PBGC Protects Pensions of 14,000 Anchor Glass Container Corp. Workers and Retirees
FOR IMMEDIATE RELEASE
September 03, 2002
The Pension Benefit Guaranty Corp. (PBGC) today announced it has assumed responsibility for the underfunded pension plan covering more than 14,000 current and former employees and retirees of Anchor Glass Container Corp. The nation's third-largest maker of glass beverage containers, Anchor is emerging from chapter 11 bankruptcy under a court-approved plan of reorganization.
"Workers and retirees of Anchor Glass can be confident that their basic pension benefits are guaranteed under PBGC's insurance program," said PBGC Executive Director Steven A. Kandarian. "Retirees will continue to receive their monthly checks up to the limits allowed by law, and other employees will receive benefits when they are eligible to retire."
PBGC estimates the Anchor plan, with assets of $336 million and benefit liabilities of $555 million, is underfunded by $219 million. The agency will take over the assets and use PBGC insurance funds to pay guaranteed benefits earned under the plan, which terminated as of July 31, 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 persons 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 who have questions may contact the PBGC 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. Further information about PBGC's pension insurance program is available at the agency Web site, www.pbgc.gov.
In its plan of reorganization, Anchor agreed to pay PBGC $20.75 million on the plan's effective date, followed by an additional $100 million -- $10 million a year over 10 years - to satisfy Anchor's statutory pension liability. Anchor also agreed to grant PBGC a warrant for the purchase of five percent of the common stock of the reorganized company. Based in Tampa, Fla., Anchor has operations in twelve states, mostly in the Northeast and Midwest.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees 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 return
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PBGC No. 02-40