US - The Pension Benefit Guaranty Corporation (PBGC) has taken on responsibility for the pensions of more than 6000 workers and retirees of the bankrupt Amcast Industrial Corporation's merged pension plan.
According to PBGC estimates, the Ohio company’s plan is 47% funded, with US$77m in assets to cover $166m in benefit promises to the 6,200 members. The PBGC will also be liable for $83m of the $89m shortfall.
A spokesman for PBGC commented that workers covered by the Amcast’s merged pension plan would receive their pension benefits “up to the limits set by law”.
The spokesman said: “Retirees will continue to receive monthly benefit checks without interruption, and other workers will receive their pensions when eligible to retire. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2005 is $45,614 per year.
“The maximum guaranteed amount is lower for those who retire earlier or elect survivor benefits. In addition, certain early retirement subsidies and benefit increases made within the past five years may not be fully guaranteed.”
Amcast, a manufacturer of auto parts, filed for Chapter 11 bankruptcy protection in November last year, and applied to terminate its pension plan in March.
But after legal and financial review, the PBGC determined that the company and its subsidiaries met all criteria under federal law to transfer its pension liabilities to the pension insurance program.
Now, over the next few months, the PBGC will send trusteeship notification letters to all participants in the Amcast Industrial pension plan.
PBGC has also said that Amcast retirees who draw a benefit from the federal agency may even be eligible for the federal health coverage tax credit.
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