PBGC to Take Over Pensions of Kerr Group, Inc. Workers and Retirees
FOR IMMEDIATE RELEASE
August 01, 1997
The Pension Benefit Guaranty Corporation (PBGC) today announced its intention to take over the underfunded pension plan covering 5,600 workers and retirees of Kerr Group, Inc. which is being sold.
"Pension plans must be properly protected in the context of corporate transactions. Continuation of the plan remains our goal and we are open to further discussions with parties to make that happen," said PBGC Executive Director David M. Strauss. "However this is resolved, the pensions of workers and retirees are protected."
PBGC is asking the U.S. District Court in Philadelphia, Pa. to allow the agency to take over the pension plan effective today.
PBGC is taking this action because Fremont Partners, in acquiring Lancaster, Pa.-based Kerr, would finance a significant portion of the purchase price with debt secured by Kerr's assets. This would place PBGC behind other creditors if it had to make claims related to the plan.
The Kerr plan, with assets of nearly $90 million and benefit liabilities of about $130 million, is underfunded by $41 million according to PBGC estimates.
Most Kerr employees and retirees would be fully covered by PBGC's guarantee which, for plans terminating in 1997, is $2,761.36 a month (approximately $33,130 a year) for persons who retire at age 65 or later. The guarantee is lower for those who retire early or have survivor's benefits.
Kerr manufactures child resistant caps, tamper evident seals and plastic containers at plants in Lancaster, Pa., Ahoskie, N.C., Bowling Green, Ky. and Jackson, Tenn.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by more than 42 million American workers and retirees participating in about 50,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and investment returns.
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PBGC No. 97-39