Retiree medical benefit plans and the impact of the bankruptcy filing of LTV Corp.

Abstract

In the past two decades, post-retirement medical benefit programs have become a significant feature in the benefits packages of many employers. Soaring medical costs and decreasing work forces have made it increasingly difficult for employers to pay for these programs, while at the same time, Congress has made it more difficult for employers to prefund them. The critical level of unfunded retiree medical liability faced by many companies was brought to prominence when LTV Corp., the nation's second largest steel producer, filed for bankruptcy reorganization and promptly terminated its retiree medical benefit plan.