X » Topics » Our retiree employee health care and retiree life insurance plan costs, most of which are unfunded obligations, and our pension plan costs in North America are higher than those of many of our competitors. These plans create a competitive disadvantage and

These excerpts taken from the X 10-K filed Feb 24, 2009.

Our retiree employee health care and retiree life insurance plan costs, most of which are unfunded obligations, and our pension plan costs in North America are higher than those of many of our competitors. These plans create a competitive disadvantage and negatively affect our profitability and cash flow.

 

We maintain defined benefit retiree health care and life insurance and defined benefit and defined contribution pension plans covering most of our North American employees and former employees upon their retirement. As of December 31, 2008, approximately 130,000 current employees, retirees and beneficiaries are participating in the plans to receive pension and/or medical benefits. At December 31, 2008, U. S. Steel’s benefit obligations for retiree medical and life insurance exceeded trust assets by $3.1 billion, an increase of $210 million from the amount at the end of 2007. The funded status of the projected pension benefit obligation decreased from a net overfunded position of $223 million at year-end 2007 to a net underfunded position of $2.0 billion at year-end 2008.

 

Most of our other benefits and pension benefits are subject to collective bargaining agreements with unionized workforces and will be subject to future negotiations. Minimum contributions to domestic qualified pension plans are controlled under ERISA and other government regulations. Minimum contributions to USSC pension plans are governed by an agreement entered into by Stelco and the Province of Ontario that U. S. Steel assumed in conjunction with the acquisition of Stelco. This agreement requires defined annual contributions until the earlier of full solvency funding for the four main plans or until December 31, 2015, when minimum funding requirements for the plans resume under the provincial pension legislation. Substantial cash contributions may be required to fund other benefits and pensions. Total costs for pension plans and other benefits are expected to be approximately $380 million in 2009, an increase of $153 million from 2008.

 

Many domestic and international competitors do not provide defined benefit retiree health care and life insurance and pension plans, and other international competitors operate in jurisdictions with government sponsored health care plans that may offer them a cost advantage. Benefit obligations under our plans are not tied to operating rates; therefore, our costs are not expected to decline as a result of the current global recession or any other future economic downturns.

 

U. S. Steel contributes to a multiemployer plan in the United States covering pensions for USW-represented workers formerly employed by National Steel and workers hired after May 2003. We have legal and contractual requirements for future funding of this plan, which will have a negative effect on our cash flows. The collective bargaining agreements with the USW entered into effective September 1, 2008 (the 2008 CBAs) increased our required contributions to this plan from $1.80 to $2.65 per hour worked. In addition, funding requirements for participants could increase as a result of any underfunding of this plan.

 

The recent turmoil in financial markets has led to significant declines in the value of equity investments that are held by the trusts under our pension plans and the trust to pay for retiree health care and life insurance benefits, which has contributed to the underfunded position at December 31, 2008. Since the Pension Protection Act of 2006 was enacted, U. S. Steel has not been required to make mandatory contributions to our main U.S. pension plan. Such contributions may be required in the future.

 

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Our retiree employee health care and retiree life insurance plan costs, most of which are unfunded obligations, and our pension plan costs in North America are
higher than those of many of our competitors. These plans create a competitive disadvantage and negatively affect our profitability and cash flow.

 

STYLE="margin-top:0px;margin-bottom:0px">We maintain defined benefit retiree health care and life insurance and defined benefit and defined contribution pension plans covering most of our North American employees and
former employees upon their retirement. As of December 31, 2008, approximately 130,000 current employees, retirees and beneficiaries are participating in the plans to receive pension and/or medical benefits. At December 31, 2008, U. S.
Steel’s benefit obligations for retiree medical and life insurance exceeded trust assets by $3.1 billion, an increase of $210 million from the amount at the end of 2007. The funded status of the projected pension benefit obligation
decreased from a net overfunded position of $223 million at year-end 2007 to a net underfunded position of $2.0 billion at year-end 2008.

 

STYLE="margin-top:0px;margin-bottom:0px">Most of our other benefits and pension benefits are subject to collective bargaining agreements with unionized workforces and will be subject to future negotiations. Minimum
contributions to domestic qualified pension plans are controlled under ERISA and other government regulations. Minimum contributions to USSC pension plans are governed by an agreement entered into by Stelco and the Province of Ontario that U. S.
Steel assumed in conjunction with the acquisition of Stelco. This agreement requires defined annual contributions until the earlier of full solvency funding for the four main plans or until December 31, 2015, when minimum funding requirements for
the plans resume under the provincial pension legislation. Substantial cash contributions may be required to fund other benefits and pensions. Total costs for pension plans and other benefits are expected to be approximately $380 million in 2009, an
increase of $153 million from 2008.

