PBGC Moves to Protect Pensions of 6,200 at Republic Technologies International
FOR IMMEDIATE RELEASE
June 14, 2002
The Pension Benefit Guaranty Corporation (PBGC) today announced it is terminating and assuming responsibility for the pensions of around 6,200 workers, including 2,000 retirees, of Republic Technologies International (RTI), LLC, a bankrupt maker of special bar quality steel. RTI, based in Akron, Ohio, sponsors four pension plans that are underfunded by a total of almost $310 million.
"Because of PBGC's guarantee, retirees can be sure of receiving pension checks without interruption," said PBGC Executive Director Steven A. Kandarian, noting that federal law limits the benefits payable. "Other RTI workers will receive basic pensions from PBGC when they become eligible to retire," he added. Mr. Kandarian also pointed out that RTI is liquidating and will no longer be able to finance or administer its pension plans. "PBGC's action safeguards workers' basic pension benefits and, at the same time, protects the pension insurance program from incurring much greater losses," he said.
PBGC estimates the RTI plans have only about $165 million in total assets to cover around $475 million in total liabilities, and will be unable to pay benefits in the future. With RTI no longer in business, the plans would be abandoned. Further, PBGC would sustain an unreasonable increase in long-run losses if RTI's two major pension plans were not terminated.
Under federal 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 those who retire at ages younger or older than 65 or those who elect survivor benefits. Temporary benefit supplements for early retirees, and certain portions of recent benefit improvements, are not covered by PBGC. Workers and retirees do not need to take any action. RTI pension plan participants with questions 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. Information about pension insurance also may be found on PBGC's 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. 02-25