PBGC Takes Second Kaiser Plan

July 29, 2004 (PLANSPONSOR.com) - The nation's federal private pension insurer on Thursday announced it had taken over the Kaiser Aluminum Inactive Pension plan, which it said has a $47 million shortfall.

The Pension Benefit Guaranty Corporation (PBGC) said the plan ended June 30 and that the agency formally took responsibility July 20 from the Kaiser Aluminum Corp. The plan has about $49 million in assets and $96 million in liabilities with the PBGC on the hook for the entire shortage.

PBGC officials said the latest loss comes on top of the $246 million claim the agency incurred in December 2003, when it took over the company’s pension plan for salaried employees (See   PBGC to Take “Extraordinarily” Underfunded Kaiser Plan  ).   Kaiser and its subsidiaries also sponsor six other defined-benefit pension plans, which remain ongoing, the agency said in its announcement.

The latest plan taken by the PBGC covers more than 2,900 former Kaiser employees, the agency said.

The PBGC’s initial estimate, which may change slightly upon review of plan documents, is that fewer than 1% of participants in the Kaiser Aluminum Inactive Pension Plan will be affected by federal pension payment limits.

The agency has been extraordinarily hard hit in recent years with tremendously underfunded plans – in large measure from the auto and steel industries.