PBGC Will Guarantee Pensions for Over 11,000 Singer Company Workers
FOR IMMEDIATE RELEASE
August 24, 2000
The Pension Benefit Guaranty Corporation (PBGC) today announced it is taking over the underfunded pension plan covering current and former U.S. employees of Singer Company N.V. and affiliated and predecessor companies. Singer, a Netherlands Antilles corporation that produces and distributes sewing machines and other consumer durables worldwide, is in bankruptcy reorganization and liquidating the U.S. subsidiary which sponsored the pension plan.
"As a result of PBGC's action, retirement benefits for more than 11,000 Singer workers are protected," said PBGC Executive Director David M. Strauss. "Over 8,000 of those workers are already retired, and their pension checks will continue without interruption."
The Sewing Salaried Employees Retirement Plan, with assets of $78 million and liabilities of $130 million, was underfunded by $52 million according to PBGC estimates. To settle all of PBGC's claims on behalf of the pension plan, Singer's plan of reorganization provides convertible preferred stock in the reorganized entity, valued at $17 million, plus a general unsecured claim for $35 million.
The pension plan terminates effective August 24, 2000. The maximum pension benefit guaranteed for workers in plans that terminate in 2000 is $3,221.59 a month (or $38,659.08 a year) for persons who retire at age 65 or older. The guarantee is lower for those who retire early or have survivor's benefits.
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 (ERISA) to guarantee payment of basic pension benefits earned by about 43 million American workers and retirees participating in nearly 40,000 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. 00-36