PBGC Assumes Patton Corp.'s GAC/Flxible Pension Plan
FOR IMMEDIATE RELEASE
March 27, 2009
WASHINGTON-The Pension Benefit Guaranty Corp. (PBGC) today announced it has assumed responsibility for a pension plan sponsored by Patton Corp., Ann Arbor, Mich., for some 1,800 employees and retirees of its General Automotive Corp. (GAC) and Flxible Corp. affiliates which manufactured buses in Ann Arbor and Delaware, Ohio. Both firms liquidated in bankruptcy, GAC in 1998 and Flxible in 1997.
The PBGC stepped in because no entity remains to administer the plan and pay benefits following Patton's non-bankruptcy liquidation. An insolvent commercial real estate holding company, Patton ended its operations on June 30, 2006 and was unable to continue funding the plan. GAC and Flxible retirees will continue to receive their monthly benefit checks without interruption, and other former employees will receive their pensions when they are eligible to retire.
According to PBGC estimates, the GAC/Flxible Employees Retirement Plan is about 58 percent funded, with assets of $19.8 million and benefit liabilities of $33.8 million. The agency expects to cover the entire $14 million shortfall. The PBGC has taken over the assets and will use insurance funds to pay guaranteed benefits earned under the plan. Assumption of the plan's unfunded liabilities will have no material effect on the PBGC's financial statements, according to generally accepted accounting principles.
Within the next several weeks, the PBGC will send notification letters to all participants in the GAC/Flxible plan which terminated as of June 30, 2006, the date Patton Corp. ceased operations. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate 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.
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 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. 09-20