PBGC To Protect Pension Benefits of 4,000 in Laclede Steel Plans
FOR IMMEDIATE RELEASE
January 26, 2001
The Pension Benefit Guaranty Corporation (PBGC) today announced it is taking over two underfunded pension plans covering hourly and salaried employees of Laclede Steel Co., St. Louis, which recently emerged from Chapter 11 bankruptcy.
"PBGC is acting because these plans are underfunded by $106 million and Laclede cannot continue financing them," said John Seal, Acting Executive Director of PBGC. "Because of pension insurance, the retirement benefits of nearly 4,000 Laclede workers and retirees are protected. For those already retired, we will make sure their pension checks continue without interruption."
Together, the two pension plans had assets of about $141 million to cover benefit liabilities of around $247 million, according to PBGC estimates. Under Laclede's court-approved plan of reorganization, the pension plans were terminated effective January 2, 2001, the date specified by the company in a letter telling participants of its intent to end the plans.
Most workers are expected to receive full benefits from PBGC. The maximum pension benefit guaranteed for workers in plans that terminated in 2001 is $3,392.05 a month (or $40,704.60 a year) for persons who retire at age 65. Maximum guarantees are adjusted for retirees at other ages or those who elect survivor 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.
The Chain Manufacturing Employees' Pension Plan and the Southern States Division Hourly Employees' Pension Plan remain ongoing under Laclede sponsorship, unaffected by today's announcement.
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. 01-20