PBGC Assumes Responsibility for Pension Plans Covering 3,100 Participants of Indalex Inc.
FOR IMMEDIATE RELEASE
March 29, 2010
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced it has assumed responsibility for four underfunded pension plans covering nearly 3,100 former workers and retirees of Indalex Inc., a maker of alloy extrusion products in Lincolnshire, Ill.
The PBGC stepped in because the pension plans faced abandonment after the company sold substantially all of its assets while in bankruptcy proceedings. The buyer is unwilling to assume responsibility for the plans. Retirees and beneficiaries will continue to receive their monthly benefit checks without interruption, and other participants will receive their pensions when they are eligible to retire.
The plans are:
- Indalex USA Pension Plan
- Pension Plan for Employees of Aluminum Industry & Allied Industries of the Greater Youngstown, Ohio, Metropolitan Area - Indalex, Inc.- Girard
- Pension Plan for Employees of Aluminum Industry & Allied Industries of the Greater Youngstown, Ohio, Metropolitan Area - Indalex, Inc. - Niles Extrusion
- Pension Plan for Employees of Aluminum Industry & Allied Industries of the Greater Youngstown, Ohio, Metropolitan Area - Indalex, Inc. - Niles Casting
Collectively, the plans are 57 percent funded with $62.4 million in assets to cover $109.8 million in benefit liabilities. The agency will be responsible for $47.1 million of the $47.4 million shortfall.
Within the next several weeks, the PBGC will send notification letters to all participants in Indalex 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. Therefore participants in the plan are subject to the limits in effect when Indalex filed for bankruptcy protection on March 20, 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 March 23, 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.
Indalex filed for Chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Del., because of financial difficulties brought on by the global economic slowdown, which spurred a drop in demand, earnings, and liquidity. On July 2, 2009, the company's sale to Sapa holdings AB, a Swedish aluminum products maker, was approved. The transaction included 10 active plants in North America.
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.
Indalex 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 $47.1 million and was not previously included in the agency's fiscal year 2009 financial statements.
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. 10-27