PBGC Protects Pensions at Anchor Hocking
FOR IMMEDIATE RELEASE
April 12, 2007
WASHINGTON - The Pension Benefit Guaranty Corporation (PBGC) today announced it is moving to assume responsibility for the underfunded pension plan covering about 1,300 employees and retirees of bankrupt Anchor Hocking CG Operating Co. LLC, a unit of Global Home Products LLC of Westerville, Ohio. Anchor Hocking produces consumer glassware in Lancaster, Ohio, and Monaca, Pa.
The PBGC is stepping in because Anchor Hocking has missed $5.7 million in required contributions and the pension plan will be abandoned as a result of the sale of substantially all of Anchor Hocking's assets, as contemplated in its bankruptcy proceeding. Retirees and beneficiaries will continue to receive their monthly benefit checks without interruption, and other participants will receive their pensions when they are eligible to retire.
According to PBGC estimates, the Anchor Hocking Pension Plan for Union Employees is 13 percent funded, with $1.3 million in assets to cover $10.1 million in benefit liabilities. The PBGC expects to be liable for about $4 million of the $8.8 million shortfall. The agency will take over the assets and use PBGC insurance funds to pay guaranteed benefits earned under the plan, which terminated on Apr. 12, 2007. The liability associated with assumption of the plan is reflected in PBGC's financial statements for the 2006 fiscal year, according to generally accepted accounting principles
Global Home Products LLC and Anchor Hocking filed for Chapter 11 bankruptcy protection on April 10, 2006. The sale of substantially all of Anchor Hocking's assets to a unit of Monomoy Capital Partners LP was approved by the bankruptcy court on March 26, 2007. In the transaction, the buyer will not assume the pension plan. When the sale of the Anchor Hocking assets closes, Anchor Hocking and Global Home Products will be divested of substantially all operating assets, leaving the pension plan without a viable sponsor.
The PBGC's action to assume the Anchor Hocking Pension Plan for Union Employees has no effect on other pension plans that covered Anchor Hocking workers prior to the establishment of this plan in 2004.
Until the PBGC becomes trustee of this pension plan, it will continue to be administered by Anchor Hocking. The agency will send notification letters to all plan participants when it becomes trustee. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2007 is $49,500 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.
Workers and retirees with questions may consult the PBGC Web site, www.pbgc.gov 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.
Retirees of Anchor Hocking 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
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. 07-21