PBGC Negotiates $9.5 Million in Additional Pension Protection for Workers at Gold Toe Moretz
FOR IMMEDIATE RELEASE
September 03, 2010
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced an agreement with sock maker Gold Toe Moretz Holdings Corp. to shore up the pension plan of more than 370 former workers at the company's shuttered plant in Burlington, North Carolina.
Gold Toe Moretz, based in Newtown, N.C., is one of the largest manufacturers of socks in the world. The agreement stems from the Oct. 31, 2008 shutdown of the company's Burlington plant, where 372 active participants in the Gold Toe Retirement Plan lost their jobs. Unlike situations where the PBGC assumes responsibility for failed pension plans, the Gold Toe plan, with more than 2,500 participants, has not failed and remains ongoing under the company's sponsorship.
"The PBGC keeps an eye out for corporate transactions that might threaten pension plans," said PBGC Director Joshua Gotbaum. "We work with companies so they can achieve their goals while still protecting their workers and retirees."
Under the agreement, Gold Toe made a $1 million contribution to the pension plan on Aug. 6, and will contribute a million more in equal installments beginning Jan. 31, 2011 and ending on Jan. 31, 2013. Gold Toe has also given the PBGC a $7.5 million security interest in the company's current and future personal property, largely composed of inventory and receivables. If Gold Toe does not maintain its financial commitments to the pension plan, the PBGC may assert a claim on these and other assets.
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 create settlements that safeguard pension plans, while recognizing the business needs of the companies that sponsor them. Since 2007, under this program, the PBGC has obtained more than $600 million in additional protection for defined benefit plans covering over 60,000 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.
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PBGC No. 10-50