Some ATI retirees fear they’ve lost a pension guarantee after recent changes by the specialty metals company.
ATI purchased group annuity contracts from New York-based Athene Annuity and Life Co. and Athene Annuity & Life Assurance Co., transferring about 85% of its U.S.-qualified defined-benefit pension plan obligations, ATI spokeswoman Natalie Gillespie said.
The contracts affect about 8,200 plan participants.
ATI officials say benefits will not change as a result.
“In theory, it shouldn’t have been that big of a deal,” said Robin Rosewicz, a Lower Burrell retiree who worked for 35 years at the mill and served as financial secretary for Local 1196 in Brackenridge.
“But it is.”
Rosewicz and others, including 40-year employee Bill Schoen of Shaler, said the move leaves retirees in the lurch should Athene default.
“When you sign up for retirement, the understanding is you will be covered by Pension Benefit Guaranty Corp. insurance,” Schoen said. “If it defaults, the government will step in and pay your pension. With the transfer to an annuity, we don’t have that guarantee.”
No one from Athene could be reached for comment.
A letter from ATI to its pensioners was sent in October, alerting them to the changes effective Jan. 1.
“The problem was, nobody from the USWA International in Pittsburgh or Local 1196 in Brackenridge was made aware of this change until after the fact and the letters were already sent out,” Rosewicz said. “There was absolutely no advance warning. ATI did this on its own volition without anybody’s approval or consent. I certainly did not want this change.
“We gave our blood, sweat and tears to help the company make money. This is one hell of a way for ATI to thank workers and retirees.”
Rosewicz, Schoen and others are seeking help from the United Steelworkers International in Pittsburgh and Local 1196 to answer what they call a slew of uncertainties. The pair believes an injunction, or at least a grievance, should have been filed.
“What about little improvements we used to negotiate to our pensions every year?” asked Schoen, a third-generation steelworker who grew up in Harrison. “You don’t forget about the people who got you where you’re at. There’s no way to get little perks, because they don’t own it anymore.
“We have no bargaining power with Athene. We’re stuck with what we got.”
Calls to the United Steelworkers International and the Local 1196 were not immediately returned.
Rosewicz and Schoen plan to seek help from U.S. Sen. John Fetterman’s office, citing his fondness for blue-collar workers.
ATI CEO Robert Wetherbee said in a release that, with the shift from a pension to an annuity, the company meets “all its pension obligations and everyone benefits.”
Gillespie said the changes “were a big step in de-risking ATI’s legacy pension obligations while fully meeting our commitments to active and retired employees.”
The pension obligations represented $1.77 billion in liabilities on Dec. 31, 2022.
“Our retirees will gain the security of having a large, financially strong insurer with established expertise provide their pension benefits,” Wetherbee said. “Our business meets its commitments to all its pension plan participants, through both the annuity purchase and our decision to fully fund our remaining qualified pension obligations. And our shareholders gain confidence knowing these de-risking actions will result in lower, more predictable pension expense in the future.”
Still, Rosewicz questioned the long-term impact to retirees.
In the October letter, ATI detailed the annuity as a benefit protected up to specified limits.
“ATI failed to notify people that the Pennsylvania Life and Health Guaranty Association only covers individuals up to $250,000 in the event of an insurance company defaulting or not being able to meet a financial obligation,” he said. “This new conversion from a pension to an annuity does not fully protect many of the pensions currently being paid.”
A lot of the pensions are worth more than $250,000, Rosewicz said.
“We all know what is going to happen in the event of an Athene default,” he said.
“Instead of getting a monthly check, people will have to start digging into and spending that $250,000 to pay their bills and make ends meet. Eventually, all of that $250,000 will be gone, and retirees will have absolutely nothing coming in the rest of their lives.”
Tawnya Panizzi is a TribLive reporter. She joined the Trib in 1997. She can be reached at [email protected].