PBGC Puts on Apparel Plan

April 22, 2002 (PLANSPONSOR.com) - The Pension Benefit Guarantee Corp. (PBGC), the government's pension insurance program will take over bankrupt Durango Apparel, Inc.'s defined benefit plan, which was terminated at the end of March this year.

The plan, which is underfunded by around $25 million, covers some 7,000 of the New York apparel company’s employees and retirees, according to the PBGC. The pension plan had assets of about $15 million to cover liabilities of about $40 million.

The agency will guarantee the basic pension retirement benefits of participants in the plan. Retirees will continue to receive their monthly checks and current workers will receive benefits after they retire.

Under federal pension law, this year the maximum guaranteed benefit for workers retiring at age 65 is $3,579.55 per month or $42,954.60 per annum. These numbers are adjusted for retirees older or younger than age 65 and for those who choose survivor benefits.

Durango Apparel, originally Henry I. Siegel Co., made clothing brands that include H.I.S., Chic and Durango, operating manufacturing plants in Tennessee and Kentucky, according to a news report from the Associated Press.

The PBGC is financed largely by insurance premiums paid by companies that sponsor pension plans.