SENECA FALLS — ITT Goulds Pumps Inc. plans to transfer its $320 million hourly employee pension fund to an insurance company to invest and administer.
Affected current and retired employees of the 172-year-old manufacturing company on Fall Street were informed of the pension fund plan by a letter earlier this month. Three meetings with employees were also conducted Thursday and Friday to review the proposal and answer questions.
The pension plan affects not only current and former workers in Seneca Falls, but across the ITT companies involving 38 pension funds and 6,500 employees.
“This does not mean a termination of these pensions. We are transferring our obligations to an insurance company that is better able to handle a fund of this size,” said John Dobreski, benefits manager for ITT, speaking to a roomful of workers at The Gould Hotel Friday.
“Our intention is to transfer the fund from ITT to an insurance company in 2020 to take place January 2021. The benefits will be the same as we are now obligated to pay, only you will get your payment from an insurance company and not us,” Dobreski said. “Nothing changes other than that.”
He said ITT is now looking for proposals from insurance companies before deciding which one to contract with. The process of seeking proposals from insurance companies with enough assets and size to properly administer the pension fund will begin around April 30. The proposals will be received in July and vetted to ensure the company selected can meet the ITT requirements and provide all benefits now offered. Dobreski said a choice will be made in October, with more vetting to follow.
“We want to be sure there will be no lapse in the process as this transition takes place. We want it to go as smoothly as possible,’’ he said.
He said the federal Pension Benefits Guaranty Corporation will be part of the transition review and must give final approval for it to happen.
“If we don’t find a suitable company to do things the way we want them done and as specified in a contract, we will not move forward with this plan,’’ Dobreski said.
He added in the unlikely chance the benefits are reduced or the insurance company goes bankrupt, the state has the best protection plan for pensions in the nation. He said administrative fees will not be taken from pension checks and will be paid upfront by ITT as part of the contract.
“Administering the pension fund is expensive for us. We hire an outside firm to do it. These big insurance companies are better able to manage our assets than we are,’’ he said.
Paul Kelsey of Seneca Falls worked at Goulds for 47 years before retiring in 2016. He receives a pension payment and said after hearing the proposal explained that “it makes sense.’’
“The guarantees are there that the benefits won’t change. The only question is those who take a lump sum may not get as much as they think,’’ Kelsey said, noting health insurance benefits for retirees remains another issue.
Goulds Pumps was established here in 1848 and was the largest private employer in the county for many years, making pumps for a wide range of industrial, agricultural and home uses from its Fall Street plant.
Goulds was founded in an area of the old Seneca River known as “The Flats’’ and was family owned for many years until 1997, when it was acquired by International Telephone & Telegraph of White Plains for $815 million in cash. It is now a wholly-owned subsidiary of ITT Industries as part of its fluid technology division.