PBGC to Protect Pension Benefits of 7,000 Durango/HIS Employees
FOR IMMEDIATE RELEASE
April 22, 2002
The Pension Benefit Guaranty Corporation (PBGC) today announced that it has taken over the underfunded pension plan covering more than 7,000 people who worked for the bankrupt Durango Apparel, Inc., New York. The firm is successor to the Henry I. Siegel Co., which made the H.I.S., Chic, Durango, and other clothing brands. Durango operated manufacturing plants in Tennessee and Kentucky.
"Because of PBGC's action, the basic pension benefits of Durango workers are protected," said PBGC Executive Director Steven A. Kandarian. "Retirees will continue to receive monthly checks subject to federal maximum guarantees, and other Durango employees will receive benefits when they are eligible to retire."
With assets of about $15 million to cover benefit liabilities totaling around $40 million, the Pension Plan for Eligible Employees of Henry I. Siegel Co. is underfunded by about $25 million, according to PBGC estimates. PBGC will use its own assets to cover the shortfall and protect the workers' benefits.
The plan was terminated as of March 29, 2002. Under federal pension law, the maximum pension guaranteed for workers in plans that terminate in 2002 is $3,579.55 a month (or $42,954.60 a year) for persons retiring at age 65. Maximum guarantees are adjusted for retirees older or younger than age 65 and for those who choose survivor benefits. PBGC estimates show most participants will receive their full benefit.
Workers and retirees do not need to take any action. Durango pension plan participants who have questions about benefits or who wish to retire may contact PBGC's Customer Service Center toll-free at 1-800-400-PBGC (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. Information pertaining to the Durango pension plan may also be found on the Trusteed Plans Info section of the PBGC Web site, www.pbgc.gov.
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 44 million American workers and retirees participating in more than 35,000 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. 02-20