PBGC, LTV Agree on Simplified Pension Funding Schedule
FOR IMMEDIATE RELEASE
December 02, 1998
Simplifying an agreement reached in 1993, the Pension Benefit Guaranty Corporation and The LTV Corporation have agreed that the company can fund six of its largest pension plans on a standard minimum funding basis.
"The change recognizes the $2.8 billion LTV has contributed to the plans since 1993, strengthening them to the point where it is now possible for LTV to fund them in a manner similar to most other plans," said PBGC Executive Director David M. Strauss.
Under the revised agreement, LTV will adhere to the tighter minimum funding requirements under the Retirement Protection Act of 1994. In addition, LTV will buy back from PBGC about $62 million worth of notes the agency received as part of its recoveries in 1993 when LTV emerged from bankruptcy.
After today's agreement, LTV will contribute to the plans on a standard schedule rather than a complex schedule of fixed and variable payments. The original agreement between PBGC and LTV, part of a settlement with LTV and its creditors covering PBGC's claims and LTV funding for the pension plans, took effect in 1993 when the company emerged from bankruptcy. Upheld by a Supreme Court ruling, PBGC had returned the plans to the company for resumed funding and administration. PBGC will continue monitoring the plans as LTV goes forward and continues with necessary funding.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by some 42 million American workers and retirees participating in about 45,000 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.
— ### —
PBGC No. 99-07