PBGC Protects Pensions at Crucible Corporation
FOR IMMEDIATE RELEASE
January 13, 2010
WASHINGTON-The Pension Benefit Guaranty Corp. (PBGC) today announced it has assumed responsibility for six underfunded pension plans covering nearly 3,600 former workers and retirees of Crucible Materials Corp., a manufacturer of specialty metal products based in Syracuse, N.Y., with operations in Pittsburgh, Pa.
The PBGC stepped in because the plans failed to meet minimum funding requirements and faced abandonment due to the company's liquidation in bankruptcy proceedings. There would have been no entity left to finance or administer the plans.
Crucible retirees will continue to receive their monthly benefit checks without interruption, and other workers will receive their pensions when they are eligible to retire.
Collectively, the plans are 58 percent funded, with assets of $147.1 million to cover $277.3 million in benefit liabilities, according to PBGC estimates. The agency expects to be responsible for $106.4 million of the $130.2 million shortfall.
The plans are: Crucible Materials Corporation Specialty Metals Division - Syracuse and United Steelworkers of America for Separate Plan; Crucible Materials Corporation Salaried Retirement Plan; Crucible Materials Corporation Service Centers Division Retirement Plan for Cleveland Warehouse Employees; Trent Tube Pension Plan; Trent Tube Division Carrollton, Georgia Pension Plan; and Crucible Compaction Metals Division USW Pension Plan.
The plans ended on Sept. 30, 2009. The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan.
Within the next several weeks, the PBGC will send notification letters to all participants in the 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. Crucible filed for bankruptcy on May 6, 2009. Therefore, participants in the plans are subject to the limits in effect on May 6, 2009, which set a maximum guaranteed amount of $54,000 a year for a 65-year-old. The agency became trustee of the plans on Jan. 11, 2010.
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.
Crucible's products were primarily marketed to the automotive and related industrial machining industries. The employee-owned company has been in business for more than 100 years. Crucible sought Chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Del., on May 6, 2009, with the intent to reorganize. But faced with limited financing and poor market conditions the company decided to sell substantially all of its assets.
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.
Crucible 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 the PBGC's financial statements because an estimate of the claim was previously included in the agency's fiscal year 2009 financial statements, in accordance with generally accepted accounting principles.
PBGC is a federal corporation created under the Employee Retirement Income
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PBGC No. 10-19