US - The Pension Benefit Guaranty Corporation (PBGC) has taken on the pension plan of bankrupt auto-part manufacturer Collins & Aikman Corp.
The Collins & Aikman Pension Plan has 21,000 members and is 58% funded, with US$253m in assets to cover $434m in benefit liabilities. The PBGC has stated it expects to be liable for around $161m of the $181m shortfall.
The company has already missed $7.6m in required contributions and will abandon the pension plan when it sells off its assets as part of bankruptcy proceedings.
The PBGC, which has an $18.1bn shortfall itself, claimed taking on the plan would have “no material effect on the PBGC’s balance sheet, as an estimate of the liability was included in its fiscal 2006 financial statements”.
Last November, the American Benefits Council (ABC) called on the PBGC to use "more reasonable" market-based assumptions when calculating deficits, and to increase its equity allocation.
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