WCI Steel’s parent corporation, The Renco Group Inc., has agreed to assume sponsorship of the plan, according to the announcement. The federal bankruptcy court in Akron, Ohio, today confirmed WCI’s modified plan of reorganization, which includes Renco’s agreement to assume the pension plan.
As part of a negotiated settlement, the WCI agreed to contribute $15.3 million to the plan upon its emergence from Chapter 11 and another $5 million in each of the next two years, subject to certain conditions, while Renco will be responsible for paying all future contributions to the plan.
As a result of the agreement, the PBGC said it will withdraw the enforcement action it filed in February (See PBGC Fights to Avoid Taking Steel Company Plan ).
The PBGC’s preventive action was based on provisions of federal pension law that provide that members of a corporate “controlled group” are responsible for the pension liabilities of other group members. Because it acted before the controlled group was broken up by confirmation of the reorganization plan, Renco remained responsible for WCI’s pension obligations.