Under the agreement, Reynolds Packaging will pay more than $5.3 million into the plan over the next four years – about $2.3 million in contributions above the required minimum will be made this year, and just over $1 million will go into the plan in each of the following three years. The company also agreed that it will not use the additional contributions as well as certain contributions made prior to the agreement to offset future funding requirements, according to the announcement.
Reynolds Packaging made more than $1.8 million in excess contributions to the plan before it closed the Downingtown plant.
The agreement with the PBGC stems from the March 27, 2009, shutdown of the Downingtown plant where 114 workers lost their jobs. Unlike situations where the PBGC assumes responsibility for failed pension plans, the Reynolds Packaging Group Pension Plan for Hourly Employees of Downingtown Plant, has not failed and remains ongoing under the company’s sponsorship.
PBGC noted that the Employee Retirement Income Security Act (ERISA) requires the agency to seek additional protection when more than 20% of a company’s employees covered by a pension plan lose their jobs due to a cessation of operations at a facility.