Bethlehem Steel retirees who took a cut in their benefits in 2003 will see their fixed incomes shrink again now that the government agency managing their pensions has calculated the amount of “overpayments” made before the first cut.
About 11,000 Bethlehem Steel retirees and beneficiaries received benefits greater than the Pension Benefit Guaranty Corp. was allowed by law to pay in 2003. It will take the 1,100 retirees, on average, about 12 years to repay the government agency.
PBGC officials met with about 200 people ? most of them retired Bethlehem Steel workers ? in a packed conference room at the Best Western Hotel & Conference Center in Baltimore on Monday to explain why the retirees were overpaid and how the PBGC will recoup the money.
“We?re not just dealing with numbers, pensions or papers ? we?re dealing with people,” PBGC interim Director Charles E.F. Millard said to the retirees. “We understand it?s pretty upsetting.”
After Bethlehem Steel filed for bankruptcy in 2001, thousands of retirees had their pensions folded into the government-funded PBGC, with many seeing their monthly payments cut. The agency calculated the payments of some, paying either the full amount they would have received from Bethlehem Steel or more than should have been paid under the federal plan. The bulk of the overpayments occurred in 2003.
In September, after more than four years of determining the retirees? correct benefits, the PBGC began sending letters to the retired workers saying their pensions would be cut. The PBGC was dealing with thousands of retirees and calculations to properly identify individual benefits.
The average retiree will lose $37 a month until he or she pays back the total overpayment. Most retirees were overpaid about $5,000, said Vince Snowbarger, deputy director for the PBGC. The PBGC is not charging interest on the overpayments.
“I understand you don?t feel like you were overpaid. We were paying more than the law allowed us to pay out,” Snowbarger said. “There is not a whole lot of good news about recoupment.”
Joe Delfino, who worked at Bethlehem Steel for about 30 years and retired in 2001, said he hasn?t received a recoupment notice from the PBGC, but he expects one to arrive soon.
“There?s not a thing I can do about it,” Delfino said. “It?s aggravating.”
Appeal Process
Retired workers who disagree with their benefit calculation can appeal the recoupment by writing a letter to the PBGC at:
Pension Benefit Guaranty Corp.
ATTN: Appeals Board
P.O. Box 151750
Alexandria, VA 22315-1750
Fax: 202-326-4095, 202-326-4091
E-mail: [email protected]
The letter must be written within 45 days of receiving a letter from the PBGC.
