Outboard Marine, in Revised Move to End Pension Plan, Seeks Alternative to PBGC Trusteeship
FOR IMMEDIATE RELEASE
February 15, 2001
Outboard Marine Corp. has decided to explore arrangements with private insurers for ending its underfunded pension plan, the company confirmed with the Pension Benefit Guaranty Corp. (PBGC) by letter today. In such an arrangement, a designated insurance company would pay benefits to plan participants.
Outboard Marine's decision is a change from its February 7, 2001 letter to PBGC asking the agency to take over the plan as trustee. Due to the company's new move, PBGC has deferred immediate action towards trusteeship, leaving control of the plan with Outboard Marine while it pursues the private insurance alternative. Outboard Marine also told PBGC that the company's Board of Directors voted to amend the pension plan to eliminate certain benefits. The Board's vote, and its decision to move forward with the private insurance alternative, came on February 27, 2001, the day before PBGC's proposed date of plan termination.
As the pension plan continues with Outboard Marine, PBGC will suspend its actions on trusteeing the plan while the company will continue to: 1) administer the plan during this interim period; 2) try to find an alternative arrangement in the private sector for ending the plan; and 3) ensure payment of retirement benefits.
"If Outboard Marine's efforts are not successful, PBGC is fully prepared to move quickly to take over the plan and pay guaranteed benefits to covered workers," said John Seal, Acting Executive Director of PBGC.
The Outboard Marine Corp. Employees' Retirement Plan covers more than 10,000 people who worked for the company, a manufacturer of recreational boats and engines now in bankruptcy liquidation. Anyone with questions about benefits or wishing to retire should write to the Outboard Marine Corp. Employees' Retirement Plan Administrator at 100 Sea Horse Drive, Waukegan, IL 60085, or (beginning March 19, 2001 at 9:00 AM CST) call 847-689-7200 or toll-free 800-888-4662 and select the "OMC Estate" option.
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. 01-23