PBGC Steps In To Administer Outboard Marine Pensions

October 12, 2001 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) has taken over the underfunded pension plan of bankrupt Outboard Marine Corporation, and the benefits administration for the more than 10,000 people who worked there.

The Waukegan, Ill.-based manufacturer of recreational boats and engines is now in liquidation. Since no one is left to administer the pension plan, PBGC has become trustee in order to administer the plan and pay benefits.

Failed Attempt

Early this year, OMC asked PBGC to take over the plan (see NewsDash, Feb. 28, 2001 ).  However, subsequently the OMC board of directors notified PBGC that it had decided instead to try to terminate the plan in the private sector by finding an insurance company willing to assume OMC’s pension obligations (see NewsDash, March 16, 2001 ). At that point, the PBGC suspended its actions. However, the company’s attempts to complete a private sector termination were unsuccessful.

The Outboard Marine Corporation Employees’ Retirement Plan terminated as of August 17, 2001. Under federal pension law, the maximum pension guaranteed for workers in plans that terminate in 2001 is $3,392.05 a month (or $40,704.60 a year) for persons retiring at age 65, according to the PBGC. Maximum guarantees are adjusted for retirees at other ages or those who elect survivor benefits.

After a review of plan records, PBGC will notify affected retirees if it has to reduce payment of certain supplements and benefit improvements because the additional amounts may not be fully guaranteed under federal pension law.

Anyone with questions about benefits or wishing to retire may contact PBGC’s Customer Service Center 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 to be connected to 800-400-7242.