PBGC bails out Huffy Corporation plan
US - The Pension Benefit Guaranty Corporation (PBGC) has assumed responsibility for the pensions of 3,700 workers and retirees of the bicycle and sports equipment company Huffy Corporation, whose retirement plan ended as of 31 August.
The PBGC estimates it will be responsible for US$80m of the $80.7m shortfall. The plan is 47% funded, with $71.7m in assets to cover $152.4m in benefit promises.
Huffy filed for bankruptcy protection in October 2004 and announced its intention to seek termination of its underfunded pension plan in June 2005.
The PBGC files claims in bankruptcy against sponsors of underfunded pension plans for the full amount of the shortfall. In the Huffy bankruptcy, the PBGC has said it expects to recover between seven and nine million dollars of its claim.
The PBGC is already facing potential liabilities of $11.2bn following the decision of both Delta Air Lines and Northwest Airlines to file for bankruptcy 14 September.
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