Compliance May 2, 2012
PBGC Reaches Settlement of Pension Debt with Bendix
May 2, 2012 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) reached a settlement with Bendix Commercial Vehicle Systems LLC.
Reported by Rebecca Moore
The settlement ends a $16.6 million federal lawsuit over pension debt incurred from the company’s plant closing in Frankfort, Kentucky.
Federal law imposes liability when more than 20% of a pension plan’s members lose their jobs in a shutdown. All the Frankfort plant’s 63 workers were displaced after it closed in December 2007.
PBGC filed a lawsuit September 16, 2011, following a dispute over pension obligations related to the shutdown. Since the plant closing, Bendix has made $8.2 million in funding contributions beyond its normal requirements, which improved the funding status of the pension plan.
Under the settlement, PBGC will not require Bendix to put up collateral for the remaining $8.4 million in pension liability, provided the company remains financially strong until the end of the year. If the company’s financial position significantly weakens during that time, Bendix will provide a letter of credit for $8.4 million.