Retirees Facing Cuts in Pension

By Allison Connolly and Tricia Bishop, Baltimoresun

Kenneth Carroll Sr., 73, a retired Bethlehem Steel millwright from White Marsh, was notified by the Pension Benefit Guaranty Corp. that his monthly pension will be reduced by $57.69 for 10 years to recoup the money the federal agency had overpaid him.

Thousands of local Bethlehem Steel retirees are being told that their pensions will soon be cut, and 1,100 people will have to pay money back.

It's the third blow in four years for the retirees, who lost their medical benefits in 2003 and then portions of their promised pensions after the federal Pension Benefit Guaranty Corp. took control of the funds from bankrupt Bethlehem Steel.

Letters announcing the adjustments began arriving last month.

"Yeah, I got the U.S. government's 'nasty gram' in the mail," said retired millwright Kenneth Carroll Sr., 73, of White Marsh. According to his letter, his monthly pension will be lowered by $57.69 beginning in January for the next 10 years.

The PBGC says Carroll was overpaid for most of 2003 until it cut his monthly benefit by $560.34 to meet federal limits. Now his monthly check - once $2,787.75 - will be slashed again, to $2,169.72.

After spending four years analyzing data, the federal agency determined that pensions for 3,000 former Maryland workers will shrink and that 1,100 of those people owe the government money.

About 200 retirees who had been underpaid the past four years will receive a lump-sum check - with interest. But even some of them are bitter that they have been in the dark so long over their future income. About 11,000 Maryland retirees will see no change in their check.

PBGC said yesterday that it took that much time to figure out benefits because the agency had to sift through records for 93,000 Bethlehem retirees and surviving spouses, and the terms of Bethlehem's 40 or so pension plans.

Those who have to pay back the PBGC could see up to 10 percent of their benefit check docked for years.

"I think it's a damn shame," Carroll said. "To go and sacrifice your life in one of these steel companies like I did, then turn around and get messed on."

Still, he said, he's in better shape than many others because he has never had a credit card and has avoided debt. But he worries about his peers who aren't so well off.

"Some people are on a fixed income and wondering, 'My God, am I going to get my medication? Can I get dog food? Can I have a light on? Can I eat?'"

'Another hardship'

Sen. Barbara A. Mikulski said yesterday that it was unfair to tell retirees they owe the government after so long a time.

"This is yet another hardship on steelworkers who have already endured a great deal," the Maryland Democrat said in a statement.

In a letter to PBGC's interim director, Charles E.F. Millard, she asked the agency to fess up to any mistakes it has made in the process.

In response, Millard said his staff will meet with affected retirees in Baltimore to explain the process.

"We understand very well that we are dealing with individuals and families who have worked hard for their pension and count on the insurance program for their retirement security," Millard said yesterday in a statement. "We also recognize that they can find these calculations confusing, even upsetting. I am personally committed to making sure that everyone's questions are answered."

The average overpayment by retirees in Maryland is $38 per month; the average underpayment, which will be repaid to the retiree, was $58 per month.

By law, PBGC must recoup any benefits paid that exceed limits instituted by Congress. The agency is not seeking to recoup overpayments less than $500.

PBGC began sending retirees letters last month telling them whether they owed - or were owed - money.

Those affected have 45 days to appeal. Their benefits will not be changed until any appeal has been resolved. To appeal, retirees must write PBGC a letter explaining why he or she feels the payment was miscalculated. Hardship is not a valid reason.

When retirees met with PBGC in 2003 to discuss the first pension adjustment, they were told that it could take about three years to figure out who was owed what. But the uncertainty has made budgeting difficult, and many are still waiting for their letters to find out where they stand.

"I am expecting a letter, for sure," said Arthur Dickey, 63, who retired from Bethlehem Steel in 2003 as a maintenance supervisor. For 38 years he worked at the Sparrows Point plant, as did his father and brothers. "Some [pensions] are being increased; some are being cut again. I think it stinks. We got hit terribly the first time around, and now here they're coming back. ... How far can they go?"

Four years ago, his pension was cut from $2,400 per month to $1,700. He can't handle another decrease, no matter how minor, he said.

"It was really tough, the fact that they cut pensions that much," Dickey said. "If they have another cut, I don't know what I'm going to do."

Don Kellner, president of a Bethlehem Steel retirees association, received a letter Sept. 28 informing him that he would lose $50 per month for the next 12 years - about $7,200. It won't break him, he said, but he's still disappointed.

"It's shock and dismay," Kellner said about the news. "It just makes me dismayed with the federal government and just the way they handle retirees."

4 years of wondering
LeRoy R. McClelland Sr. should consider himself fortunate. His letter said he was underpaid, and he will receive a lump-sum check next month for back pay with interest. But he doesn't feel so lucky.

When the government first took over the plan in 2003, he said he was told that he would owe $6,000. So McClelland, who worked for Bethlehem Steel for 42 years before his retirement on Jan. 1, 2001, has spent the past four years wondering when the government was coming to collect.

"I always had the fixation that the golden years would be the best years of my life, but they're not," said McClelland, who turns 70 in February. "What adds to the aggravation is that I don't know what my pension payments are going to be every month."