PBGC to Pay Pension Benefits at Böwe Bell + Howell Co.
FOR IMMEDIATE RELEASE
March 17, 2011
WASHINGTON-The Pension Benefit Guaranty Corporation will cover the retirement benefits of nearly 800 employees and retirees of Böwe Bell + Howell Co., a maker of high-speed postal inserting and sorting systems based in Wheeling, Ill.
The PBGC, which safeguards the pensions of 44 million Americans, acted because Böwe Bell + Howell's parent company, Böwe Systec AG of Augsburg, Germany, is selling all its assets in bankruptcy. Following the sale, the pension plan will be abandoned, leaving PBGC to pay about $21 million in unfunded benefits.
By taking action before the sale, the agency can more easily recover assets from the company and its units to help pay benefits to members of Böwe Bell + Howell's retirement plan.
In general, PBGC will pay the benefit that a retiree would earn if they retired at age 65. However, there is a legal maximum, $54,000 per year for a 65-year-old, and lower for people who retire before age 65 or choose survivor benefits. In addition, certain early-retirement payments and recent benefit increases are generally not covered.
Further information is available at the PBGC Web site, www.pbgc.gov, or by calling toll-free 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.
Böwe Bell + Howell retirees who get their pension from PBGC may be eligible for the federal Health Coverage Tax Credit. For more information, see http://www.pbgc.gov/wr/benefits/hctc/hctc-faqs.html.
PBGC, which receives no taxpayer funds, will take over the pension plan assets and use insurance premiums to pay covered benefits. The company's pension plan has $24.6 million in assets to cover $45.5 million in benefit liabilities, according to the PBGC. The agency expects to cover $20.8 million of the $20.9 million shortfall.
PBGC's action will not have a significant impact on the agency's financial statements. PBGC included an estimate of Böwe Bell + Howell's benefit payments in its fiscal year 2010 financial statements, in keeping with generally accepted accounting principles.
— ### —
PBGC No. 11-27