The Pension Benefit Guaranty Corp. (PBGC) said the WHX Corp. plan covers 9,400 workers and retirees of two subsidiaries, the bankrupt Wheeling-Pittsburgh Steel Corp. of Wheeling, West Virginia, and Handy & Harman of Rye, New York. The WHX Pension Plan has roughly $300 million in assets to cover more than $443 million in benefit liabilities. Of the $143 million in total underfunding, the PBGC estimates that it will be liable for about $65 million. However, the PBGC said the federal pension insurance program could be hit with an additional loss of as much as $378 million for unfunded “shutdown benefits” if the pension plan is not terminated now.
In 1986, the PBGC absorbed a claim of $495 million when it took responsibility for seven other Wheeling-Pittsburgh Steel defined-benefit pension plans. The current pension plan was established in 1997, with Handy & Harman pensions merged into the plan in 1998. Since October 1, 2001, the PBGC has booked more than $8 billion in claims from steel companies, including Bethlehem Steel, LTV Steel, National Steel, Acme Metals, CSC Steel, GS Industries, and Empire Specialty Steel (See PBGC Bottom Line Buffeted by ‘Perfect Storm’ ).
Under federal pension law, the maximum pension guaranteed for workers in plans that end in 2003 is $3,664 a month (or $43,977 a year) for persons retiring at age 65. Maximum guarantees are adjusted for retirees older or younger than age 65 and for those who choose survivor benefits. PBGC, created by ERISA, currently guarantees payment of basic pension benefits for about 44 million American workers and retirees participating in over 32,500 private-sector defined benefit pension plans.