PBGC Takes Bankrupt Manufacturer's Two Pension Plans

June 19, 2007 (PLANSPONSOR.com) --The Pension Benefit Guaranty Corporation (PBGC) announced Tuesday that it has assumed responsibility for the pensions of more than 500 former employees of Specialty Filaments Inc.

A PBGC news release said the nation’s private-sector pension insurer stepped in because nearly $4 million in required contributions to the company’s two underfunded pension plans were due and unpaid, and the pension plans would be abandoned after Specialty Filaments completed bankruptcy liquidation.

The two plans are the Polymers Inc. Restated Pension Plan and the Retirement Plan for Union Employees of E.B. and A.C. Whiting Company. Together, the plans have assets of $4.2 million to cover $13.3 million in benefit liabilities, according to PBGC estimates. The agency expects to be responsible for about $8.7 million of the $9.1 million shortfall, the release said.

Both plans were terminated as of January 11, 2007, when Specialty Filaments filed for Chapter 7 bankruptcy. The company was a manufacturer of materials used in brushes and brooms based in Middlebury, Vermont.

The U.S. Bankruptcy Court approved a sale of substantially all of the company’s assets to an affiliate of the Thomas Monahan Co. of Arcola,  Illinois, in a transaction that does not include the pension plans, according to the news release.