PBGC Protects Pensions of Hourly Workers at Kaiser Aluminum
FOR IMMEDIATE RELEASE
October 05, 2004
WASHINGTON-The Pension Benefit Guaranty Corporation today announced it has assumed responsibility for the Kaiser Aluminum Pension Plan, which covers more than 9,600 hourly employees of Houston-based Kaiser Aluminum Corp., the nation's third-largest aluminum producer with operations in 10 states and overseas.
"The PBGC is assuming this plan because Kaiser Aluminum is in bankruptcy and 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 other workers will receive their pension when eligible to retire."
The Kaiser Aluminum Pension Plan ended as of April 30, 2004, with the PBGC assuming responsibility as of September 30, 2004. The plan is 48 percent funded, with about $301 million in assets to cover $629 million in liabilities. The PBGC expects to be liable for about $262 million of the $328 million shortfall.
With this loss, the PBGC has now taken on $555 million of Kaiser Aluminum's benefit promises. In addition to the hourly pension plan, Kaiser Aluminum has transferred to the PBGC the liabilities of its pension plans for salaried and inactive workers. The company has paid a total of about $19 million in premiums for the three plans since 1994. Kaiser Aluminum and its subsidiaries sponsor five 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.
Within the next several weeks, the PBGC will send trusteeship notification letters to all participants in the Kaiser Aluminum 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.
Kaiser retirees who draw a benefit from the PBGC may be eligible for the federal Health Coverage Tax Credit.
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. 05-03