PBGC Takes over Pension for Vehicle Assembler

March 3, 2010 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) announced it will take responsibility for the underfunded pension plan covering more than 5,800 employees and retirees of New United Motor Manufacturing Inc.

New United Motor Manufacturing Inc. is the vehicle assembler owned jointly by Toyota Motor Corp. and Motors Liquidation Corp., the liquidating entity that remained after General Motors (GM) emerged from bankruptcy. The announcement said the company is preparing to end production at its Fremont, California, assembly plant on March 31, and the PBGC has determined the plan will be abandoned as a result and unable to pay benefits when due.

The agency estimates the New United Motor Manufacturing Inc. / UAW Hourly Defined Benefit Pension Plan is 55% funded, with assets of $161 million to cover benefit liabilities of $292 million. It expects to cover $126 million of the $131 million shortfall.

Until the PBGC becomes trustee of the pension plan, the plan will remain ongoing under company sponsorship. The agency will send notification letters to all plan participants when it becomes trustee. 

The plan ends effective March 3, according to the announcement.