Federal Agency Orders LTV to Fund Pensions

The federal government moved against LTV Corp. on Monday in an effort to get the steelmaker, which has been mired for five years in bankruptcy proceedings, to pay at least $13.2 million into its cash-strapped pension funds.

The Pension Benefit Guaranty Corp., a federal agency that guarantees payment of basic retirement benefits, ordered LTV to make funding contributions to three pension plans restored by the Supreme Court last year.

Separately, the Labor Department sued to enforce the order and to require immediate funding so the biggest of the three plans doesn’t run out of money this year.

LTV’s inability to fund $3 billion in pension liabilities was at the core of its decision to file for Chapter 11 bankruptcy protection in 1986.

The Dallas-based company tried to force the federal agency to assume responsibility for the plans, but the Supreme Court ruled against LTV last year.

Since then the steelmaker has been trying to work out a deal with its creditors that would allow it to inject money into the pension plans; meanwhile, the plans have nearly run out of cash.

“Action is necessary to ensure that the plan has assets to pay benefits and to prevent LTV and its creditors from continuing to play games with the livelihood of the plan’s participants,” said James Lockhart, executive director of the pension agency.

The federal agency said LTV’s biggest pension plan, which covers some 70,000 workers, will run out of money in early October unless the company acts. If that happens, some LTV retirees could lose non-guaranteed benefits.