PBGC, AIG Agree on Pension Protection in Fortress Sale
FOR IMMEDIATE RELEASE
February 03, 2011
WASHINGTON- The Pension Benefit Guaranty Corporation (PBGC) today announced an agreement that secures $4 million in additional funding for the pensions of 9,000 employees and retirees of American General Finance Inc. (AGF), a former subsidiary of the American International Group Inc. (AIG).
The PBGC negotiated the agreement as AIG prepared to sell 80 percent of AGF to funds managed by affiliates of Fortress Investment Group LLC. The sale is part of AIG's divestiture of a number of businesses. The PBGC has reviewed each divestiture to determine whether it could jeopardize the pension plans sponsored by AIG.
"One way PBGC protects pensions is to work with companies before they undertake major transactions," said PBGC Director Josh Gotbaum. "AIG's actions demonstrate its commitment to its employees and retirees."
The agreement is a product of the PBGC's Early Warning Program, under which the agency monitors companies with underfunded pension plans and negotiates agreements to ensure that workers' pensions are protected when transactions occur.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 27,500 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. 11-19