Benefits June 27, 2002

Parade of Steel Plans to PBGC Continues

June 27, 2002 (PLANSPONSOR.com) - The parade of ailing steel industry pension plans in need of rescue continued wending its way across the Pension Benefit Guaranty Corporation's (PBGC) radar, with an announcement that the agency was taking over two more steel company plans.

Reported by

Fred Schneyer

The PBGC, which guarantees payments in private-sector traditional pensions if a company can’t make them, said the two plans of Freedom Forge Corp. cover more than 3,300 workers and are underfunded by a total of about $37 million. Freedom Forge, formerly known as Standard Steel, is a bankrupt producer of railway wheels and other steel products in Burnham and Latrobe, Pennsylvania.

PBGC Executive Director Steven Kandarian said his agency stepped in because the company was selling its assets as part of its bankruptcy case and that the purchaser had declined to assume control of the pension plans.

The two plans have combined assets of about $98 million to cover benefit liabilities of about $135 million according to PBGC estimates. They would likely be abandoned after the sale if the agency didn’t get involved, the PBGC said.

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 people retiring at age 65. Maximum guarantees are adjusted for retirees older or younger than age 65 and for those who choose survivor benefits.

Read more at PBGC Takes Over CSC Steel Pensions .

Read more at PBGC Takes More Steel Plans .

For more information, see the PBGC Web site .