After speaking with the suits yesterday, Joe LaCotti now understands why he owes the government $40 a month for the next 20 years for overpayments he received from his Bethlehem Steel pension. But it doesn't make it any easier to swallow after giving 44 years of his life to Bethlehem's maintenance department.
"I'm 68 with a bad heart and a pacemaker," said LaCotti, of Perry Hall. "I'll be dead before they get it."
Bethlehem Steel Corp., which owned the plant at Sparrows Point, went bankrupt in 2002 and retirees are still feeling the aftershocks. About 500 retirees and their spouses met yesterday with officials from the federal Pension Benefit Guaranty Corp., which administers their retirement plan, to discuss changes in their monthly payments.
After four years of crunching the numbers, the PBGC sent letters to most of Bethlehem's 97,000 beneficiaries telling them - finally - what their monthly pension will be. In Maryland, about 3,000 will see their checks shrink and 1,100 must reimburse the government for overpayments made over the past four years when benefits were based on estimates. A more fortunate 200 were underpaid and will see their checks grow. About 11,000 will see no change in their pensions.
Most of the overpayments were made in 2003, when Bethlehem's retirement plan was terminated and the federal agency took it over. To ensure that there was no gap between checks, PBGC made initial estimates of what retirees were owed and paid them accordingly until the agency was able to tally more accurate payments. Federal law requires the PBGC to recoup any overpayments.
"Obviously you worked very hard for the pensions you were promised," PBGC deputy director Vince Snowbarger told retirees during the afternoon presentation at the Best Western Hotel at Baltimore Travel Plaza. "But we do have limits on the pensions we can pay."
Bethlehem had more than 40 different retirement plans. Actuaries had to calculate 1,000 equations for each retiree to figure out the correct payment, he said, and the job took longer than they thought.
The average overpayment was $38 per month, to be paid back over an average of 12 years; the average underpayment was $58 per month, and will be paid to the retiree in a lump sum. Beneficiaries have 45 days from the date of their letters to appeal changes to their benefits. Their monthly checks would not change until the appeal was resolved.
PBGC officials said a small group of retirees and their spouses have not yet received letters because their cases are more complicated, involving ex-spouses or supplemental plans.
Sandy and James Shrout of Glen Burnie were among those trying to get a handle on their future.
"We haven't gotten any information yet, that's why we're here," said Sandy Shrout, 64, whose husband James, 67, retired from Bethlehem.
"He's diabetic and I have my own complaints and I don't think either of us could go back to work," she said.
Lucille Ziglier, 83, of Baltimore, assumed that since she didn't get a letter, her payments would stay the same.
"I think I'm safe," said Ziglier, an inspector for Bethlehem who retired in 1989 after 20 years.
However, they were told they will have to wait for the official letter to find out what their payments will be.
John Maynard, 67, of Essex, is one of those who were underpaid. In September, he received a letter from PBGC that said he would receive an extra $50 a month, which includes back pay with interest.
But he can commiserate with former co-workers like LaCotti. In 2003, Maynard said he was "a wreck" when his pension check was cut by $306 per month. At the same time, his health benefits were eliminated and he went from paying $180 per month to paying $1,100 for private insurance to cover himself and his wife.
"It's such a mess to understand. There are so many figures," said Maynard, who worked 43 years for Bethlehem in the electrical department.
He sat for a time yesterday on a black leather couch in the hotel lobby, unsure whether he would meet with actuaries on the fifth floor to review the math.
"Everyone coming down says it's the same deal," he said.