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.
PBGC will pay retirement benefits for more than 1,300 current and future retirees of Findlay Industries.
Based in Findlay, Ohio, Findlay Industries was a privately owned company established in 1959 that once manufactured interior parts for the automotive and heavy truck industries.
The firm had manufacturing operations in Ohio, Virginia, Michigan, Florida, Canada and Mexico.
In late 2008, More...
PBGC will pay retirement benefits for more than 1,300 current and future retirees of RG Steel, the nation's fourth-largest flat-rolled steel producer with steelmaking facilities located in Sparrows Point, Md.; Warren, Ohio, and Wheeling, W.Va. Additional finishing facilities are in Yorkville and Martins Ferry, Ohio.
RG Steel and its seven affiliates are liquidating in bankruptcy. PBGC has trusteed the two pension plans RG sponsored - the RG Steel Warren, LLC Hourly Employees Pension Plan ("Warren Plan") and the RG Steel Wheeling, LLC Pension Plan ("Wheeling Plan").
In bankruptcy, RG Steel has sold practically all of its assets. Most of the buyers are liquidators, none of which assumed the pension plans. PBGC initiated termination because of RG Steel's liquidation in bankruptcy and the forthcoming abandonment of the pension plans. More...
A commonly asked question is how does PBGC determine how much a retiree receives? There's no simple explanation. The short answer is it's sort of complicated. The longer, more detailed answer is that the amount a retiree receives is dependent on a multitude of factors specified by law, one of which is the maximum guarantee limit, which is adjusted yearly.
Common Misconception: The guarantee limit is often misunderstood to be the maximum benefit PBGC can pay retirees. However, that is not the case.
In many cases retirees receive benefits from PBGC in excess of the maximum guarantee. Whether a retiree receives more than the guarantee depends on a number of factors, including:
1. What the retiree's earned benefit was before the plan terminated
2. How long they've been retired when PBGC takes over
3. The plan's funded status at termination
4. Whether any other limitations apply
FACT: According to a 2006 study, about 85% of retirees who get their pension from PBGC receive their entire earned benefit.
FACT: The guarantee is lower for those who retire early or when there is a benefit for a survivor.
FACT: The guarantee is increased for those who retire after age 65.
Find out more about the 2013 maximum insurance benefit.
Often times, people don't know what the Pension Benefit Guaranty Corporation (PBGC) is, or what we do. Unfortunately, many find out about us when we have to assume responsibility for their pension plans either by way of company bankruptcy or the company's inability to pay retirement benefits.
A quick history lesson: On September 2, 1974, President Ford signed the Employee Retirement Income Security Act (ERISA), creating a federal pension insurance program and an agency — the Pension Benefit Guaranty Corporation — to run it. The agency was created to encourage the continuation and maintenance of private-sector defined benefit pension plans, provide timely and uninterrupted payment of pension benefits, and keep pension insurance premiums at a minimum.
Now that you know how we got started, we'd like to tell you a little about how we operate.
As our director Josh Gotbaum likes to put it, PBGC is similar to the FDIC, but instead of protecting depositors of insured banks, we protect pensions.
FACT: We protect the retirement incomes of more than 44 million American workers in more than 27,500 private-sector defined benefit pension plans.
So, what's a defined benefit plan?
FACT: A defined benefit plan provides a specified monthly benefit at retirement, often based on a combination of salary and years of service.
FACT: We are not funded by general tax revenues.
So, how is the revenue generated?
FACT: We collect insurance premiums from employers that sponsor insured pension plans, earn money from investments, and receive funds from pension plans we take over.
Visit our Web site to learn more about who we are and how we operate.