PBGC Moves to Assume Responsibility for Thunderbird Mining Pension Plan
FOR IMMEDIATE RELEASE
July 24, 2003
The Pension Benefit Guaranty Corp. today announced its intention to assume responsibility for the pension plan covering almost 1,300 workers and retirees of Thunderbird Mining Co. of Eveleth, Minn. Thunderbird is a subsidiary of the bankrupt Eveleth Mines LLC (Evtac), which produces taconite pellets used in the manufacture of iron and steel. Evtac is jointly owned by three major North American steelmakers, Rouge Steel, AK Steel, and Stelco.
"The PBGC's insurance guarantees will protect the basic pension benefits of workers and retirees in the Thunderbird Mining 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 Thunderbird Mining Co. Pension Plan is 52 percent funded, with roughly $65 million in assets to cover more than $126 million in benefit liabilities. Of the approximately $61 million in total underfunding, the PBGC estimates that it will be liable for about $37 million. 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.
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. Over the past two years, the PBGC has incurred 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. In addition, benefit increases made within the last 5 years and certain supplemental benefits are not fully guaranteed.
Workers and retirees do not need to take any action. Until the PBGC becomes trustee of the Thunderbird Mining Co. Pension Plan, individuals who have questions 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 more than 32,000 private-sector defined benefit pension plans.
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PBGC No. 03-46