By Marilyn Odendahl, Elkhart Truth

ELKHART -- Breaking a sustained silence since its contract offer was rejected by Vincent Bach workers, Steinway Musical Instruments Inc. sought to clarify a sticking point with worker pensions.

Dennis Hanson, general counsel and chief financial officer for Steinway, said he wanted to set the record straight because pensions are such a "high-visibility topic."

In previous reports, Vincent Bach employees, represented by United Auto Workers Local 364, said they voted down the company's contract offer, in part, because under the proposed contract the pension plan would have been frozen.

Hanson, however, countered that the company did not freeze the plan but rather did not increase the amount paid per year of service.

Within the Vincent Bach pension plan, the monthly benefit paid upon retirement is calculated taking the number of years a worker has been at the plant and multiplying it by a certain dollar amount.

Typically, said union President Jerry Stayton, that amount has increased slightly with each contract but this contract did not include such an increase in the dollar amount. Still, the number of years an employee worked was allowed to continue accruing.

In a frozen pension plan, both parts -- the number of years of service and the amount -- cease to increase.

Hanson said the dollar amount was not increased in the contract in order to help the company remain "economically competitive."

Non-union employees, along with salaried employees at Steinway subsidiary Conn-Selmer, are not covered by pension plans. They have the option of participating in the company's 401(k) plan, to which the company contributes.

Stayton said in the last contract negotiations, Steinway tried to moved the Vincent Bach workers into a 401(k) but the union was able to keep the pensions. He conceded that pensions become vulnerable if a company declares bankruptcy but said pensions are advantageous over 401(k)s because the money is always there in the plan and workers cannot withdraw funds until they retire.

Conn-Selmer and the union's bargaining committee did meet briefly last Wednesday but since that time, no new talks have been scheduled.

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