PBGC Assumes Pension Plan of Foss Manufacturing Co.
FOR IMMEDIATE RELEASE
January 16, 2007
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced it has assumed responsibility for the pensions of more than 900 former employees of bankrupt Foss Manufacturing Co. Inc., a maker of specialty non-woven fibers based in Hampton, N.H.
The PBGC stepped in because the pension plan sponsored by Foss faced abandonment after the company, under chapter 11 bankruptcy protection since September 16, 2005, sold substantially all of its assets and no purchaser was willing to assume the plan. Retirees will continue to receive their monthly benefit checks without interruption, and other workers will receive their pensions when they are eligible to retire.
The Foss Companies Retirement Benefit Accumulation Plan is 60 percent funded, with around $18 million in assets to cover almost $30 million in promised benefits, according to PBGC estimates. The PBGC will use its insurance funds to cover all but about $1.5 million of the nearly $12 million shortfall. Assumption of the plan will have no material effect on the PBGC's balance sheet because, following generally accepted accounting principles, an estimate of the liability was included in its fiscal 2006 financial statements. The pension plan ended as of May 5, 2006, and PBGC became trustee on December 27, 2006.
Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminated in 2006 is $47,659 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.
Foss Manufacturing Co. Inc. retirees who draw a benefit from the PBGC may be eligible for the federal Health Coverage Tax Credit. Further information may be found on the PBGC Web site at http://www.pbgc.gov/workers-retirees/benefits-information/content/page13692.html.
Within the next several weeks, the PBGC will send trusteeship notification letters to all plan participants. Workers and retirees with questions may consult the PBGC Web site, www.pbgc.gov or call toll-free at 1-800-400-7242.
TTY/TDD users should call the federal relay service at 1-800-877-8339 and ask to be connected to 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 30,000 private-sector defined benefit pension plans. The PBGC receives no general tax revenue and is not backed by the full faith and credit of the U.S. government. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns.
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PBGC No. 07-13