The Pension Benefit Guaranty Corporation (PBGC) took the action against Oneida Ltd and eight corporate affiliates after the missed July 15 pension payment, the Associated Press reported. In a Securities and Exchange Commission filing, the company also revealed plans to seek Internal Revenue Service approval to put off a total of $6.5 million in 2004 pension payments. As of July 31, the company said it had accrued pension liabilities of $35 million.
In May, Oneida sent letters to its 900 workers and approximately 1,500 retirees telling them it had missed a payment. It also froze pension accruals for current employees and stopped paying medical insurance for retirees.
has been in financial distress for some time with a $99.2 million 2003 loss and a $48.3 million loss in the second quarter of 2004.Company executives attribute the losses to increased competition from foreign factories. The company earlier this year closed or sold plants in Buffalo, China, Italy and Mexico, and two weeks ago announced that it would stop making its stainless steel forks, knives and spoons at its last remaining manufacturing plant. The company will close the plant during the fiscal first quarter and fire 500 workers, according to the news report.
The PBGC, which takes over private pension programs from ailing or bankrupt firms, typically steps in to file similar liens on available assets to protect its ability to continue making pension payments.