PBGC Protects Pensions at Milacron Inc.
FOR IMMEDIATE RELEASE
June 10, 2009
WASHINGTON - The Pension Benefit Guaranty Corporation (PBGC) today announced it is moving to assume responsibility for the underfunded pension plan covering about 8,400 employees and retirees of Milacron Inc., a bankrupt vendor of plastics technologies and industrial fluids based in Batavia, Ohio. Other Milacron facilities are in Kansas, Michigan and Pennsylvania.
The pension insurer's move comes as Milacron, in chapter 11 bankruptcy, prepares to sell substantially all of its assets to a new company. At a hearing currently set for June 26, Milacron will seek bankruptcy court approval of the sale transaction that will result in the abandonment of the pension plan to a liquidating corporate shell with no assets. By taking this action before the sale, the PBGC will mature its claim for the entire pension shortfall against Milacron's foreign assets. The PBGC has previously perfected liens of about $3.6 million against these assets.
The Milacron Retirement Plan is 45 percent funded, with $260 million in assets to cover $573 million in benefit liabilities, according to PBGC estimates. The agency expects to be liable for about $285 million of the $313 million shortfall. The pension plan has been frozen since December 31, 2007.
The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ends on June 10, 2009. Retirees and beneficiaries will continue to receive their monthly benefit checks without interruption, and other workers will receive their pensions when they are eligible to retire.
Until the PBGC becomes trustee of the pension plan, the plan will remain ongoing under company sponsorship. 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 2009 is $54,000 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.
Milacron 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.
Assumption of the plan's unfunded liabilities will increase the PBGC's claims by $284.5 million and was not previously included in the agency's fiscal year 2008 financial statements.
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.
— ### —
PBGC No. 09-34