Compliance March 24, 2010
PBGC Reaches Agreement on Pension with Auto Parts Maker
March 24, 2010 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) reached an agreement with BorgWarner, Inc., to strengthen the pension plan of almost 3,000 former workers at BorgWarner's shuttered facility in Muncie, Indiana.
Reported by Rebecca Moore
Under the agreement, BorgWarner made a $23 million cash contribution into the pension plan in December 2009, and will make additional cash contributions of $15 million per year in 2011, 2012, and 2013 in excess of any minimum required contributions, according to a PBGC announcement. The company will also provide $35 million in the form of a letter of credit or other security, and will waive a credit balance valued at $8 million in 2014.
BorgWarner is a manufacturer of automatic transmission parts based in Auburn Hills, Michigan, and the agreement stems from the April 2009 shutdown of the company’s Muncie plant. The announcement said the Muncie pension plan (Retirement Income Program of BorgWarner Diversified Transmission Products, Inc., Muncie Plant), has not failed and remains ongoing under the company’s sponsorship.