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Tuesday, January 29, 2002

By Jim McKay, Post-Gazette Staff Writer

Bankrupt LTV Steel Corp. is rushing to notify roughly 13,000 salaried retirees that their company-sponsored health and life insurance coverage will cease at the end of February.

Cleveland-based LTV, currently liquidating its steel business after trying for a year to reorganize under the bankruptcy code, is under court order to mail the notice by Jan. 31. If it misses the deadline, the benefits will extend through March.

LTV said in papers filed with the court earlier this month that it could not afford to supply benefits to salaried retirees after Jan. 31. The February extension was negotiated after attorneys for the salaried retirees objected to that deadline, saying the notice was too short for the group to enroll in other plans.

Retirees and surviving spouses who are 65 or older qualify for Medicare. At stake for them is supplemental coverage that would pay for health services not covered by Medicare.

As part of the agreement with a committee representing salaried retirees, LTV will also mail information to retirees on plan transfer rights and on COBRA, the federal law that allows people who lose their jobs to continue group care coverage for a limited time at their own expense.

LTV no longer pays for health benefits for its 45,000 hourly retirees, most of whom were represented by the United Steelworkers union. Those benefits are now paid for through an LTV-financed trust fund that was established during labor negotiations with the union in 1994.

The fund, called a Voluntary Employee Benefit Association, had about $85 million left at the end of 2001 to spend on health care coverage for hourly retirees who are too young for Medicare and for supplemental insurance for those who are Medicare-eligible.

The union believes that fund has enough to pay benefits for several months depending on claims experience.

Separately, the Pension Benefit Guaranty Corp. announced yesterday that it had set up a toll-free information line to answer general questions from LTV retirees about the agency's insurance for defined benefit pension plans. The number is (800) 707-7242 .

The PBGC said it cannot at this time answer questions about specific pension benefits due individual LTV employees or retirees. Nor will it accept questions about medical benefits, life insurance or defined contribution retirement savings plans such as 401(k) plans that are not covered by PBGC pension insurance.

If the PBGC takes over the LTV pension plans this year, it will insure benefits up to $3,579 a month for a retiree over age 65, $2,827 a month for a retiree age 62 and $1,610 a month for those age 55.