According to an announcement by the Pension Benefit Guaranty Corp. (PBGC), Harvard Industries’ pension programs are underfunded by about $97 million with $116 million in assets to cover about $213 million in liabilities. The pension plans of Harvard, a bankrupt New Jersey auto-parts supplier, cover 9,100 workers.
The plans affected by the PBGC’s move include:
- Harvard Retirement Plan
- Albion Division Hourly Rate Pension Plan
- Bryan Division Hourly Rate Pension Plan
- Jackson Division Hourly Rate Pension Plan
- Spencerville Division Hourly Rate Pension Plan
- Doehler-Jarvis Pension Plan for Wage Base Employees.
All six plans terminated as of August 23, 2002, the PBGC said.
Much of the US steel industry has been in financial straits lately, sending a number of steelmakers into bankruptcy – and their pension plan obligations to the PBGC, insurer of the nation’s private pension system, including LTV, Empire Steel, and Northwestern Steel. In fact, PBGC officials have blamed the steel industry’s rampant pension woes as one reason for the big chunk out of its cash surplus.
Under federal pension law, the maximum pension guaranteed for workers in plans that terminate in 2002 is $3,579.55 a month (or $42,954.60 a year) for persons retiring at age 65. Maximum guarantees are adjusted for those who retire at ages younger or older than 65 or those who elect survivor benefits.
PBGC, created by ERISA, guarantees payment of basic pension benefits earned by more than 44 million American workers and retirees participating in over 35,000 private-sector defined benefit pension plans.
Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by PBGC’s investment returns.