PBGC will pay retirement benefits for more than 4,500 current and future retirees at Reichhold Inc., a manufacturer of resins used for composites, based in Durham, N.C.
The agency is stepping in because the company plans to sell its assets in bankruptcy and the pension plan will be abandoned. The Reichhold Inc. Retirement Plan will end as of Oct. 17, 2014.
PBGC will pay all pension benefits earned by the plan's retirees up to the legal limit of about $59,320 a year for a 65-year-old.
Retirees will continue to get benefits without interruption, and future retirees can apply for benefits as soon as they are eligible.
Employees and retirees who are participants in the Reichhold plan will continue to receive benefits from the company until PBGC assumes responsibility.
According to PBGC estimates, the plan is 70 percent funded with $228 million in assets to pay $325 million in benefit liabilities. The agency is expected to cover $90 million of the $97 million shortfall.
On Sept. 30, 2014, Reichhold and three of its affiliates sought Chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Del. The company said in court papers that financiers Third Avenue Management, Black Diamond Capital Management, and J.P. Morgan Chase, which hold Reichhold's senior secured notes, intend to be the lead bidders for Reichhold's assets. An auction, sale hearing, and closing are slated for Dec. 19, 2014; Dec. 22, 2014; and January 30, 2015, respectively.
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