PBGC Moves to Protect Pensions at Ronson Corp.
FOR IMMEDIATE RELEASE
December 30, 2009
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced it is moving to assume responsibility for the underfunded pension plan covering more than 460 workers and retirees of Ronson Corp., a maker of lighters and accessories based in Woodbridge, N.J.
The pension insurer is stepping in because the underfunded retirement plan will be unable to make benefit payments and faces abandonment following the sale of substantially all the company's assets. The buyers have not agreed to assume responsibility for the plan. By taking action now, the PBGC prevents further deterioration of the plan's condition.
The Ronson Corporation Retirement Plan is 33 percent funded, with assets of $2.7 million to cover benefit liabilities of $8.2 million, according to PBGC estimates. The agency expects to be responsible for the entire $5.5 million shortfall.
The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ended on Dec. 30, 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.
Ronson is the parent company of three operating units: Ronson Aviation, Inc., an aircraft fueling and servicing company; Ronson Consumer Products Corp., a maker and distributor of Ronsonol lighter fluid and various other lighter accessories; and Ronson Corporation of Canada Ltd., which markets the company's products throughout Canada. The company is engaged in a series of asset sales as a condition of a forbearance agreement with its primary lender Wells Fargo Bank, NA.
The PBGC will not have specific information about Ronson pension benefits until the agency becomes trustee of the plan. Workers and retirees with general questions about the PBGC and its benefit guarantees may consult the PBGC Web site, www.pbgc.gov.
Ronson 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 have no significant effect on PBGC's financial statements as an estimate of the claim was previously included in the agency's fiscal year 2009 financial statements, in accordance with generally accepted accounting principles.
The PBGC is a federal corporation created under ERISA. It currently insures the basic pension benefits of about 44 million American workers and retirees in more than 29,000 private-sector defined benefit pension plans. The Corporation receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by PBGC's investment returns.
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PBGC No. 10-12