PBGC Deal Adds $4M to AGF Pension

February 3, 2011 (PLANSPONSOR.com) – The Pension Benefit Guaranty Corporation (PBGC) has worked out an agreement to add $4 million in additional funding for the pensions of 9,000 employees and retirees of American General Finance Inc. (AGF).

A PBGC news release said AGF was a former subsidiary of the American International Group Inc. (AIG). The PBGC said it negotiated the agreement as AIG prepared to sell 80% of AGF to funds managed by affiliates of Fortress Investment Group LLC.

The sale is part of AIG’s divestiture of a number of businesses. The PBGC said it has reviewed each divestiture to determine whether it could jeopardize the pension plans sponsored by AIG. 

“One way PBGC protects pensions is to work with companies before they undertake major transactions,” said PBGC Director Josh Gotbaum, in the news release. “AIG’s actions demonstrate its commitment to its employees and retirees.”

The agreement is a product of the PBGC’s Early Warning Program, under which the agency monitors companies with underfunded pension plans and negotiates agreements to ensure that workers’ pensions are protected when transactions occur.