Ronald S. Mitchell was looking forward to living out his retirement comfortably after his 28-year stint as maintenance supervisor with United Helpers. But potential cuts to the 56-year-old Ogdensburg residents pension payments from his former employer could thwart his plans.
Mr. Mitchell and about 300 United Helpers retirees are looking at possible cuts to their monthly retirement checks after United Helpers announced in a memo last week that control of its pension payments will be taken over by the Pension Benefit Guaranty Corporation.
United Helpers froze pension benefits on Dec. 31, 2005, when United Helpers Management Company expected its contribution to increase from $600,000 to $3 million over the course of several years, CEO Stephen E. Knight said Thursday.
Since then, United Helpers has continued to fund its pension plan under Internal Revenue Service requirements to the tune of $1,080,000 annually.
Because of the economic collapse in 2008 and many other contributing factors, even that amount is not enough to meet the IRS funding requirements, Mr. Knights said in a memo sent to retirees Dec. 17. We now have no further option but to seek an agreement with the Pension Benefit Guaranty Corporation to take over the Plan through a process called distress termination.
Mr. Knight also cited new federal regulations and an increase in pension premiums in response to the 2008 recession as reasons United Helpers officials decided to turn over control of retirees pensions to the Pension Benefit Guaranty Corp. on March 1.
The Pension Benefit Guaranty Corp. is a federal agency created in 1974 and designed to protect pension benefits in private-sector plans. The agency is financed from insurance premiums paid by companies whose plans the agency protects, the agencys investments, assets of plans that have been taken over and recoveries from companies formerly responsible for the plans.
If [employees] are worried they are going to stop getting retirement checks, that is not the case, Mr. Knight said. They should not stop getting checks.
But how much of a payment will arrive in retirees mailboxes each month is yet to be determined, Mr. Knight said.
Our understanding is that things will go on as they have been until we finish negotiations with PBGC, Mr. Knight said. Were putting them on formal notice and have to wait for the PBGC to respond. It is impossible to predict when we will get a response. All I can say is that we will keep them informed. At this point in time, we dont know all the facts.
Most current employees are not affected. The company has eliminated guaranteed pensions for most employees and replaced them with 401(k) individual retirement accounts.
Mr. Knight said his organizations recent expansion had nothing to do with the move. United Helpers over the two years has expanded its senior housing options to the Partridge Knoll independent retirement community, Canton, and expanded its Mosaic complex in Ogdensburg, which provides day habilitation services for developmentally disabled and mentally ill people.
Its really separate pots of money, Mr. Knight said. In fact, most of the expansion we have done has been to strategically solidify our stability for the future. That has really helped rather than hinder things for our employees.
Mr. Mitchell, a disabled veteran, said he can find ways to get by without relying on his monthly pension check, but he is worried about his fellow retirees.
I get some benefits through the VA (Veterans Affairs) so it is an easier pill for me to swallow than those who are just going to have to live off their social security, he said.
Mr. Mitchell said he is frustrated about the lack of information provided by the Pension Benefit Guaranty Corp. and United Helpers.
They sent this memo out right before Christmas, but we dont know what it means, he said. We could get $10 or $300 a month. We dont know. No one is talking.
Mr. Knight said he is waiting for more information from the corporation before releasing additional information to retirees.
As soon as we know something definitive, the employees will know something immediately, Mr. Knight said.