The Pension Benefit Guaranty Corporation (PBGC) said the Fansteel Consolidated Employees’ Pension Plan ended as of December 15, 2003, with the PBGC assuming responsibility as of February 5, 2004. The plan has about $25 million in assets and $46 million in liabilities. Of the $21 million shortfall, the agency expects to be liable for about $19 million.
The plan, being accepted under the agency’s “distress termination program,” covers about 1,200 workers and retirees in its Lexington, Kentucky, and Gulfport, Mississippi facilities.
Employers can use the distress program if they can prove such a step is necessary for them to emerge from bankruptcy. In the case of Fansteel, the PBGC determined that the company and its subsidiaries could not afford to maintain the pension plan. Two other defined-benefit pension plans sponsored by Fansteel will remain in place, the agency said.
Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2003 is $43,977 per year. The PBGC takes over private pension plan from bankrupt or ailing companies and gets revenue from its insurance program for covered firms and investment income.