WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced an agreement with Motorola, Inc., now known as Motorola Solutions, Inc., that will strengthen the company's pension plan.
Under the agreement, Motorola Solutions of Schaumburg, Ill., will contribute $100 million to the Motorola Pension Plan over the next five years. The payment is above and beyond legal requirements. The plan, with 87,000 participants, will continue to operate under the company's sponsorship.
Motorola and the agency entered into the agreement as the company was considering a spin-off of its Motorola Mobility business, and the sale of certain assets of its Networks business. The remaining enterprise, known as Motorola Solutions, will continue to sponsor the pension plan.
"One way PBGC protects pensions is to work with companies before they undertake major transactions," said PBGC Director Josh Gotbaum. "We commend Motorola Solutions for approaching us in advance. The result helps both Motorola and its retirees."
The agreement is a product of the PBGC's Early Warning Program, under which the agency monitors companies with underfunded pension plans and negotiates agreements when transactions occur to ensure that workers' pensions are protected.
The PBGC is a federal agency that guarantees payment of private pension benefits when companies and pension plans fail. It protects some 44 million Americans in over 27,500 private defined benefit pension plans. The PBGC pays benefits using insurance premiums and assets and other recoveries from plans and their sponsors; it receives no taxpayer funds.