A PBGC announcement noted that federal law requires companies to provide financial protection 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.
“Bendix continues to ignore its legal responsibility to these workers,” said PBGC Director Josh Gotbaum, in the news release. “We’ve tried to work with them in good faith, but now we have no choice except to take them to court. Make no mistake: PBGC will use every legal means to protect pensions.”
PBGC filed its lawsuit in the U.S. District Court in Cleveland on September 16, 2011, after Bendix declined to meet its obligations. The action against Bendix is the first time PBGC has had to go to court to compel a company to cover pension obligations from a plant closing, the announcement said.
Until now, companies that closed plants have worked with PBGC to settle their pension debts. Since 2007, PBGC has obtained more than $1 billion in additional protection for pension plans covering more than 120,000 workers and retirees.Bendix, which supplies brakes and vehicle control systems for trucks and commercial vehicles is headquartered in Elyria, Ohio, and owned by Knorr-Bremse AG of Munich, Germany.
« IRA Financial Group Clients Receive Solo 401(k) Education