 

Many domestic and international competitors do not
provide defined benefit retiree health care and life insurance and pension plans, and other international competitors operate in jurisdictions with government sponsored health care plans that may offer them a cost advantage. Benefit obligations
under our plans are not tied to operating rates; therefore, our costs are not expected to decline as a result of the current global recession or any other future economic downturns.

SIZE="1"> 

U. S. Steel contributes to a multiemployer plan in the United States covering pensions for USW-represented workers formerly employed by
National Steel and workers hired after May 2003. We have legal and contractual requirements for future funding of this plan, which will have a negative effect on our cash flows. The collective bargaining agreements with the USW entered into
effective September 1, 2008 (the 2008 CBAs) increased our required contributions to this plan from $1.80 to $2.65 per hour worked. In addition, funding requirements for participants could increase as a result of any underfunding of this plan.

 

The recent turmoil in financial markets has led to significant declines in the value of
equity investments that are held by the trusts under our pension plans and the trust to pay for retiree health care and life insurance benefits, which has contributed to the underfunded position at December 31, 2008. Since the Pension
Protection Act of 2006 was enacted, U. S. Steel has not been required to make mandatory contributions to our main U.S. pension plan. Such contributions may be required in the future.

SIZE="1"> 


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These excerpts taken from the X 10-K filed Feb 27, 2008.

Our retiree employee health care and retiree life insurance plan costs, most of which are unfunded obligations, and our pension plan costs in North America are higher than those of many of our competitors. These plans create a competitive disadvantage and negatively affect our profitability and cash flow.

 

We maintain defined benefit retiree health care and life insurance and defined benefit and defined contribution pension plans covering most of our North American employees and former employees upon their retirement. As of December 31, 2007, approximately 134,000 current employees, retirees and beneficiaries are participating in the plans to receive pension and/or medical benefits. U. S. Steel’s benefit obligations for retiree medical and life insurance (other benefits) exceeded trust assets by $2.9 billion at year-end 2007. Of this underfunding, $1.1 billion was assumed with the Stelco acquisition. Most of our other benefits and pension benefits are subject to collective bargaining agreements with unionized workforces and will be subject to future negotiations. Minimum contributions to the main qualified pension plan are controlled under ERISA and other government regulations. In connection with the Stelco acquisition, U. S. Steel guaranteed Stelco’s pension funding obligations under an agreement entered into by Stelco and the Province of Ontario. In 2008, contributions totaling $78 million will be required under this agreement. The net underfunded status of our Canadian defined benefit pension plans at December 31, 2007 was $347 million. Substantial cash contributions will be required to fund other benefits and pension benefits. Total costs for pension plans and other benefits are expected to be approximately $200 million in 2008.

 

Many domestic and international competitors do not provide defined benefit retiree health care and life insurance and pension plans, and other international competitors operate in jurisdictions with government sponsored health care plans that may offer them a cost advantage. Several domestic competitors provide defined contribution health care and pension plans with contributions increased based upon profitability. This will provide these competitors with a significant competitive advantage during periods of low profits.

 

U. S. Steel contributes to a multiemployer plan in the United States covering pensions for USW represented workers formerly employed by National Steel and workers hired after May 2003. We have legal and contractual requirements for future funding of this plan, which will have a negative effect on our cash flows. In addition, funding requirements for participants could increase as a result of any underfunding of this plan.

 

Our retiree employee health care and retiree life insurance plan costs, most of which are unfunded obligations, and our pension plan costs in North America are
higher than those of many of our competitors. These plans create a competitive disadvantage and negatively affect our profitability and cash flow.

 

STYLE="margin-top:0px;margin-bottom:0px">We maintain defined benefit retiree health care and life insurance and defined benefit and defined contribution pension plans covering most of our North American employees and
former employees upon their retirement. As of December 31, 2007, approximately 134,000 current employees, retirees and beneficiaries are participating in the plans to receive pension and/or medical benefits. U. S. Steel’s benefit
obligations for retiree medical and life insurance (other benefits) exceeded trust assets by $2.9 billion at year-end 2007. Of this underfunding, $1.1 billion was assumed with the Stelco acquisition. Most of our other benefits and pension benefits
are subject to collective bargaining agreements with unionized workforces and will be subject to future negotiations. Minimum contributions to the main qualified pension plan are controlled under ERISA and other government regulations. In connection
with the Stelco acquisition, U. S. Steel guaranteed Stelco’s pension funding obligations under an agreement entered into by Stelco and the Province of Ontario. In 2008, contributions totaling $78 million will be required under this agreement.
The net underfunded status of our Canadian defined benefit pension plans at December 31, 2007 was $347 million. Substantial cash contributions will be required to fund other benefits and pension benefits. Total costs for pension plans and other
benefits are expected to be approximately $200 million in 2008.

