The Stel Salaried
Pensioners Organization wishes to thank The Hamilton Spectator for permission
to post the following article by Reporter Naomi Powell published in the August
25, 2005 edition
By Naomi
Powell
The Hamilton Spectator
(Aug 25, 2005)
Stelco's unionized employees are
fighting for joint control of the steelmaker's pension fund.
Joint administration would give the
United Steelworkers a say in how the proceeds of the fund are invested, as well
as the ability to monitor all future transactions related to it.
"It's our money in that pension
plan and we want to know what's happening to it," said Ray Silenzi,
president of the Steelworkers Organization of Active Retirees (SOAR.)
"Joint administration means we'd have access to all of the numbers,
nothing would be withheld."
Silenzi, part of the United
Steelworkers of America team now in confidential talks with the company over
how to restructure Stelco, said the team is pushing hard to make joint
administration of the pension a key element of whatever plan Stelco uses to
exit 19 months of bankruptcy protection.
The USW team is composed of five of six
union locals, as well as the international arm of the United Steelworkers.
Local 1005, representing workers at Stelco's Hamilton Hilton Works, has refused
to join the talks for fear it will lead to concessions.
Although not an official union
representative, Silenzi joined the USW team in February at the request of the
United Steelworkers local representing Lake Erie workers.
His organization has 1,800 retired
steelworkers in its membership, most from Hilton works.
The prime issue for the USW team has
always been how to deal with Stelco's $1.3 billion pension deficit.
The massive shortfall grew when the
company took advantage of the "too big to fail clause" in 1996.
An exemption in the Pension Benefits
Act, the clause allows large companies to postpone payments into their pension
funds.
A report released yesterday by the
Association of Canadian Pension Management concluded the future of defined
benefit plans in Canada is in jeopardy unless governments make significant
changes to the rules governing them.
The USW team is backing a deal by
Tricap Management which proposes to put $500 million into Stelco's pension
shortfall, paying the rest out in six years.
The plan has the support of the Ontario
government, which has agreed to bend Stelco's legal obligation to repay the
deficit in five years in order to make it work.
The province has refused to make the
same accommodations for company's plan, which calls for a pension payment of up
to $200 million, settling the entire debt in 10 years.
Settling the debt in five years would
require annual payments of more than $300 million, an amount Stelco CEO
Courtney Pratt says it can't afford.
But the Tricap plan has been flatly
rejected by Stelco's creditors, who have the power to vote down any plan.
"They're worried," Silenzi
said of pensioners in his organization. "Some don't get a whole lot on
their pension but they need it and they want to make sure they keep it."
Although frustrated at how long it is
taking the stakeholders to come up with a deal, Silenzi said he is confident a
solution is possible.
Citing constructive talks with the
company, on Aug. 18 the Steelworkers postponed indefinitely a motion to force
Stelco's stakeholders to consider the Tricap deal.
Since then, they have been in
confidential talks with the company, which has said it will submit a plan on or
before its next appearance in court on Sept. 7.
Stelco's current extension on its
bankruptcy protection expires on Sept. 9.
Justice James Farley, who is overseeing
the restructuring, has warned time is quickly running out for the steelmaker.
Pratt said last week the company is
"willing to consider anything," including the Tricap deal.
Bill Ferguson, president of the United
Steelworkers representing Lake Erie workers, said the talks were "going
well" yesterday.
He declined further comment, citing the
confidentiality agreement.
Stelco had no comment.
npowell@thespec.com
905-526-4620