PBGC Takes Auto Parts Maker's Pensions

September 15, 2009 (PLANSPONSOR.com) - The nation's private sector pension insurer is taking responsibility for the underfunded pension plans covering about 900 workers and retirees at bankrupt auto parts maker Stant Manufacturing.

The Pension Benefit Guaranty Corporation (PBGC) said the pensions also cover workers and retirees at Stant’s Standard-Thomson Corp. affiliate, based in Connersville, Indiana, with other facilities in Pine Bluff, Arkansas and Troy, Michigan. Stant and its U.S. subsidiaries entered chapter 11 bankruptcy on July 27, 2009, the PBGC said.

According to a news release announcing the takeover the agency made the move because Stant was set to sell its assets as part of the company’s U.S. Bankruptcy court proceedings without the pension funds being part of that sale. The PBGC said that by taking the action before the asset sale, it matured a claim for the entire pension shortfall against Stant’s foreign assets.

Collectively, the Stant Pension Plan (Hourly Employees), the Pension Plan for Hourly Employees of Standard-Thomson (IUE), and the Pension Plan for Hourly Employees of Standard-Thomson (IAM) are 61% funded, with $14.3 million in assets to cover $23.4 million in benefit liabilities, according to PBGC estimates. The agency expects to be liable for $8.9 million of the $9 million shortfall.