PBGC Negotiates $105 Million Additional Pension Funding for Workers at ThyssenKrupp Affiliate
FOR IMMEDIATE RELEASE
December 03, 2010
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced an agreement with GLH LLC, an affiliate of ThyssenKrupp System Engineering Inc., to accelerate funding for a pension plan covering workers at a shuttered plant in Janesville, Wis.
The agreement stems from the Jan. 12, 2009 shutdown of ThyssenKrupp System Engineering's Janesville plant, where 163 active participants in the GLH LLC Retirement Plan lost their jobs. Unlike situations where the PBGC assumes responsibility for failed pension plans, the GLH pension plan, with 4,767 participants, remains ongoing under GLH's sponsorship.
"As companies adjust their operations to fit the changing economy, the PBGC seeks solutions that address both business goals and retirement security," said PBGC Director Josh Gotbaum. "We appreciate GLH's willingness to work with us to provide additional protection for its pension plan."
Under the agreement, GLH, a non-operating unit of ThyssenKrupp USA, made a $60 million payment to the plan in August 2010. GLH is also scheduled to make three payments of $10 million each over the next three years, followed by a $15.4 million payment slated before February 28, 2014. The final three payments are subject to reduction or complete forgiveness if the plan becomes fully funded, or if the company ends the plan in a fully funded standard termination proceeding. The payments are above and beyond the company's required plan contributions and cannot be used to create a funding surplus to offset future plan contributions.
A subsidiary of steel producer ThyssenKrupp USA, Inc., ThyssenKrupp System Engineering Inc. creates highly specialized manufacturing processes for the automotive and aerospace sectors, among others.
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 $750 million in additional protection for defined benefit plans covering more than 80,000 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 27,500 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. 11-15