U.S. Steel to boot non-union managers off pension plan

[Omaha Steve]

Source: NWI Times

Joseph S. Pete

U.S. Steel is freezing pensions for senior managers as it looks to cut costs.

The Pittsburgh-based steelmaker is switching non-union managers and supervisors who have been with the company for more than 12 years over to a 401(k) retirement plan next year. Any managers or supervisors who were hired or promoted more recently already get a 401(k) in lieu of a pension.

About 1,300 employees company-wide will be affected, spokeswoman Sarah Cassella said. Locally, U.S. Steel operates Gary Works in Gary, the Midwest Plant in Portage, and East Chicago Tin in East Chicago.

"On Jan. 1, 2016, impacted employees will be transitioned to the retirement account under the U.S. Steel 401(k) Plan and receive employer contributions under the 401(k) plan, which is the same plan provided to non-represented employees who joined the company on or after July 1, 2003," Cassella said.

FULL story at link.


U.S. Steel logo. The steelmaker is pushing senior employees off pensions onto 401(k)s.

Read more: http://www.nwitimes.com/business/local/u-s-steel-to-boot-non-union-managers-off-pension/article_83e2f23a-6c6c-5f07-b5f9-caea4f09ed20.html

[SoapBox]

1. 401 (k) = Huge odds of getting screwed

You must contribute your own monies...companies usually give some piddling little match as a percentage...either be super smart and savvy about investments or PAY someone to do it (noting the stock market tumble over the last week)...

Good luck...they are going to need it and this is what happens when you have no legal representation or recourse.

[BlueEye]

2. IF you can let it grow for 30 years, a 401(k) is actually not a bad deal at all.

It can even give you a better return than a pension. Day to day, month to month, even year to year fluctuations in the stock market are largely irrelevant. Look at the market over multiple decades... It does nothing but go up. Even if the market crashes the day before you retire (think like 4000 point decline), you still would have way more money than when you started 30 years ago.

The problem (and this is where US Steel is really screwing its people) is that if you don't have thirty years to grow the plan assets, ie, you were only 12 years from retirement and you just lost your pension, then you're in big trouble. I wonder if US Steel is going to fund the starting 401(k) amount to something roughly equivalent to the present value of what they would have vested in the pension if they still had one.

[goldent]

8. "I wonder if US Steel is going to fund the starting 401(k) amount"

US Steel is freezing the pension, meaning that it still exists, but will not increase in value. So the employees will get some benefit based on the present value of the pension, and that pension will still have to follow regulations. Legally I doubt if they could move that pension money into the 401k.

[BlueEye]

9. Ah, okay, thank you for clarifying that.

I am aware of a provision in federal pension law that allows employers to convert defined benefit plans into something called a "cash balance plan." It's sort of like a 401(k) except that the employers bear the investment risk. That's probably the most an employer could do in that situation.

[AuntPatsy]

3. Other businesses are following suit, I assume the leaders need more expensive toys

[Godhumor]

7. Actually US Step is getting hammered right now, primarily due to steel imports

The market is horrendous for homegrown iron ore right now.

[The Jungle 1]

4. Union run pensions are doing just fine

Wonder why it is that the union managed pensions do just fine. They are very good pensions with very good benefits.

Must be that the unions are much better businessmen. I think we need a union administrator to run for president.

[demosincebirth]

5. As a Teamster, I retired with more than I made working (base pay).

[mike_c]

6. this should tell you all you need to know about 401k retirement savings....

Bogus.

I love my union!

[GOLGO 13]

10. Yep, less than 5 yrs to go for my pension.

If I stay another 5 more years on top of that I'll get an additional 10% added on my regular pension. Go-go Union POWAH!