromise Pension Reform Act and sent it on to the White House. For the most part, HR 4 does not change PBGC obligations to existing pensioners who have seen their plans taken over from bankrupt steel companies.
However, the bill tightens rules for employers with defined-benefit pension plans -- 21% of all workers -- and clamps down on companies that are failing to meet their funding obligations. Underfunding of Defined Benefit plans is now estimated at $450 billion.
The bill requires that companies bring their plans to 100 percent funding within seven years, although certain major airlines are given a longer period. Plans that are seriously underfunded face restrictions, such as a ban on increasing benefits, and must make accelerated catch-up contributions.
President Bush, who has taken a tough stance on forcing full funding of company promises, is expected to sign the legislation shortly.
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Airline pension funding remained a major sticking point in Congressional proposals to strengthen the nation's employer-based pension system and ensure the retirement benefits of tens of millions of people. It’s possible that a deal may be reached soon, passing to Congress for a vote and then on to the President for signature.
Proposals on the table would substantially increase the deficit of the Pension Benefit Guarantee Corporation, the government agency that insures the plans. If passed, an agreement would likely go into effect in January of 2008 as the result of months of slow-moving talks between the House and Senate.
It would impose stricter funding rules on companies that fall behind in contributions to defined-benefit pension plans, which are important source of retirement income for 44 million people in the United States.
Recent Steel Industry Pension News
AK responds to union’s pension concerns
Union nixes contract
AK Steel’s “final” contract offer
Rise and fall of steel industry chronicled
Totalling up unfunded pension liabilities
Strike Against Steel of West Virginia Ends
Ironworkers union woos young with ads
Govt. Takes Over Oneida Pension Plan
Pension law seen helping employees save for retirement
Bush signs pension reform bill into law
U.S. Steel to put $130 million into its pension plan
Pension bill: Many changes, mostly positive
Congress Reforms Corporate Pensions
Varied Response to Passage of Pension Bill
New pension law: Mostly good for Steel, other retirees
Pension Benefit Guarantee Corporation a Bankruptcy Creditor
Pension safety bill hits speed bump
Congressional plan could weaken pension system
Pension safety bill hits speed bump
AK Steel to Make Voluntary $50 Millions Pension Trust Fund Contribution
US pension bill may include help for defense companies
Retirees fight premium hikes
Agreement close on pension bill, lawmakers say
Are Companies Bound by Promises of Lifetime Benefits?
Retirees leery of health care burden
Steel Pension Questions & Answers
So you’re a steelworker...
Steel pensions are plagued with problems
If you’re still working, there is some good news
Where do I go to find out about my pension?
Contact info for steel companies
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