PBGC Assumes Kaiser Aluminum & Chemical Pension Plans
FOR IMMEDIATE RELEASE
January 19, 2007
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced it has become trustee of four underfunded pension plans covering almost 900 current and former employees of Kaiser Aluminum & Chemical Co., a subsidiary of Kaiser Aluminum Corp (NASDAQ: KALU) Foothill Ranch, Calif.
The PBGC assumed the plans after a federal appeals court affirmed a lower court ruling that upheld a bankruptcy court which found that the company satisfied the legal test for terminating the plans. 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 four Kaiser pension plans, which terminated as of October 10, 2006, are known as the Bellwood Plan, the Los Angeles Extrusion Plan, the Sherman Plan and the Tulsa Plan. Together, the plans have assets of $20.1 million to cover promised benefits totaling $29.6 million, according to PBGC estimates. The agency expects to be liable for $2.7 million of the $9.5 million shortfall. Assumption of the plans will have no material effect on the PBGC's balance sheet, as an estimate of the liability was included in its fiscal 2006 financial statements according to generally accepted accounting principles. PBGC became trustee of the plans on December 29, 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.
Retirees of Kaiser Aluminum & Chemical 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 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. 07-15