Retirees

Thousands of local Bethlehem Steel retirees are being told that their pensions will soon be cut, and 1,100 people will have to pay money back. It's the third blow in four years for the retirees, who lost their medical benefits in 2003 and then portions of their promised pensions after the federal Pension Benefit Guaranty Corp. took control of the funds from bankrupt Bethlehem Steel. Letters announcing the adjustments began arriving last month. "Yeah, I got the U.S. government's `nasty gram' in the mail," said retired millwright Kenneth Carroll Sr., 73, of White Marsh.

After speaking with the suits yesterday, Joe LaCotti now understands why he owes the government $40 a month for the next 20 years for overpayments he received from his Bethlehem Steel pension. But it doesn't make it any easier to swallow after giving 44 years of his life to Bethlehem's maintenance department. "I'm 68 with a bad heart and a pacemaker," said LaCotti, of Perry Hall. "I'll be dead before they get it." Bethlehem Steel Corp., which owned the plant at Sparrows Point, went bankrupt in 2002 and retirees are still feeling the aftershocks.

CHICAGO -- Montgomery Ward & Co. is terminating its pension plan and using some of the surplus money to help it emerge from bankruptcy.The move affects 30,000 Ward retirees and 22,000 current employees, Ward said.Ward doesn't yet know how much money it will recapture from ending the plan, said Ward spokesman Chuck Knittle.But given the size of Ward and the number of employees in the pension plan, it is probably millions of dollars and possibly, tens of millions, pension experts say.The retirees are being offered the option of receiving an annuity from an insurance company equal to the value of the pension they were receiving or a lump-sum payout.

URBAN and Virginia Linn figured they had a good idea of what to expect financially in retirement.Urban, a mathematics statistician at the former Martin Marietta Corp. before retiring in 1989, was familiar with budgeting and investments. Virginia, who retired three years ago at 64, had seen the financial issues facing seniors through her job at Baltimore's Commission on Aging.Still, the Baltimore couple had a few surprises. Virginia was shocked by the federal tax bite. Urban was struck by ever-rising insurance rates and the switch to a fixed income.

The Baltimore County Council voted last night to allow a group of retirees to collect both pensions and paychecks from the county, exempting them from a law that bars "double-dipping" by county employees.The council's unanimous vote allows nine retirees, most of them former police officers or firefighters, to work as school bus drivers while they collect pension checks.Council Chairman Kevin B. Kamenetz, a Pikesville-Randallstown Democrat, said he voted for the bill because the retirees apparently were not told that taking the jobs violated the county code, and because granting the exemption would not affect the retirement system's finances.

Condominium and co-op resales soared to record numbers across the country in 1997, as first-time buyers and retirees increased their purchases, according to figures released by the National Association of Realtors.More than 516,000 existing condos and co-ops were sold last year, the highest since NAR started tracking these sales in 1981. Boosted by low mortgage rates, both younger and older homebuyers showed a new interest the condominium market."First-time buyers and retirees are helping to push condo sales to new records," said NAR President R. Layne Morrill.

In an emotional march on the Maryland State House, more than 300 state workers vowed last night to mount an intense, personal appeal for better pay and pension benefits.Social workers, correctional officers and other unionized state employees held aloft handmade signs with an election-year reminder for the legislature."I want some respect! And I vote!" shouted George Reason, a veterans employment representative with the state Department of Labor, Licensing and Regulation.State workers came from across Maryland to protest that they have not received a raise in several years, and their retirement benefits rank among the lowest in the nation.

The two candidates for governor traded charges yesterday over which side had ducked debates, as Republican Ellen R. Sauerbrey canceled -- and then abruptly agreed to -- an appearance with Gov. Parris N. Glendening on a national cable television talk show.Both candidates had been scheduled to appear on "Larry King Live" last night, but Sauerbrey pulled out yesterday morning, noting a scheduling conflict. She said she wanted to honor a previously scheduled visit to Yeshivat Rambam, an Orthodox Jewish school in Baltimore.

Key state lawmakers sparred yesterday over what kind of tax relief is needed in Maryland, with Republicans backing Ellen R. Sauerbrey's plan to help the elderly and Democrats promising to look for affordable cuts that would benefit all taxpayers.Sauerbrey, the GOP gubernatorial front-runner, set off the debate in Annapolis with her recent proposal of a $200 million income tax break for retirees.Democratic leaders, including House Speaker Casper R. Taylor Jr. and Senate President Thomas V. Mike Miller, criticized Sauerbrey yesterday for failing to explain how she would make up the lost revenue.

