On Friday the Pension Benefit Guaranty Corp. announced for the third time this week that it would assume responsibility for a company’s pension plans.
In each case, the PBGC — created under the Employee Retirement Income Security Act of 1974 to guarantee payments of basic pension benefits — stressed that assumption of the plans would have no material effect on its own balance sheet.
The agency announced that it assumed responsibility for four underfunded pension plans covering almost 900 current and former employees of Kaiser Aluminum & Chemical, a subsidiary of Kaiser Aluminum. The plans were terminated last October; the PBGC became their trustee on December 29.
The four Kaiser plans are underfunded by a total of $9.5 million, the agency estimates, and have assets of $20.1 million to cover promised benefits totaling $29.6 million. The PBGC expects to be liable for $2.7 million of the shortfall.
Earlier this week, the PBGC assumed responsibility for the pensions of more than 1,100 former employees of Venture Holdings, a bankrupt maker of plastic automobile components. The agency stepped in because two Venture pension plans faced abandonment after the company, in liquidation, sold substantially all of its assets and no purchaser was willing to assume the plans.
The two Venture plans have a combined shortfall of $12.4 million, with total assets of $12.5 million and liabilities of $24.9 million.
Also this week, the PBGC assumed responsibility for the pensions of more than 900 former employees of bankrupt Foss Manufacturing, a maker of specialty nonwoven fibers. As with Venture Holdings, the Foss plan faced abandonment after the company, under Chapter 11 protection since September 2005, sold substantially all of its assets and no purchaser was willing to assume the plan.
The agency estimates that the Foss plan is 60 percent funded, with about $18 million in assets to cover almost $30 million in promised benefits. The PBGC will cover all but about $1.5 million of the nearly $12 million shortfall.