PBGC to Protect Pension Benefits of 10,000 Outboard Marine Corp. Employees
FOR IMMEDIATE RELEASE
February 27, 2001
The Pension Benefit Guaranty Corporation (PBGC) today announced it is taking over the underfunded pension plan covering more than 10,000 people who worked for Outboard Marine Corp., Waukegan, Ill., a manufacturer of recreational boats and engines now in bankruptcy liquidation.
"PBGC is acting because the plan faces abandonment after the company liquidates," said John Seal, Acting Executive Director of PBGC. "Because the plan is PBGC-insured, most of the retirement benefits for over 10,000 Outboard Marine workers are protected, and monthly checks for those already retired will continue without interruption."
The Outboard Marine Corp. Employees' Retirement Plan, with assets of about $454 million to cover benefit liabilities totaling around $527 million, is underfunded by $73 million according to PBGC estimates.
The plan will be terminated effective February 28, 2001. Under federal pension law, the maximum pension guaranteed for workers in plans that terminate in 2001 is $3,392.05 a month (or $40,704.60 a year) for persons retiring at age 65. Maximum guarantees are adjusted for retirees at other ages or those who elect survivor benefits. Initially, PBGC will continue payments to Outboard Marine retirees at current levels. Within a few months, after a preliminary review of the plan, PBGC will notify affected retirees if it has to reduce payment of certain supplements and benefit improvements because the additional amounts may not be fully guaranteed.
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 also has a special page on its Web site, with information pertaining to the Outboard Marine plan.
Outboard Marine had operations in Illinois, Wisconsin, North and South Carolina, Georgia, Florida, Michigan, Tennessee, Indiana, Oregon, Washington, Texas, and New Jersey, plus other locations abroad.
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 more than 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 by PBGC's investment returns.
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PBGC No. 01-21