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Compliance June 10, 2009
PBGC Takes Ohio Manufacturer's Plan
June 10, 2009 (PLANSPONSOR.com) - The Pension
Benefit Guaranty Corporation (PBGC) has taken over the
underfunded pension plan covering about 8,400 employees and
retirees of Milacron Inc., a bankrupt vendor of plastics
technologies and industrial fluids based in Batavia, Ohio,
near Cincinnati.
Reported by Fred Schneyer
A PBGC news release said its move comes as Milacron, in chapter 11 bankruptcy, prepares to sell substantially all of its assets to a new company. At a hearing set for June 26, Milacron will seek court approval of the sale transaction that will result in the abandonment of the pension plan to a liquidating corporate shell with no assets, the PBGC said.
By taking this action before the sale, the PBGC
explained in the announcement, it will mature its claim
for the entire pension shortfall against Milacron’s
foreign assets. The PBGC has previously filed liens
of about $3.6 million against these assets.
The agency estimates the Milacron Retirement Plan is 45%
funded, with $260 million in assets to cover $573 million
in benefit liabilities. The agency expects to be liable
for about $285 million of the $313 million shortfall. The
pension plan has been frozen since December 31, 2007. The
plan ends on June 10, 2009.
Other Milacron facilities are in Kansas, Michigan and Pennsylvania.
Assumption of the plan’s unfunded liabilities
will increase the PBGC’s claims by $284.5 million and
was not previously included in the agency’s fiscal
year 2008 financial statements, the agency said.
Under federal pension law, the maximum guaranteed pension
at age 65 for participants in plans that terminate in
2009 is $54,000 per year.
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