PBGC Moves to Assume Responsibility for WHX Corp. Pension Plan
FOR IMMEDIATE RELEASE
March 07, 2003
The Pension Benefit Guaranty Corp. today announced its intention to assume responsibility for the pension plan sponsored by WHX Corp. The plan covers 9,400 workers and retirees of two subsidiaries, the bankrupt Wheeling-Pittsburgh Steel Corp. of Wheeling, W.Va., and Handy & Harman of Rye, N.Y.
"The PBGC's insurance guarantees will protect the basic pension benefits of workers and retirees in the WHX pension plan," PBGC Executive Director Steven A. Kandarian said. "Retirees will continue to receive their monthly checks up to guaranteed federal limits, and other employees will receive benefits when they are eligible to retire."
The WHX Pension Plan is 68 percent funded, with roughly $300 million in assets to cover more than $443 million in benefit liabilities. Of the $143 million in total underfunding, the PBGC estimates that it will be liable for about $65 million. However, the federal pension insurance program is at risk of incurring an additional loss of as much as $378 million for unfunded "shutdown benefits" if the pension plan is not terminated now. Losses suffered by the insurance program must be covered by premiums paid by other companies that sponsor defined benefit pension plans. The PBGC receives no general tax revenue.
In 1986, the PBGC absorbed a claim of $495 million when it took responsibility for seven other Wheeling-Pittsburgh Steel defined-benefit pension plans. The current pension plan was established in 1997, with Handy & Harman pensions merged into the plan in 1998.
Since 1974, the steel industry has accounted for 58 percent of all claims against the pension insurance program but less than 3 percent of covered workers. Since October 1, 2001, the PBGC has booked more than $8 billion in claims from steel companies, including Bethlehem Steel, LTV Steel, National Steel, Acme Metals, CSC Steel, GS Industries, and Empire Specialty Steel.
Under federal pension law, the maximum pension guaranteed for workers in plans that end in 2003 is $3,664 a month (or $43,977 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. Until the PBGC becomes trustee of the WHX Pension Plan, individuals who have questions or who wish to retire should contact the pension plan administrator. Information about PBGC's pension insurance program is available at the agency Web site, 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 for about 44 million American workers and retirees participating in over 32,500 private-sector defined benefit pension plans.
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PBGC No. 03-25