PBGC Assumes Pension Liability for Bakery Workers

October 19, 2010 (PLANSPONSOR.com) – The Pension Benefit Guaranty Corporation (PBGC) will assume responsibility for the pensions of almost 1,500 current and former employees of Interstate Bakeries Corp. (IBC).

A PBGC news release said IBC is now known as Hostess Brands Inc., and is headquartered in Irving, Texas, with operations based in Kansas City, Missouri. These workers and retirees earned benefits under the American Bakers Assn. Retirement Plan (ABA Plan), an ongoing multiple-employer pension plan that IBC had contributed to until 2008.

According to the agency, the PBGC divided the ABA Plan’s assets and benefit liabilities between IBC employees and those who are, or were employed by the ABA Plan’s other contributing employers. This division established the IBC Portion of the American Bakers Assn. Retirement Plan (IBC Portion). 

The IBC Portion will terminate as of October 20, 2010, and the PBGC will become responsible for the portion’s entire $82.5 million unfunded benefit liability, the agency said  The IBC Portion has no assets, as there were no funds in the ABA Plan attributable to IBC employees when the PBGC divided it.

The IBC Defined Benefit Plan, a separate pension plan sponsored by Hostess Brands Inc., remains ongoing and is not affected by the division of the ABA Plan or the termination of the IBC Portion.