PBGC protects pensions. So, what is a pension? To most people, a pension is a retirement arrangement in which your employer promises you a regular payment from the day you retire, for as long as you live. The amount of your pension usually depends on how long you worked for an employer and your salary with that employer. Ask a retiree, "What is a pension?" and they may say,
"A pension is the $400 per month I receive for my many years of service at Acme Widgets. My pension helps to supplement the $600 per month I receive from Social Security and my retirement savings."
Normally, employees must work for an employer for a certain time period before the benefits they have earned belong to them. After they have done so, they are considered "vested" in those benefits. Today, in some pension plans, you are fully vested after five years on the job. In others, it takes you seven years to become fully vested - but you become vested in increasing portions of your benefit starting at three years. If you've worked for more than one company long enough to become vested in multiple pension plans, you can receive more than one pension payment.
PBGC will pay retirement benefits for more than 1,500 current and future retirees of Metavation LLC, an auto parts supplier based in Southfield, Mich.
The agency is stepping in because the company's parent, Revstone Transportation LLC, is selling its ownership interest. The transaction will further compromise Metavation's underfunded pension plans, which will be unable to pay retirement benefits.
Formally known as Hillsdale Automotive LLC until 2008, Metavation sponsors two pension plans: the Hillsdale Salaried Pension Plan and the Hillsdale Hourly Pension Plan. Both plans will end as of March 1, 2013.
PBGC will pay all pension benefits earned by the company's retirees up to the legal limit of about $57,500 a year for a 65-year-old.
Until PBGC becomes trustee, the plan remains under Metavation's control. Plan participants will be notified by letter when the agency takes responsibility. At that time, retirees will continue to get benefits without interruption, and future retirees can apply for benefits when eligible.
Metavation makes powertrain and chassis components for the automotive industry. The company also provides other parts for engines, drivelines, and transmissions.
According to PBGC estimates based on information provided by Metavation, the plan is 50 percent funded with $47 million in assets to pay $93 million in benefits. The agency is expected to cover most of the $46 million shortfall.
Participants with questions about their pension benefits should contact the plan administrator. The agency won't be able to address concerns about benefits until it takes responsibility for the plan.
From Sandy Rich, Chief of Negotiations and Restructuring:
Beechcraft, previously known as Hawker Beechcraft, emerged from bankruptcy February 21. Despite the company's original plan to terminate three pension plans, we at PBGC were able to work with the company, its employees, and company creditors to preserve one of the three plans while providing the safety net of PBGC trusteeship to the two terminated pension plans.
Beechcraft will continue a pension plan that will provide benefits to 8,300 participants. PBGC will provide guaranteed level benefits to the 9,500 beneficiaries of the terminated plans. In addition, PBGC supported a $2.5 million settlement with Beechcraft that will provide salaried retirees additional benefits exceeding those paid by PBGC under rules set by Congress.
If you receive a direct deposit payment from PBGC, your funds will be deposited on January 2, 2013, one day after the New Year. If you receive a paper check, and you have not received your paper check by January 7, call us at 1-800-400-7242 or visit our Contact Us page for other contact options.
Want to receive future payments more quickly? Remember, PBGC offers direct deposit. It's the most secure and fastest way to receive your payment, and your funds are always available on payday — even if the weather's bad, the post office is closed, or you're out of town. The future electronic direct deposit dates are already mapped out!
To learn more or sign up for direct deposit, call 1-800-400-7242 or visit MyPBA.