PBGC Assumes Pension Plan of Dubuque Packing Co.
FOR IMMEDIATE RELEASE
April 13, 2010
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced it has assumed responsibility for the underfunded pension plan covering nearly 1,300 former employees and retirees of the defunct Dubuque Packing Co., which operated a meat packing plant in Dubuque, Iowa.
The PBGC stepped in because the Dubuque Packing Co. Supplemental Pension Plan faced abandonment as its board of administration prepared to disband. The board had remained as plan administrator after Dubuque Packing liquidated and dissolved in chapter 7 bankruptcy. Retirees will continue to receive their monthly benefit payments without interruption, and other workers will receive their pensions when they are eligible to retire.
The pension plan is 36 percent funded, with about $1.9 million in assets and nearly $5.2 million in benefit liabilities, according to PBGC estimates. The agency expects to cover the $3.3 million shortfall, and will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ended on March 31, 2010. The PBGC became trustee of the plan on April 8, 2010.
Within the next several weeks, the PBGC will send trusteeship notification letters to all plan participants. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2010 is $54,000 per year. The maximum guaranteed amount is lower for those who retire earlier or elect survivor benefits. The PBGC expects that pension payments to retirees and beneficiaries under the Dubuque Packing plan will not be reduced by guarantee limits.
Workers and retirees with questions may consult the PBGC Web site, www.pbgc.gov or call toll-free at 1-800-400-7242. TTY/TDD users should call the federal relay service toll-free at 1-800-877-8339 and ask for 800-400-7242.
Dubuque Packing Co. 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 $3.3 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. 10-28