PBGC Sues Bendix for Pension Debt
FOR IMMEDIATE RELEASE
October 28, 2011
WASHINGTON–The Pension Benefit Guaranty Corporation, which protects American pensions, is suing Bendix Commercial Vehicle Systems LLC for $16.6 million to cover pension debt from the closing of its Frankfort, Ky., plant.
Federal law requires companies to provide financial protection when more than 20 percent of a pension plan's members lose their jobs in a shutdown. All the Frankfort plant's 63 workers were displaced after it closed in December 2007.
"Bendix continues to ignore its legal responsibility to these workers," said PBGC Director Josh Gotbaum. "We've tried to work with them in good faith, but now we have no choice except to take them to court. Make no mistake: PBGC will use every legal means to protect pensions."
PBGC filed its lawsuit in the US District Court in Cleveland on Sept. 16, 2011 after Bendix declined to meet its obligations. The action against Bendix is the first time PBGC has had to go to court to compel a company to cover pension obligations from a plant closing.
Until now, companies that closed plants have worked with PBGC to settle their pension debts. Since 2007, PBGC has obtained more than $1 billion in additional protection for pension plans covering more than 120,000 workers and retirees.
PBGC is hopeful the issue will be resolved soon without further court action.
Bendix, which supplies brakes and vehicle control systems for trucks and commercial vehicles is headquartered in Elyria, Ohio, and owned by Knorr-Bremse AG of Munich, Germany.
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. 12-03