The United Steelworkers of America yesterday approved a new contract with bankrupt LTV Steel that will restore retirees' full pension benefits under a plan that combines a large subsidy from the government's Pension Benefit Guaranty Corp. and a much smaller contribution of company funds.

By a 57 percent to 43 percent tally, the union agreed to accept a freeze in wages and benefits, a reduction in the work force through attrition and a new pension plan for active workers.

In exchange, members voted to restore $400 a month in supplemental benefits promised to 8,000 workers who retired early.

"We are pleased that we can now relieve our retirees of the financial hardships they have suffered since the Pension Benefit Guaranty Corp. moved to terminate our pension plans earlier this year," said David H. Hoag, LTV Steel president and chief executive officer. Many LTV retirees are entitled to more than $2,200 a month, but the maximum monthly amount PBGC can pay is $1,858.

PBGC'S Executive Director Kathleen P. Utgoff last week accused LTV of using the government insurance agency as a "corporate filling station. LTV wants to tank up at the PBGC and use premium payers' money {insurance premiums paid by other corporations} to compete in the steel industry." She expressed the fear that other financially troubled companies would unload their pension obligations on the insurance system, causing it to collapse. The agency has a deficit of $4 billion, much of which is due to the LTV liabilities it assumed.

A bankruptcy court in New York last month approved the labor pact with the steelworkers union. PBGC has filed an appeal in federal court to stay the bankruptcy court order, claiming it is illegal for the agency to subsidize an ongoing pension plan. A PBGC spokeswoman said yesterday the agency would press its appeal.

LTV Corp., LTV Steel's parent company, filed for reorganization in bankruptcy in July 1986. Thanks to relief from creditors accorded by the courts, cost cutting at LTV Steel and the passing of its pension debts to PBGC, LTV has had three successive quarters of operating profits. It expects to emerge from bankruptcy by the end of 1988. The $400 a month supplemental pensions for its retired workers will cost LTV about $73 million. By contrast, PBGC's claims against LTV for its dumped pension obligations amount to $2.3 billion.