MASSENA — A decision by Alcoa to terminate life insurance policies for its retirees has resulted in a class action lawsuit against the company.
The United Steelworkers announced Thursday that they had filed a lawsuit in the Southern District of Indiana to protest Alcoa’s decision to terminate life insurance benefits for approximately 8,900 union-represented retirees.
Alcoa had announced in a Dec. 4 news release that the company was taking actions to “reduce liabilities and volatility risk from pensions and other postemployment benefits (OPEB).”
The move, they said, was “in alignment with Alcoa’s strategic priorities, including making balance sheet improvements, and will reduce the company’s pension.”
According to the news release, life insurance coverage for certain retirees will end effective Dec. 31, with the company providing a one-time, discretionary cash payment of about $15 million to affected retirees. Company officials said about 8,900 retirees would receive their portion of the discretionary payment this month, as well as information about coverage conversion options.
Local Alcoa retirees met Friday afternoon at the United Steelworkers hall to receive more information, ask questions and share their thoughts about Alcoa’s announcement.
The meeting was held a day after the United Steelworkers said they had filed the class action lawsuit in the Southern District of Indiana. Three Alcoa retirees joined as proposed class representatives, and the Wenatchee Aluminum Trades Council, a coalition of unions representing workers at a Washington state Alcoa facility is also a plaintiff.
United Steelworkers officials said in a news release that the letter received by retirees included a check “equal to a fraction of the face value of their life insurance coverage and a federal 1099 tax form, since the payment would be taxable.”
“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.”
“Families rely on the contractual death benefit to assist with funeral and other expenses,” Mike Millsap, director of United Steelworkers District 7 and chair of the United Steelworkers’s Alcoa bargaining committee, said in a statement. “It is deeply disturbing that Alcoa would show so little respect for its retirees, many of whom devoted decades of work helping the company grow and thrive.”
Union officials said they’re also studying other announcements that the company made regarding the health care benefits for certain retirees effective in 2021.