Foamex, a producer of foam products primarily for
the transportation, health care and electronics
industries, is in chapter 11 bankruptcy and is preparing
to sell substantially all of its assets at a hearing set
for May 21. The PBGC said if it delayed action until
after the sale, the plan would face abandonment and there
would be no assets to pay the agency’s claims for
unfunded pension liabilities.
According to the announcement, the agency estimates the Foamex L.P. Pension Plan is 48% funded, with assets of $74 million to cover benefit liabilities of $153 million. It expects to cover $76 million of the $79 million shortfall. The plan was frozen as of December 31, 2007 for all participants except certain hourly employees at plants in Eddystone, Pennsylvania, and Tupelo, Mississippi.
The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ends on May 18, 2009. Retirees and beneficiaries will continue to receive their monthly benefit checks without interruption, and other participants will receive their pensions when they are eligible to retire.
Participants are subject to the benefit limits in effect on February 18, 2009, which set a maximum guaranteed amount of $54,000 for a 65-year-old.
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