PBGC Protects Pensions at Ameripol Synpol Corp.
FOR IMMEDIATE RELEASE
April 14, 2004
The Pension Benefit Guaranty Corporation today announced that it has assumed responsibility for the pensions of more than 1,300 employees and retirees of Ameripol Synpol Corp., a manufacturer of synthetic rubber products in Port Neches, Texas.
"The PBGC is stepping in because Ameripol Synpol meets the necessary legal criteria to transfer its underfunded pension plans to the federal pension insurance program," said Acting Executive Director Vince Snowbarger. "The PBGC will ensure that retirees continue to receive their monthly benefit checks without interruption, up to guaranteed federal limits, and that other employees receive benefits when they are eligible to retire."
Ameripol Synpol filed for bankruptcy protection in December 2002, and sold its Port Neches facility in July 2003. The company's two defined-benefit pension plans are being transferred to the PBGC under the "distress termination" provisions of federal pension law, which allow companies to shed their pension obligations if they can prove such a step is necessary to emerge from bankruptcy.
The Ameripol Synpol pension plans are 37 percent funded, with more than $21 million in assets to cover almost $59 million in benefit promises. The PBGC estimates it will be liable for about $32 million of the $37 million shortfall. The company also failed to make more than $3.3 million in required contributions to the plans. The pension plans ended as of February 29, 2004.
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.
Within the next several weeks, the PBGC will send notification letters to all participants in the Ameripol Synpol pension plans. 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. 04-37