Mich. Non-Profit Group Plan Possible Distress Termination Candidate
A Crain’s Detroit Business news account said the move would bring in the Pension Benefit Guaranty Corporation (PBGC). The PBGC is expected to be in Detroit Thursday to meet with the United Way and the 20 other non-profits that belong to the program. T he plan represents more than 2,000 past and present employees.
According to the most recent financial data made
available to plan members, the $22 million shortfall was at
end of 2006 and included numbers for non-profit employers
that disaffiliated at the end of that year.
The news account said the United Way for Southeastern
Michigan had the biggest individual liability with a
shortfall of $4.16 million. The two employers with the
next-largest liabilities were Detroit-based
Catholic Social Services of Wayne County, with a shortfall
of $2.23 million, and
Adult Well Being Services
in Detroit, with a shortfall of $1.15 million.
The plan was established in 1945 by
United Community Services
, (which merged with United Way in 1995), to lessen
administrative costs and improve benefit coverage for
smaller non-profits. It had been adequately funded
until 2004, but poor market returns and declines in
interest rates have increased agency liabilities.
In 2005, United Way froze the plan
.
Between then and July 2008, 20 agencies disaffiliated,
creating mirror plans to cover current and former
employees. Another five withdrew over the same period,
paying their liabilities and leaving their past and present
employees as “orphans” in the plan, according to the
account.
United Way replaced itself as plan administrator and
Mutual of America
as recordkeeper for the plan in July 2008. Toledo-based
Findley Davies Inc.
is now responsible for recordkeeping, while
Comerica Inc
. is overseeing investments and retiree benefits.