WILL YOUR Social Security checks provide you with sufficient retirement income? Don't be too sure.As reported in a recent U.S. Health & Human Services survey: "For the average taxpayer, Social Security replaces only 35 percent of retirees' pre-tax income."Worse yet, the survey shows that 49 percent of retirees rely on Social Security for their main source of income, and concludes: "whatever measures are taken to keep the system solvent, you won't be able to depend solely on Social Security if you want to retire at your current standard of living."

The Social Security Administration announced Thursday that beneficiaries won't be getting an increase in their checks next year - the first time that has happened since automatic adjustments began in 1975. A lack of inflation triggered the decision, which will affect more than 57 million people nationwide, the agency said. But Lois King, 84, doesn't buy it. "Everywhere you go, everything is higher than it was six months ago. Sometimes from one week to the next," said the Towson resident, who receives two-thirds of her income from Social Security.

Investors and economists worry about higher inflation, but the more immediate concern is inflation that's flat or even negative. Retirement contributions, Social Security and pension checks, as well as certain tax breaks, are tied to inflation. And when inflation is flat or negative - which it is for the first time since the 1950s - that could mean no increases in Social Security checks and even smaller pension checks for millions of retirees. And it could restrict the amount you can sock away in your 401(k)

Baltimore police officers and firefighters can't keep on receiving the lucrative pension benefits now paid to retirees. The numbers work against them. Police and fire retirees are living longer, which means the city has to pay out much more over the long haul, and other aspects of the pension deals are costing more, too. Poor performance in the stock market has compounded the problem for everyone and put the city on the hook for $82.1 million in the fiscal year that begins in July and a whopping $110 million the next year.

Union leaders and Baltimore officials have begun discussing major changes intended to restore viability to police and firefighter retirement funds weakened by huge losses. While both sides agree that the situation is dire, no agreement emerged at a City Council hearing yesterday on the best course of action. None of the proposed fixes under consideration would fill the growing hole that pension costs are boring into the city's budget. Taxpayers are projected to pay $110 million to the retirement fund in the budget year that begins July 2010, up from $82 million next year.

The Wall Street rally last week provided a precious opportunity in a bear market: an exit door for people in need of cash. Typically, when the market has crashed like it has, the last thing investment advisers recommend is selling. They want people to hold on to solid stocks and stock funds and wait for a healthy market. But some people can't wait. They might have locked too much money up in stocks and need cash for bills. Sometimes people have more options than they realize and don't really have to sell.

As the U.S. economy continues its meltdown, it is unthinkable that the retirees who fought wars and built our nation through decades of labor, earning post-employment pensions and medical benefits, are among those being faulted for America's economic problems. Lately, economists, talk-show hosts, journalists and even politicians have been echoing the corporate-speak by tagging baby boomers and retirees' earned pensions and health benefits as "legacy costs" dragging our nation down. The Miriam-Webster dictionary defines legacy as a "gift by will, especially of money or other personal property; bequest; something transmitted or received from an ancestor or predecessor."

Asset prices and interest rates are down, making this an opportune time for retirees to think about estate planning. Trouble is, few people are interested. Such planning can involve divesting assets just when you're feeling the most vulnerable. Wealthy or not so wealthy, many retirees are scaling back this year on what they will do for their heirs. Wealthier families are re-examining tax strategies that involve gifts to family and charities, and retirees with more modest portfolios are reducing their help for adult children so they can preserve more of what is left of their nest eggs, financial advisers said.

Pension plan helps contain city's costs The Baltimore Sun's editorial on retired city police and firefighter benefits is wrong and incredibly mean-spirited ("A costly pension benefit," editorial, Oct. 23). Let's start with some basics. All city employees, except police and firefighters, earn for their years with the city both a city pension benefit and Social Security. Police and firefighters do not get Social Security benefits. The only pension benefits they get for their years with the city come from the Fire and Police Retirement System, which is funded in part by their own contributions.

Baltimore officials say they need to eliminate a long-standing benefit to thousands of Fire and Police Department retirees because the volatile stock market is forcing a huge increase in the city's contribution to their pension fund when its budget is already strained. The police and fire pension fund is causing an extra drag on Baltimore's budget because of an unusual benefit. In addition to the regular fixed annuity that guarantees retired officers a percentage of their final salary for life, it provides increases in years when the stock market exceeds expectations.

The city of Annapolis has agreed to give more than $1 million a year in increased pensions to retired police officers and firefighters, resolving a six-year legal dispute, city officials said yesterday. Last year, the Maryland Court of Appeals sided with a group of 62 retired firefighters and officers who demanded pension increases commensurate with pay raises given to current employees. Mayor Ellen O. Moyer cautioned that the settlement offers and future pension raises could eventually drain the city's pension fund.