MASSENA — To cash a check or not is the question facing Alcoa retirees.
Alcoa announced on Dec. 4 that it was terminating retiree life insurance benefits for 8,900 retirees, effective Dec. 31. The company included with the letter a check equal to what United Steelworkers officials say is a fraction of the face value of their life insurance coverage and a federal 1099 tax form, since the payment would be taxable.
“Life insurance coverage for certain retirees will end effective December 31, 2019, and the Company will provide a one-time, discretionary cash payment totaling approximately $15 million to those affected. Approximately 8,900 retirees will receive their portion of the discretionary payment in December, along with information coverage conversion options,” Alcoa officials said in a news release announcing the move.
They said the move was part of an effort “to reduce liabilities and volatility risk from pensions and postemployment benefits (OPEB).
However, in cashing the check, the retirees would waive any claims against Alcoa for life insurance coverage.
In a Jan. 31 update, United Steelworkers officials say they continue to fight to preserve the negotiated life insurance benefits.
“We negotiated these retiree life insurance benefits with the company, and they are a critical part of our collective bargaining agreements with Alcoa,” United Steelworkers International President Tom Conway said in a statement. “The company agreed to provide these benefits. Abruptly cutting off this coverage is not only immoral, it’s unlawful.”
United Steelworkers and retiree representatives filed a class action lawsuit against Alcoa in federal court on Dec. 19, asking the court to rule that Alcoa had no right to terminate company-provided life insurance, and to reinstate the life insurance through at least the term of the current collecting bargaining agreement.
On Jan. 14, the union and class representatives filed an emergency motion that asked the court to declare that cashing the checks does not waive any claims to retiree life insurance. However, union officials said there might not be a final court decision on the issue before Feb. 29, the deadline for cashing the checks.
“The Union is fighting to preserve the negotiated retiree life insurance benefits and the ability of retirees to receive the benefits to which they are entitled. The Union strongly believes that Alcoa had no right to terminate retiree life insurance benefits. The Union also believes that cashing Alcoa’s check does not waive your right to the benefits. Nevertheless, there is no guarantee that the Union will win,” they said.
“The choice of whether to cash the Alcoa life insurance check is yours. The Union and its attorneys have argued that it should not constitute a waiver of your rights. But the court may not agree. Decisions about your retirement and life insurance benefits should be made only after carefully considering your own financial needs and retirement plans,” they said.
Retirees with questions were advised to call the law firm of Feinstein Doyle Payne & Kravec, LLC, which is representing the union and class representatives in the lawsuit.