PBGC to Protect Retirement Benefits of Former McCulloch Workers
FOR IMMEDIATE RELEASE
October 07, 1999
The Pension Benefit Guaranty Corporation (PBGC) today announced it has taken over the underfunded pension plan of privately-held McCulloch North America, Inc., Tucson, Ariz., a bankrupt former maker of chain saws and related tools.
"PBGC is acting because the pensions are underfunded by about $7 million and the company is liquidating," said PBGC Executive Director David M. Strauss. "As a result of PBGC's action, the retirement benefits of nearly 2,000 McCulloch workers and retirees are protected. And we will make sure that those already retired will continue to receive their checks without interruption."
McCulloch ceased operations and began liquidation in January 1999. The firm sponsored a pension plan that had total assets of about $32 million to cover total liabilities of almost $39 million. By agreement between PBGC and the plan administrator, the plan terminated effective October 29, 1997, the date specified by the company in a letter telling participants of its intent to end the plan. When a pension plan ends, workers stop earning pension benefits.
Nearly all workers, except for a few highly compensated individuals, are expected to receive full benefits from PBGC. The maximum pension benefit guaranteed for workers in plans that terminated in 1997 is $2,761.36 a month (or $33,136.32 a year) for persons who retire at age 65 or older. The amount is adjusted based on the actual retirement age and the form of benefit elected.
Workers and retirees do not need to take any action. Anyone with questions about benefits or wishing to retire may contact PBGC's Customer Service Center toll-free at 1-800-400-7242. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to 800-400-7242.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by some 42 million American workers and retirees participating in more than 44,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and investment returns.
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PBGC No. 00-01