PBGC to Protect Retirement Benefits of 4,600 Former Northwestern Steel Employees
FOR IMMEDIATE RELEASE
September 04, 2001
The Pension Benefit Guaranty Corporation (PBGC) today announced it is taking over the underfunded pension plans of bankrupt Northwestern Steel and Wire Co., Sterling, Ill., a producer of structural steel and related products.
"PBGC is acting because these plans are underfunded by about $160 million and face abandonment as the company liquidates," said John Seal, Acting Executive Director of PBGC. "As we protect the pensions of more than 4,600 Northwestern Steel workers, we will make sure there is no interruption in checks for retirees and that those not yet retired will receive their pensions when they become eligible."
Northwestern Steel filed for bankruptcy on December 19, 2000. The company sponsored one pension plan for hourly employees and another for salaried employees. Together, the plans had assets of nearly $311 million to cover benefit liabilities of around $470 million according to PBGC estimates. The plans were terminated effective August 28, 2001.
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. The amounts are adjusted for retirees at other ages or those who elect survivor benefits. PBGC's pension guarantee does not include health and welfare benefits, severance and vacation pay, life insurance or the special vacation-pay related benefit provided under the Northwestern Steel plans.
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's Web site, www.pbgc.gov, provides a link to further information on Northwestern Steel pensions.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by more than 43 million American workers and retirees participating in private-sector defined benefit pension plans. PBGC insures nearly 38,000 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. 01-32