Federal Pension Insurer Moves to Protect Benefits at Geneva Steel
FOR IMMEDIATE RELEASE
November 25, 2002
The Pension Benefit Guaranty Corporation (PBGC) today announced that it will assume responsibility for the underfunded pension plan that covers more than 1,500 workers and retirees of Geneva Steel LLC, a bankrupt manufacturer of steel products in Vineyard, Utah.
"PBGC is stepping in because the company is unable to meet the minimum funding requirements for its pension plan," said PBGC Executive Director Steven A. Kandarian. "PBGC's guarantee ensures that Geneva Steel workers will receive basic pension benefits when they are eligible to retire and that current retirees will continue to receive their monthly checks, subject to federal limits on insured benefits."
PBGC estimates that Geneva Steel owes about $2.7 million in missed contributions to the Geneva Steel Union Employee Defined Benefit Plan. With assets of about $2 million to cover benefit liabilities of about $21.7 million, the plan is less than 10 percent funded, according to agency estimates.
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. Pension plans that have not been effect for at least 5 years are not fully covered by PBGC, and some temporary benefit supplements for early retirees also may not be guaranteed.
Workers and retirees do not need to take any action. Geneva Steel pension plan participants who have questions about benefits or who wish to retire should contact their plan's administrator. PBGC will inform pension plan participants by letter when it becomes trustee of the pension plan and will provide specific benefit calculations when available. Information about PBGC's pension insurance program may be found at www.pbgc.gov.
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 returns.
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PBGC No. 03-05