Federal Pension Insurer Protects Benefits of 8,000 at Consolidated Freightways
FOR IMMEDIATE RELEASE
June 03, 2003
The Pension Benefit Guaranty Corporation (PBGC) today announced that it has assumed responsibility for the pensions of more than 8,000 workers and retirees of Consolidated Freightways, a bankrupt trucking firm based in Vancouver, Wash.
"Consolidated Freightways is liquidating, and its pension plan does not have enough money to pay all promised benefits," said PBGC Executive Director Steven A. Kandarian. "PBGC's guarantee ensures that workers will receive basic pension benefits when they are eligible to retire and that current retirees will continue to receive their monthly checks, up to federal limits on insured benefits."
The PBGC estimates the Consolidated Freightways Corporation Pension Plan has about $228 million in assets to cover $504 million in promised benefits. The agency has filed claims against the company in bankruptcy court for the estimated $276 million shortfall. The company also failed to make a $1.8 million required contribution that was owed to the plan by April 15.
Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2003 is $43,977.24 a year. Maximum guarantees are adjusted for retirees older or younger than age 65 and for those who choose survivor benefits. Pension benefit increases that have not been in effect for at least five years are not fully covered by PBGC, and some temporary benefit supplements for early retirees also may not be guaranteed.
Within the next several weeks, the PBGC will send trusteeship notification letters to all active and retired Consolidated Freightways workers. After the transfer of plan documents, the agency will review individual records and calculate each person's benefit according to plan provisions and federal guarantee limits. Information about the Consolidated Freightways pension plan is available at the PBGC Web site. Workers and retirees with additional questions may contact PBGC's Contact 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 for 800-400-7242. General information about PBGC's pension insurance program is available at www.pbgc.gov.
The 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 44 million American workers and retirees participating in about 32,500 private-sector defined benefit pension plans.
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PBGC No. 03-38