PBGC to Pay Pension Benefits at Wolverine Tube
FOR IMMEDIATE RELEASE
June 29, 2011
WASHINGTON—The Pension Benefit Guaranty Corporation will pay the pensions of nearly 2,400 employees and retirees of bankrupt Wolverine Tube, Inc., based in Huntsville, Ala., with facilities also in Shawnee, Okla.
PBGC, which protects pensions of 44 million Americans, stepped in after the bankruptcy court ruled that Wolverine could not continue in business unless PBGC took responsibility for the pensions.
"We are pleased PBGC was able to help preserve jobs at Wolverine, as well as secure benefits for 2,400 people whose pensions, without PBGC, would largely be lost," said PBGC Director Josh Gotbaum.
Congressman James Lankford (R-Okla.), who represents Shawnee, praised PBGC's role in Wolverine's restructuring. "This was a critical step to keeping the economy of the 5th district of Oklahoma strong, and indeed, to American manufacturing," Lankford said. "Over 550 American jobs were saved at Shawnee, providing valuable product to manufacturers nationwide. Preservation of these jobs will help ensure our economy continues to benefit from the quality jobs Wolverine provides. The cooperative efforts of PBGC helped ensure this outcome and provided a crucial safety net to these Oklahoma workers."
In 2010, PBGC paid about $4 million in pension benefits to 645 retirees who live in Oklahoma's 5th congressional district.
PBGC pays benefits up to the legal maximum, which currently is $54,000 a 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.
Wolverine Tube 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 $106.3 million in assets to cover $190.4 million in benefit liabilities, according to the PBGC. The agency expects to cover $79.6 million of the $84.1 million shortfall.
PBGC protects the pension benefits of 44 million Americans in 27,500 private-sector pension plans. The agency is directly responsible for paying the benefits of more than 1.5 million people in failed pension plans. PBGC receives no taxpayer dollars and never has. Its operations are financed by insurance premiums and with assets and recoveries from failed plans. PBGC's loss from the Wolverine plan's unfunded liabilities was included in its fiscal year 2010 financial statements.
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PBGC No. 11-47