PBGC Assumes Pension Plans of Specialty Filaments
FOR IMMEDIATE RELEASE
June 19, 2007
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced it has assumed responsibility for the pensions of more than 500 former employees of Specialty Filaments Inc., a bankrupt manufacturer of materials used in brushes and brooms based in Middlebury, Vt.
The PBGC stepped in because nearly $4 million in required contributions to the company's two underfunded pension plans were due and unpaid, and the pension plans would be abandoned after Specialty Filaments completed bankruptcy liquidation. The bankruptcy court approved a sale of substantially all of the company's assets to an affiliate of the Thomas Monahan Co. of Arcola, Ill., in a transaction that does not include the pension plans. The two plans are the Polymers Inc. Restated Pension Plan and the Retirement Plan for Union Employees of E.B. and A.C. Whiting Company. Specialty Filaments was formed in 2002 to acquire the assets of an earlier plan sponsor, Apex Specialty Materials Inc. of Andover, Mass.
Specialty Filaments retirees will continue to receive their monthly benefit checks without interruption, and other workers will receive their pensions when they are eligible to retire.
Together, the plans have assets of $4.2 million to cover $13.3 million in benefit liabilities, according to PBGC estimates. The agency expects to be responsible for about $8.7 million of the $9.1 million shortfall. Although assumption of the unfunded liability was not reflected in the PBGC's fiscal year 2006 financial statement, the claim will not have a material effect on the agency's financial condition.
Both plans were terminated as of Jan. 11, 2007, when Specialty Filaments filed for Chapter 7 bankruptcy. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminated 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.
Retirees of Specialty Filaments 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. 07-27