PBGC Protects Intermet Corp. Pension Plans
FOR IMMEDIATE RELEASE
March 13, 2009
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced it will assume responsibility for four pension plans covering about 4,500 workers and retirees of Intermet Corp., a maker of automotive metal castings based in Ft. Worth, Tex.
The PBGC stepped in because the company failed to pay more than $7 million in legally required pension funding contributions. The agency also determined that the pension plans are unable to pay benefits when due because they lack sufficient funding and that Intermet, currently in Chapter 11 bankruptcy proceedings, will not be able to continue supporting the plans.
Intermet retirees will continue to receive their monthly benefit checks without interruption, and other workers will receive their pensions when they are eligible to retire.
According to PBGC estimates, the four Intermet pension plans are about 49 percent funded, having combined assets of $62 million and benefit liabilities of $126 million. The agency expects to cover $62 million of the $64 million total shortfall.
The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plans, which will end on March 31, 2009. Assumption of the plans' unfunded liabilities will have no material effect on the PBGC's financial statements, according to generally accepted accounting principles.
The four affected pension plans are: the Lynchburg Foundry LLC Retirement Plan for Hourly Employees; the Wagner Castings Co. Pension Plan; the Retirement Plan for Employees of Columbus Foundry Represented by USW Local No. 2948; and the Ganton Technologies LLC Racine Hourly Employees Retirement Plan.
Two other Intermet pension plans are unaffected by today's announcement and will remain ongoing under the company's sponsorship: the Ganton Technologies LLC Pulaski Hourly Employees Retirement Plan, and the Ganton Technologies LLC Salaried Employees Retirement Plan.
Principal employment locations of workers and retirees covered by Intermet pension plans are Columbus, Ga., Decatur, Il., Lynchburg and Radford, Va., and Racine, Wis.
As of January, PBGC-insured pension plans sponsored by employers in the automobile industry had unfunded benefit liabilities totaling over $60 billion, according to PBGC estimates.
Within the next several weeks, the PBGC will send notification letters to all participants in the affected Intermet plans. Under provisions of the Pension Protection Act of 2006, the maximum guaranteed pension the PBGC can pay is determined by the legal limits in force on the date of the plan sponsor's bankruptcy. Therefore participants in the Intermet pension plans are subject to the limits in effect on August 12, 2008, which set a maximum guaranteed amount of $51,750 for a 65-year-old.
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 Intermet Corp. 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 29,000 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. 09-17