Federal Insurer Will Pay Pensions at Kaiser Aluminum
FOR IMMEDIATE RELEASE
July 29, 2004
WASHINGTON - The Pension Benefit Guaranty Corporation today announced it has assumed responsibility for the Kaiser Aluminum Inactive Pension Plan covering more than 2,900 former employees of Houston-based Kaiser Aluminum Corp., the nation's third-largest aluminum producer with operations in 10 states and overseas. Most individuals covered by the plan are retired employees of closed Kaiser Aluminum facilities.
"The PBGC is assuming this plan because Kaiser Aluminum meets the legal criteria to transfer these unfunded liabilities to the federal pension insurance program," said Executive Director Brad Belt. "Retirees will continue to receive their monthly benefit checks without interruption, and nearly all plan participants will receive the same benefit from PBGC that they were promised by the company."
The plan ended as of June 30, 2004, with the PBGC assuming responsibility as of July 29, 2004. The plan has about $49 million in assets and $96 million in liabilities. The PBGC expects to be liable for virtually the entire $47 million shortfall. This loss comes on top of the $246 million claim the agency incurred in December 2003, when it assumed responsibility for Kaiser Aluminum's pension plan for salaried employees. Kaiser Aluminum and its subsidiaries also sponsor six other defined-benefit pension plans, which remain ongoing.
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. The PBGC's initial estimate, which may change slightly upon review of plan documents, is that fewer than 1 percent of participants in the Kaiser Aluminum Inactive Pension Plan will be affected by these limitations.
Within the next several weeks, the PBGC will send trusteeship notification letters to all participants in the Kaiser Aluminum Inactive Pension Plan. Workers and retirees with questions may consult the PBGC Web site or call 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.
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. 04-59