As previously discussed, retired Iron Range miners from National Steel (now Keetac, under new management) have been through the wringer on their pensions after National folded in 2003. A specific group of miners receives pennies on the dollar, less than half the promised amount.
Late last week the Pension Benefit Guarantee Corporation, a federal organization tasked with the almost impossible job of protecting worker’s pensions when their parent companies go bankrupt or reorganize, issued an important statement.
The Pension Benefit Guaranty Corporation moved quickly to resolve problems described in a recent inspector general report on the takeover of National Steel’s pension plans in 2003. The report said corrective action began last year.
“We take our responsibility to the people we serve very seriously,” said PBGC Director Josh Gotbaum, appointed to lead the agency last July by President Obama. “We are embarrassed and saddened that this occurred. We are resolved to set things right, and we will do so.”
Following National Steel’s 2003 bankruptcy, PBGC became responsible for seven pension plans covering 35,000 workers and retirees. PBGC has since paid more than $1.5 billion to National Steel retirees.
In Minnesota’s Iron Range, more than 1,000 National Steel Pellet Company retirees receive benefits from the agency. PBGC has paid over $62 million to Pellet Company retirees since assuming the plans.At the same time PBGC took responsibility for paying benefits, it also took over the plans’ assets. The agency’s IG found that PBGC and its contractor had done a seriously flawed job in making sure it had collected all the assets and that assets had been properly allocated to each plan. As a result, some National Steel retirees might have received lower benefits than they should have.
Neither the IG nor PBGC yet knows whether any National Steel pensioner actually suffered any reduced benefit as a result of the audit. PBGC is working now to find out and expects to know sometime this summer.
PBGC committed to correct its mistakes. “If anyone lost even a dime, their benefits will be corrected and they will be paid back with interest—and an apology,” Gotbaum said.
Local media have reported on the findings, though importantly this finding is more of an eventual admission of reality, not the news these miners still wish to hear: that their pensions will be funded at full value. That finding will require more political will than has been needed so far and the setting of a significant precedent over corporate pension plans.
It bears mentioning that on the western Mesabi, no issue dominates the chatter of local coffee klatches and public gatherings as much as this one, especially among the 50-70-year-olds who still dictate opinion leadership in the region. I talk a great deal about the Iron Range future to a small audience. This is a story of the Iron Range present with many local eyes on it.
Speak Your Mind