Beth Steel retirees to get $100 for lost health plan


Checks of about $100 each will be sent to 28,000 Bethlehem Steel retired salaried employees and their spouses in the next few weeks to make up for health care benefits they no longer receive.

About 8,000 of the 28,000 checks will go to retired salaried workers in the Baltimore area, which has the largest concentration of non-salaried Bethlehem Steel retirees in the country.

The $2.7 million disbursement is the result of an autumn sale of some International Steel Group stock. ISG of Cleveland bought Bethlehem Steel's assets for $1.5 billion in bankruptcy court in May 2003. Bethlehem Steel, once the Lehigh Valley's largest employer and one of the largest employers in Maryland, filed for bankruptcy in October 2001.

The disbursement originally was expected to amount to several hundred dollars for each retiree, according to a newsletter from the Retired Employees Benefits Coalition, which represents Bethlehem Steel's retired salaried workers.

After Bethlehem Steel canceled benefits for its retirees in March 2003, the bankruptcy court allowed the former workers to file claims for their losses. The claims amounted to almost $700 million, said Bruce Davis, an attorney representing the coalition. The $2.7 million payment the former workers are sharing represents less than 1 percent of the claims.

The Bethlehem Steel Corp. Liquidating Trust is distributing the checks as part of an agreement approved by the U.S. Bankruptcy Court to compensate retired salaried workers who lost health care benefits in March 2003 after the former steel giant filed for bankruptcy.

Officials of the retired workers coalition believe this first disbursement is more conservative than originally thought because there will be additional payments. The second payment could come as early as the July-to-September quarter of 2005, said Davis, the coalition lawyer.

"To say that $2.7 million satisfied that claim is a hell of a stretch," said James Van Vliet, who retired from Bethlehem Steel in 1988 as vice president of marketing.

Van Vliet said he pays more than $200 a month for his Medicare supplement, so clearly the one-time $100 check won't defray much of the health care costs he incurs now that Bethlehem Steel isn't providing benefits.

The 48,000 retired union workers of Bethlehem Steel and their dependents fared better than their salaried counterparts. Retirees who were members of the United Steelworkers of America will receive an estimated $65 million for a prescription drug plan in 2005 out of a $185 million fund that ISG will contribute to and the union will manage.

The money will be shared among 84,500 union retirees from Bethlehem Steel, LTV of Cleveland and Acme Steel Co. of Riverdale, Ill., which ISG also bought. The drug benefits will come from a retiree health care trust fund that ISG agreed to as part of its 2003 labor pact with the Steelworkers.

As part of the pact, the union retirees agreed not to contest Bethlehem Steel's motion to terminate its health and life insurance payments. The Steelworkers' union was in a better position to negotiate than the salaried retirees, because ISG needed its active members to run the steel plants.

"We had no leverage," said Van Vliet, who lives in Bethlehem and is a past president of retired workers coalition.

ISG's founder, Wilbur L. Ross Jr., is selling the combined company for $4.5 billion to a privately owned Dutch steelmaker led by billionaire Lakshmi Mittal. The consolidation will strengthen the largest steel company in the world. Reuters reported that Ross will earn a profit of $460 million on the deal, a development that does not sit well with everyone.

"People are saying, 'Dammit, that money belongs to us. We are the ones that made Bethlehem Steel worthy of the purchase,' " said Davis, the coalition attorney.

Retired salaried workers of Bethlehem Steel should receive the health care disbursement checks over the next few weeks. Any eligible retiree who does not receive a check should contact the liquidating trust by e-mail at

Sun staff writer Paul Adams contributed to this article. The Morning Call, of Allentown, Pa., is a Tribune Publishing newspaper.

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