PBGC Pension Protection for Former Raymark Workers
FOR IMMEDIATE RELEASE
December 14, 1999
The Pension Benefit Guaranty Corporation (PBGC) has won a court decision that will protect the pensions of 1500 former workers of the bankrupt Raymark Industries Corporation, which had facilities in Connecticut, Pennsylvania, Indiana, South Carolina and North Carolina.
"This is a victory for the workers and retirees who can now look forward to receiving all of the pension benefits for which they worked long and hard," said PBGC Executive Director David M. Strauss.
Raymark, which is being liquidated, was formerly Raybestos-Manhattan, Inc., a manufacturer of automotive parts, including asbestos-containing products. In the 1980's, Raymark created Raytech Corporation. Raytech acquired Raymark's profitable assets while leaving Raymark with asbestos related liabilities and two pension plans that are now underfunded by about $19 million.
PBGC contended that the restructuring was a scheme intended to defraud Raymark's creditors. In a summary judgment decision issued last week, the U.S. Bankruptcy Court in Bridgeport, Conn. agreed with PBGC and ordered Raytech, which is in the process of being reorganized, to take full responsibility for the two pension plans.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by about 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. 00-10