PBGC Takes Chicago Auto Parts Maker Plan

May 5, 2006 (PLANSPONSOR.com) - The nation's insurer of private-sector pension plans on Friday announced that it had taken over a plan for 600 former workers at a bankrupt Chicago auto parts manufacturer.

A news release from the Pension Benefit Guaranty Corporation (PBGC) said it had assumed responsibility as of May 1, 2006 for the Jernberg Industries Inc. Pension Plan, which it said was 47% funded, with $10.3 million in assets to cover nearly $22 million in promised benefits.

The agency said in the announcement that it expects to be liable for $10.2 million of the $11.7 million shortfall and that assumption of the plan will have no material effect on its balance sheet, as an estimate of the liability was included in its fiscal 2005 financial statements. The pension plan terminated as of September 7, 2005.

The PBGC said it stepped in because the pension plan faced abandonment after Jernberg sold substantially all of its assets and no purchaser was willing to assume the plan.

Jernberg Industries Inc. retirees who draw a benefit from the PBGC may be eligible for the federal Health Coverage Tax Credit. Further information may be found  here .