Pension Payback Due to Federal Blunder

Aired Thursday, May 8, 2008

Over a thousand retired workers in Lorain County will be getting a cut in their pension checks because of an accounting blunder by the federal agency handling benefits for the region's bankrupt steel plants. Ideastream®'s David C. Barnett explains.

A series of steel plant failures dating back to the 1990s continues to haunt Lorain County to this day.  The latest blow to the local economy comes with the revelation that the Pension Benefit Guaranty Corporation has been overpaying retirees for years, and now the agency wants its money back.  The PBGC was created by the federal government to administer pensions after Republic Technologies International went bankrupt six years ago.  After discovering the accounting error, the agency announced it will be making a ten percent monthly deduction until the difference is settled. Rick Lucente of the Steelworkers Union says that’s going to take awhile.

LUCENTE:  And some of them will never get it paid back, because there’s guys that have to pay it back until the year 2099.

In some cases, Lucente says retirees will also be paying back bonus payments they got as a part of early retirement packages.