PBGC to Protect Pension Benefits of Over 3,100 in Forstmann Plans
FOR IMMEDIATE RELEASE
September 11, 2000
The Pension Benefit Guaranty Corporation (PBGC) today announced it is taking over two underfunded pension plans covering hourly and salaried employees of Forstmann & Co., Inc., a bankrupt textile concern.
"PBGC is acting because these underfunded pensions faced abandonment after the company went out of business," said PBGC Executive Director David M. Strauss. "As a result of PBGC's action, the retirement benefits of over 3,100 Forstmann workers are protected, and those already retired will continue to receive their pension checks without interruption."
According to PBGC estimates, the pension plans were underfunded by about $4 million, with combined assets of around $27 million and benefit liabilities of more than $31 million. Most of the covered employees worked at Forstmann's manufacturing plants in Dublin, Louisville and Milledgeville, Georgia. The company maintained corporate offices in New York City.
Virtually all workers and retirees will receive the same benefits they are now receiving or would be entitled to receive under the plans, which PBGC intends to terminate as of November 5, 1999, the date Forstmann ceased operations. The maximum pension guaranteed for workers in plans that terminate in 1999 is $3,051.14 a month (or $36,613.68 a year) for persons retiring at age 65 or later. 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 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. 00-38