PBGC to Pay Pension Benefits at Alabama Aircraft Industries, Inc.
FOR IMMEDIATE RELEASE
July 29, 2011
WASHINGTON—The Pension Benefit Guaranty Corporation will pay the retirement benefits of more than 3,000 workers and retirees of the bankrupt airplane maintenance firm, Alabama Aircraft Industries, Inc. of Birmingham, Ala.
PBGC, which safeguards the pensions of 44 million Americans, acted to protect worker pensions after the bankruptcy court found the company could not afford its pension plan.
"At PBGC we work to keep pensions going," said PBGC Deputy Director for Policy Laricke Blanchard. "But when companies fail, we're ready to make sure people have retirement benefits they can count on."
PBGC will pay all pension benefits earned by Alabama Aircraft retirees up to the legal maximum of $54,000 a year for a 65-year-old.
"Americans who work hard every day for their employers should know that the benefits they are owed will be there for them when they retire," said Congresswoman Terri A. Sewell (Ala.-07). "I am thankful that the Pension Benefit Guaranty Corporation will step in to prevent catastrophic hardship for the thousands of Alabama Aircraft employees who would have lost their retirement benefits. As a member of Congress, I will continue to work hard to strengthen businesses that are struggling as a result of these challenging economic times and develop and promote policies that will help businesses and workers succeed in this global economy."
In Alabama's 7th Congressional District, where Alabama Aircraft is located, the PBGC paid almost $3.7 million in pension benefits to over 700 residents last year.
In total, PBGC contributed almost $73 million to the state's economy through benefit payments during 2010.
Further information is available at the PBGC website, 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.
Alabama Aircraft retirees who get their pensions from the PBGC may be eligible for the federal Health Coverage Tax Credit. The PBGC website provides details at http://www.pbgc.gov/wr/benefits/hctc/hctc-faqs.html.
PBGC, which receives no taxpayer funds, has taken over the pension plan's assets and will use insurance premiums to pay covered benefits. The Alabama Aircraft pension plan has $82.4 million to cover $142.8 million in benefit promises, according to PBGC estimates. The agency expects to pay about $58.9 million of the $60.4 million shortfall.
PBGC's loss from the Alabama Aircraft plan's unfunded liabilities was included in its fiscal year 2010 financial statements.
The 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.
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PBGC No. 11-50