Federal Pension Insurer To Pay Pensions of JA Jones Inc.
FOR IMMEDIATE RELEASE
January 28, 2004
The Pension Benefit Guaranty Corporation today announced it is moving to assume responsibility for the underfunded pension plan of more than 6,300 workers and retirees of the Charlotte, N.C.-based JA Jones Inc., a construction and engineering firm that is liquidating in bankruptcy.
"The PBGC is stepping in because JA Jones has missed $7.5 million in required contributions and the pension plan is likely to be abandoned by the liquidating company," said Executive Director Steven A. Kandarian. "The PBGC will take over payment of retirees' monthly benefit checks without interruption, up to guaranteed federal limits, and will ensure other employees receive benefits when they are eligible to retire."
The Pension Plan of JA Jones Inc. is 44 percent funded, with $95 million in assets to cover $215 million in benefit promises. Of the $120 million shortfall, the PBGC estimates it will be liable for about $104 million. The plan will end as of January 31, 2004, and the PBGC expects to become trustee within several weeks of that date.
Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2004 is $44,386 per year. The maximum guaranteed amount is lower for those who retire earlier or elect survivor benefits. In addition, certain early retirement subsidies and benefit increases made within the past five years may not be fully guaranteed.
After the PBGC becomes trustee of the pension plan, the agency will send notification letters to all participants in the JA Jones Inc. plan. After the transfer of plan documents, the agency will review individual records and calculate each person's benefit according to plan provisions, asset allocation rules, and federal guarantee limits. Workers and retirees with questions may contact PBGC 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 over 31,000 private-sector defined benefit pension plans.
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PBGC No. 04-23