PBGC to Protect Pensions of ABC and National Castings Workers
FOR IMMEDIATE RELEASE
June 20, 2002
The Pension Benefit Guaranty Corporation (PBGC) today announced that it has taken over two underfunded pension plans sponsored by ABC-NACO, Inc., and its subsidiary, National Castings, Inc. The plans covered almost 2,100 workers of the Lombard, Ill.-based manufacturer of steel rail products.
"PBGC has stepped in because the companies are going out of business and the pension plans do not have enough money to pay all benefits," said PBGC Executive Steven A. Kandarian. "The PBGC insurance program protects basic pension benefits earned by ABC and National Castings workers. Retirees will continue to receive their monthly checks subject to federal maximum guarantees, and other employees will receive benefits when they are eligible to retire."
The two plans taken over by PBGC are the Keokuk Steel Castings, Inc.-National Castings, Inc. Merged Pension Plan for Hourly Employees and the ABC Rail Products Corp. Retirement and Disability Pension Plan. With combined assets of about $24 million and benefit liabilities of $36 million, the plans are underfunded by almost $12 million, according to agency estimates. PBGC will use its insurance funds to make up the shortfall and guarantee to pay benefits as promised by the plans, up to the maximum allowed by law.
Both plans terminated as of January 12, 2002. Under federal pension law, the maximum pension guaranteed for workers in plans that terminated in 2002 is $3,579 a month (or $42,954 a year) for those retiring at age 65. Maximum guarantees are adjusted for retirees older or younger than age 65 and for those who choose survivor benefits. Workers and retirees do not need to take any action. Those with questions about benefits or who wish 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.
Separately, as part of a transaction approved by the bankruptcy court on May 23, 2002, Matrix Metals, Inc. will become responsible for the pensions of almost 700 former ABC and National Castings workers at plants in Keokuk, Iowa and Baltimore, Md.
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 over 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.
— ### —
PBGC No. 02-26