PBGC Negotiates Deal to Strengthen Pension Funding at Whirlpool Corp.
FOR IMMEDIATE RELEASE
January 05, 2010
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced an $11.7 million agreement with appliance maker Whirlpool Corp., of Benton Harbor, Mich., to shore up funding for one of its retirement plans.
Unlike situations where the PBGC assumes responsibility for pension plans that can no longer pay benefits, the Whirlpool Production Employees Retirement Plan at LaVergne, which covers about 1,500 workers and retirees, remains ongoing and under the company's sponsorship.
The agreement stems from the Aug. 15, 2008 closure of the company's LaVergne, Tenn., facility, in which 649 active participants in the Whirlpool Production Employees Retirement Plan at LaVergne lost their jobs.
Under the agreement, Whirlpool has given the agency an $11.7 million bond that will remain in effect until Aug. 15, 2013. If the company or the PBGC ends the plan before that date, and Whirlpool failed to pay any resulting liability, the PBGC would collect on the bond.
"In keeping with the agency's mission, we continue to work with companies that sponsor pension plans so workers and retirees will receive the benefits they were promised," said Vince Snowbarger, acting director of the PBGC. "We salute Whirlpool for its cooperation. The agreement announced today will give the company's employees a more secure retirement outlook."
Whirlpool manufactures a range of home appliances such as washers, dryers, refrigerators, and air conditioners, under brand names that include KitchenAid, Bauknecht, Roper, and Maytag.
The Employee Retirement Income Security Act of 1974 (ERISA), the federal pension law that created the PBGC, requires the agency to seek additional protection when more than 20 percent of a company's employees covered by a pension plan lose their jobs due to a cessation of operations at a facility. However, the agency strives to craft settlements that safeguard pension plans, while recognizing the business needs of the companies that sponsor them.
Since 2007, the agency has negotiated more than $400 million in additional protection for defined benefit plans covering over 50,000 workers and retirees.
The PBGC is a federal corporation created under ERISA. 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.
— ### —
PBGC No. 10-13