The Pension Benefit Guaranty Corporation (PBGC) said it would take over the Geneva Steel Union Employee Defined Benefit Plan, which is less than 10% funded with assets of about $2 million to cover benefit liabilities of about $21.7 million.
The agency said the plan covers more than 1,500 workers and retirees of Geneva Steel LLC, a bankrupt Vineyard, Utah steel parts manufacturer. PBGC said it estimates that Geneva Steel owes the plan about $2.7 million in missed contributions.
Geneva Steel pension plan participants who have questions about benefits or who wish to retire should contact their plan’s administrator, the agency said.PBGC will inform pension plan participants by letter when it becomes trustee of the pension plan and will provide specific benefit calculations when available.
Under federal pension law, the maximum pension guaranteed for workers in plans that terminated in 2002 is $3,579 a month (or $42,954 a year) for those retiring at age 65.
PBGC, created by ERISA, guarantees payment of basic pension benefits earned by about 44 million American workers and retirees participating in over 35,000 private-sector defined benefit pension plans.
The agency is financed by insurance premiums from covered companies and by its investment returns.
The PBGC itself has taken a major hit from the strain of having to step in to rescue a string of ailing pension plans from steel companies – many of whom were already in bankruptcy court when the agency got involved. (See PBGC Exec: Pension Insurer Hit by ‘Perfect Storm’ ).