A PBGC news release said Gold Toe made a $1-million contribution to the pension plan on August 6, and will contribute $1 million more in equal installments beginning January 31, 2011 and ending on January 31, 2013. The company has also given the PBGC a $7.5-million security interest in its current and future personal property, largely composed of inventory and receivables.
If Gold Toe does not maintain its financial commitments to the pension plan, the PBGC may make a claim on these and other assets, the PBGC said in the news release. The agreement stems from the October 31, 2008 shutdown of the company’s Burlington plant, where 372 active participants in the Gold Toe Retirement Plan lost their jobs.
“The PBGC keeps an eye out for corporate transactions that might threaten pension plans,” said PBGC Director Joshua Gotbaum, in the news release. “We work with companies so they can achieve their goals while still protecting their workers and retirees.”
The Employee Retirement Income Security Act (ERISA), requires the agency to seek additional protection when more than 20% of a company’s employees covered by a pension plan lose their jobs due to a cessation of operations at a facility. Since 2007, under this program, the PBGC has obtained more than $600 million in additional protection for defined benefit plans covering over 60,000 workers and retirees.
Gold Toe Moretz, based in Newtown, North Carolina, is one of the largest manufacturers of socks in the world.