The Charlotte, North Carolina-based construction and engineering firm’s pension has only $95 million in assets to cover $215 million in benefit promises. Of the $120 million in total underfunding, the Pension Benefit Guaranty Corporation (PBGC) estimates that it will be liable for about $104 million, according to a news release.
“The PBGC is stepping in because JA Jones has missed $7.5 million in required contributions and the pension plan is likely to be abandoned by the liquidating company,” PBGC Executive Director Steven Kandarian said in the release. On a separate note, Kadarian recently announced plans to resign his post at the PBGC (See PBGC Head Steps Down to Spend More Family Time ).
>The plan will end as of January 31, 2004, and the PBGC expects to become trustee within several weeks of that date. Once the PBGC becomes trustee of JA Jones’ pension plan, retirees will continue to receive their monthly benefit checks without interruption up to guaranteed federal limits. Other employees will receive benefits when they are eligible to retire. Federal guidelines call for workers in plans that terminate in 2004 to receive $44,386 per year for workers retiring at age 65. Maximum guarantees are adjusted for retirees older or younger than age 65 and for those who choose survivor benefits.
>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.