PBGC Picks Up More Steel Pensions

September 5, 2001 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) has taken over the underfunded pension plans of bankrupt Northwestern Steel and Wire Co.

The plans, which covered 4,600 workers, are underfunded by about $160 million. 

The firms presenting the ten largest claims have accounted for more than half of all claims against the nation?s pension insurance system over its 25-year life, according to the Pension Benefit Guaranty Corporation (PBGC). Steel companies comprise three of the top five pension failures. 

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Steel “Deal”

The Sterling, Illinois-based producer of structural steel and related products filed for bankruptcy on December 19, 2000.

The company sponsored one pension plan for hourly employees and another for salaried employees, which together had assets of nearly $311 million to cover benefit liabilities of around $470 million, according to PBGC estimates. The plans were terminated effective August 28, 2001.

The maximum pension guaranteed for workers in plans that terminate in 2001 is $3,392.05 a month (or $40,704.60 a year) for persons retiring at age 65.

Additional information on Northwestern Steel and Wire is on the PBGC web site at http://www.pbgc.gov/northwestern/default.htm .

The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits.