The most recent involved two pension plans covering more than 2,400 hourly and salaried employees of Empire Specialty Steel Co., a Dunkirk, New York, producer of bar, rod, wire and specialty alloys that closed in July, according to the PBGC. The Empire plans were terminated as of August 31, 2001.
The steel industry has presented the PBGC with some of its largest liabilities on a historical basis, and the large retiree pension and health liabilities continue to represent a financial challenge for the beleaguered industry. Some of the older steel firms are currently lobbying for a government package that would permit the consolidation of those obligations (see other story) ? though a number of smaller firms in the industry oppose the bailout.
However, the PBGC is unlikely to absorb that burden all at once, according to a PBGC spokesman.
Empire Specialty Steel was formed in 1999 from the assets of bankrupt AL Tech Specialty Steel Corp. Empire?s two pension plans have total assets of nearly $137 million to cover benefits totaling around $144 million, according to PBGC estimates.
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, according to the PBGC, which insures the nation’s private pension plans.
PBGC estimates that most workers will receive the same benefit they are entitled to receive under the plans.
The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by more than 43 million American workers and retirees participating in private-sector defined benefit pension plans ? nearly 38,000 at present.