Cincinnati, OH, Feb. 5--Retirees of Formica Corp. are mobilizing to fight a company decision to reduce a portion of their pensions that the company says were calculated incorrectly, according to the the Cincinnati Enquirer.
About 200 retirees plan to meet at 11 a.m. Monday at the Full Gospel Assembly Church in Loveland to organize and discuss strategy.
"We're going to fight. We have no choice," said Frank Ramsey, who retired in 1988 and said his monthly benefit is being cut $31.
The Evendale laminate maker last month notified about 440 of the 624 retirees under its defined-benefit pension plan that their benefits were calculated incorrectly.
The company, which is in the process of emerging from Chapter 11 bankruptcy reorganization, said an audit uncovered the miscalculations on pensions from 1985 to 1998.
American Cyanamid sold the company to a management-led group in 1985, and the company changed hands several times through 1998.
Most of the retirees receive two checks. One earned when American Cyanamid owned the company, which isn't affected by the recalculation, and a second from Formica, which is affected.
Not all the retirees were overpaid. The company said an analysis found 295 retirees receiving overpayments and another 145 getting underpayments. Formica says the overpayments total about $1 million and the underpayments about $500,000.
Besides recalculating the benefits, the company has told the retirees that it is required by law to recover overpayments and make up underpayments. Just how that will be handled remains unclear. The issues are complicated because it involves both the Internal Revenue Service and the federal bankruptcy court, a company spokesman said.
In letters to retirees, the company outlined an appeals process that they can use to challenge the decision. But that's little consolation to the retirees who think the company is reneging on commitments made when they retired.
John Hazlett, 63, of Loveland, took an early retirement buyout eight years ago based on what the company said his benefit would be. Hazlett, who suffers from emphysema, says his benefit is being cut by $91 a month.
"I've got no options. I guess I'll have to cut more corners," he said.
He said he knew retiring early reduced his pension, but he figured it was best considering his health problems.
If he had known the benefit was going to be cut, he said, he never would have retired. "They called us in and did the figuring (what the month benefit would be)," he said.
Don Peters, 78, of West Chester, retired in 1988 after 40 years with the company. He said he got no letter notifying him of the change. He discovered it, he said, when his February check arrived, and it was cut by $20.
"Yes, I'm bitter," he said.
Ramsey says the retirees are collecting money to hire a lawyer.
Paul Tobias, a Cincinnati employee rights lawyer, said there's a number of cases where retirees have sued their former employer when it unilaterally cuts benefits, but the Formica case poses an unusual situation.
"I don't know if there is a specific precedent in a case like this where a company says a mistake was made," he said.
