PBGC, Fremont Partners, Kerr Group in Agreement to Protect Pensions
FOR IMMEDIATE RELEASE
August 19, 1997
The Pension Benefit Guaranty Corporation (PBGC) has reached a preliminary agreement with Fremont Partners and Kerr Group, Inc. that will continue the Kerr pension plan covering 5,600 workers and retirees, and provide for accelerated pension funding and other protections in connection with Fremont's acquisition of Kerr.
"This pension plan will remain ongoing, thanks to a commitment by Fremont to increase funding of the Kerr pension plan," said PBGC Executive Director David M. Strauss.
Under the agreement, Kerr will continue to be responsible for the pension plan which is underfunded by an estimated $41 million. Kerr will pay $3.5 million into the pension plan at closing of the sale, and an additional $35.5 million through January 2003. PBGC will hold a second security interest in substantially all Kerr assets. As a result of the agreement, which will remain in effect for a minimum five years and until Kerr achieves investment grade ratings, PBGC will not take over the plan.
San Francisco-based Fremont Partners sought the agreement after PBGC asked for federal court permission to take over the underfunded Kerr pension plan. PBGC will withdraw its pending court action upon signing of a final agreement.
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. 97-41