Federal Pension Insurer Pays Benefits at Horizon Natural Resources
FOR IMMEDIATE RELEASE
June 25, 2004
The Pension Benefit Guaranty Corporation today announced that it has assumed responsibility for the pensions of more than 4,800 employees of Horizon Natural Resources Co., the nation's fourth-largest coal producer, based in Ashland, Ky.
"The PBGC is stepping in because Horizon Natural Resources is liquidating in bankruptcy, and no asset purchaser has emerged to assume the underfunded pension plan," said Executive Director Brad Belt. "The PBGC will ensure that retirees continue to receive their monthly benefit checks without interruption up to guaranteed federal limits, and that other employees will receive benefits when they are eligible to retire."
The Horizon Natural Resources LLC Pension Plan is 34 percent funded, with $45 million in assets to cover almost $132 million in benefit promises. The PBGC estimates it will be liable for $75 million of the $87 million shortfall. The company also failed to make more than $7 million in required contributions to the plan. The pension plan ended as of March 31, 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 Horizon Natural Resources pension 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. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns.
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PBGC No. 04-54