 

Many domestic and
international competitors do not provide defined benefit retiree health care and life insurance and pension plans, and other international competitors operate in jurisdictions with government sponsored health care plans that may offer them a cost
advantage. Several domestic competitors provide defined contribution health care and pension plans with contributions increased based upon profitability. This will provide these competitors with a significant competitive advantage during periods of
low profits.

 

U. S. Steel contributes to a multiemployer plan in the United
States covering pensions for USW represented workers formerly employed by National Steel and workers hired after May 2003. We have legal and contractual requirements for future funding of this plan, which will have a negative effect on our cash
flows. In addition, funding requirements for participants could increase as a result of any underfunding of this plan.

 

STYLE="margin-top:0px;margin-bottom:0px">We have higher environmental remediation costs than our competitors. This creates a competitive disadvantage and negatively affects our profitability and cash flow.

 

U. S. Steel is involved in numerous remediation projects at currently operating
facilities, facilities that have been closed or sold to third parties and other sites where material generated by U. S. Steel was deposited. In addition, there are numerous other former operating or disposal sites that could become the
subject of remediation.

 

Environmental remediation costs and related cash requirements of
many of our competitors may be substantially less than ours. Many international competitors do not face similar laws in the jurisdictions where they operate. Many U.S. competitors have substantially shorter operating histories than we do, resulting
in less exposure for environmental remediation. Competitors that have obtained relief under bankruptcy laws may have been released from certain environmental obligations that existed prior to the bankruptcy filing.

STYLE="margin-top:0px;margin-bottom:0px"> 


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This excerpt taken from the X 10-K filed Feb 27, 2007.

Our retiree employee health care and retiree life insurance plan costs, most of which are unfunded obligations, and our pension plan costs in the U.S. are higher than those of many of our competitors. These plans create a competitive disadvantage and negatively affect our profitability and cash flow.

 

We maintain defined benefit retiree health care and life insurance and defined benefit and defined contribution pension plans covering most of our U.S. employees and former employees upon their retirement. As of December 31, 2006, approximately 109,000 current employees, retirees and beneficiaries are participating in the plans to receive pension and/or medical benefits. U. S. Steel’s underfunded benefit obligations for retiree medical and life insurance (other benefits) were $2.2 billion at year-end 2006. Most of our other benefits and pension benefits are subject to collective bargaining agreements with unionized workforces and will be subject to future negotiations. Minimum contributions to the main qualified pension plan are controlled under ERISA and other government regulations. Substantial cash contributions will be required to fund other benefits and pension benefits. Total costs for pension plans and other benefits are expected to be approximately $237 million in 2007.

 

Many domestic and international competitors do not provide defined benefit retiree health care and life insurance and pension plans, and other international competitors operate in jurisdictions with government sponsored health care plans that may offer them a cost advantage. Several domestic competitors provide defined contribution health care and pension plans with contributions increased based upon profitability. This will provide these competitors with a significant competitive advantage during periods of low profits.

 

U. S. Steel contributes to a multiemployer plan covering pensions for unionized workers. We have legal and contractual requirements for future funding of this plan, which will have a negative effect on our cash flows. In addition, funding requirements for participants could increase as a result of any underfunding of this plan.

 

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This excerpt taken from the X 10-K filed Feb 28, 2006.

Our retiree employee health care and retiree life insurance plan costs, most of which are unfunded obligations, are higher than those of many of our competitors. These plans create a competitive disadvantage and negatively affect our profitability and cash flow.

 

We maintain defined benefit retiree health care and life insurance plans covering most of our domestic employees and former employees upon their retirement. As of December 31, 2005, approximately 114,000 current retirees and beneficiaries are receiving pension and/or medical benefits. U. S. Steel’s underfunded benefit obligations for retiree medical and life insurance were $2.3 billion at year-end 2005. Most of these underfunded obligations are subject to collective bargaining agreements with unionized workforces and will be subject to future negotiations. Other postretirement benefit expense is expected to be approximately $111 million in 2006.

 

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Many domestic and international competitors do not provide defined benefit retiree health care and life insurance plans and other international competitors operate in jurisdictions with government sponsored health care plans that may offer them a cost advantage. Several domestic competitors provide defined contribution health care plans with contributions increased based upon profitability. This will provide these competitors with a significant competitive advantage during periods of low profits.

 

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