The Pension Benefit Guaranty Corporation (PBGC) said it will assume responsibility for the pensions of about 1,500 plan participants and retirees of Aladdin Industries LLC, Nashville,
According to a press release, the PBGC stepped in because the company failed to pay more than $16 million in legally required pension funding contributions. The agency also determined that the pension plan faces abandonment after Aladdin liquidated substantially all of its operating assets, with no purchaser willing or able to assume the plan. Aladdin, best known as a maker of thermal bottles, ceased manufacturing operations in 2002. The pension plan has been frozen since March 31, 2005.
According to PBGC estimates, the Aladdin Industries LLC Retirement Plan for Salaried and Hourly Employees is about 70% funded, with $38 million in assets to cover some $54 million in benefit liabilities. The agency expects to be responsible for the entire $16 million shortfall. The plan was formed in 2004 from the merger of two separate plans for hourly and salaried employees of Aladdin.
The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which terminated as of March 31, 2008. Assumption of the plan’s unfunded liabilities will have no material effect on the PBGC’s financial statements, according to generally accepted accounting principles.
Aladdin Industries’ retirees will continue to receive their monthly benefit checks without interruption, and other workers will receive their pensions when they are eligible to retire.
Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2008 is $51,750 per year (the maximum guaranteed amount is lower for those who retire earlier or elect survivor benefits – and certain early retirement subsidies and benefit increases made within the past five years may not be fully guaranteed).
Workers and retirees with questions may consult the PBGC Web site,www.pbgc.gov or call toll-free at 1-800-400-7242. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask for 800-400-7242.