PBGC Takes Smith Corona Plan to Secure Pensions
FOR IMMEDIATE RELEASE
September 13, 2000
The Pension Benefit Guaranty Corporation (PBGC) today announced it has taken over the underfunded pension plan for salaried employees of Smith Corona Corporation, Cortland, N.Y., a bankrupt marketer of typewriters and related office products.
"PBGC is acting because the pensions are underfunded by about $6 million and the company can no longer support the pension plan," said PBGC Executive Director David M. Strauss. "As a result of PBGC's action, the retirement benefits of over 1,400 Smith Corona workers and retirees are protected. And we will make sure that those already retired will continue to receive their checks without interruption."
The Smith Corona Corporation Salaried Employees Retirement Plan had total assets of about $42 million to cover total liabilities of almost $48 million, according to PBGC estimates. The plan was terminated effective August 2, 2000, the date specified by the company in a letter telling participants of its intent to end the plan.
Nearly all workers are expected to receive full benefits from PBGC. The maximum pension benefit guaranteed for workers in plans that terminated 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.
Separately, Smith Corona had sponsored an hourly employees' pension plan that terminated in the company's 1996 bankruptcy reorganization. At that time PBGC took over the plan, which it continues to administer, guaranteeing retirement benefits for those workers up to limits for plans that terminated in 1996.
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.
— ### —
PBGC No. 00-39