Kaiser Steel Asks U.S. Takeover of Its Pension Plans

Kaiser Steel Corp. has asked a federal agency to assume its remaining three pension plans covering more than 7,600 retirees and spouses, many of whom worked at Fontana steel mills, officials said.

The Pension Benefit Guaranty Corp., which insures company pension plans nationwide, assumed one Kaiser plan in March at an estimated cost of $27 million. That plan covers 1,000 current and retired salaried employees.

The three remaining plans represent liabilities of about $270 million, company officials said.

Kaiser officials said in March they stopped making payments to remaining pension funds and might ask the federal agency to step in.

Lask week, they filed a notice in U.S. Bankruptcy Court in Denver of their intent to cancel the plans, said Kaiser spokeswoman Billie Greer.

A bankruptcy judge now must decide whether the company may ask the PBGC to assume the plans.

The federal agency has not been notified of Kaiser’s plans to terminate the pensions, said PBGC spokeswoman Jane M. Hoden on Friday.

PBGC’s executive director, Kathleen P. Utgoff, warned last week that the agency can meet only half of its commitments to current and future retirees, mainly because troubled steel companies have sought government help.

The agency was $4 billion short of covering $7 billion worth of promised benefits, she said, and about 80 percent of the $7 billion liability stemmed from failures in the steel industry.

Kaiser, which filed for protection under federal bankruptcy laws Feb. 11, already has cut off medical and life insurance benefits to more than 5,500 retirees.