PBGC Negotiates $44 Million Additional Funding for Tomkins Pension Plans
FOR IMMEDIATE RELEASE
October 28, 2010
WASHINGTON- The Pension Benefit Guaranty Corporation (PBGC) today announced agreements with auto parts and building materials maker Tomkins Corp. that will improve the financial health of pension plans covering some 13,000 workers and retirees.
Tomkins's U.S. affiliates sponsor 10 pension plans that are collectively underfunded by more than $200 million.
Under the agreements, Tomkins will contribute an additional $5 million to its largest pension plan, The Gates Group Retirement Plan, with more than 11,000 participants. Additionally, the company will forgo recently enacted pension funding relief, valued at about $35 million, for all plans. Finally, the company recently made an additional $3.7 million contribution to its Selkirk Corp. pension plan.
"PBGC protects pensions, and the right way to do that is not just to wait until plans fail," said PBGC Director Joshua Gotbaum. "Our agreements with Tomkins are a good example of how PBGC works to strengthen and keep plans going."
The agreements were a result of discussions between Tomkins and the PBGC regarding the September 30, 2010, leveraged buy-out of Tomkins by Onex Corporation and the Canada Pension Plan Investment Board and the January 7, 2010 closure of Selkirk's facility in Winters, Texas.
Unlike situations where the PBGC assumes responsibility for failed pension plans, the Tomkins plans, with about 13,000 participants, have not failed and remain ongoing under the company's sponsorship.
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. The agency works to negotiate agreements 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.
Tomkins, based in London, is a global manufacturer of engineered auto parts, industrial products, and components for the North American housing market. The company also makes products that include power transmission belts, hydraulic hoses, couplings, and tire pressure gauges.
The PBGC is a federal agency that guarantees payment of private pension benefits when companies and pension plans fail. It protects some 44 million Americans in over 29,000 private defined benefit pension plans. The PBGC pays benefits using insurance premiums and assets and other recoveries from plans and their sponsors; it receives no taxpayer funds.
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PBGC No. 11-08