>The Port Neches, Texas-based manufacturer of synthetic rubber products has only $21 million in assets to cover $59 million in promised benefits. The nation’s private pension insurer estimates it will be responsible for $32 million of the $37 million shortfall , according to a news release.
Additionally, the company has failed to make more than $3.3million in required contributions to the plans. The pension plans endedas of February 29, 2004.
“The PBGC is stepping in because Ameripol Synpol meets the necessary legal criteria to transfer its underfunded pension plans to the federal pension insurance program,” said Acting Executive Director Vince Snowbarger in a news release. “The PBGC will ensure that retirees continue to receive their monthly benefit checks without interruption, up to guaranteed federal limits, and that other employees receive benefits when they are eligible to retire.”
>The company’s two defined-benefit pension plans are being transferred to the PBGC under the “distress termination” provisions of federal pension law, which allow companies to shed their pension obligations if they can prove such a step is necessary to emerge from bankruptcy.
The PBGC, created by the Employee Retirement Income Security Act (ERISA) to guarantee private-sector pension benefits, currently backs pension benefits for about 44 million American workers and retirees participating in over 31,000 private sector defined benefit pension plans. The agency is financed by insurance premiums from covered companies and investment income.