A PBGC news release said the agreement with MTD Products Inc. stems from the July 28, 2009, closure of the Brownsville, Tennessee, plant, when 358 active participants in the Retirement Plan for Hourly Union Employees of MTD Products Inc. lost their jobs.
Under the agreement, MTD made an accelerated $4.2-million contribution to the plan on September 14. The payment will not be used to create a funding surplus in the plan that would reduce or preclude the company’s regular plan contributions. Additionally, MTD will waive a credit balance resulting from a $2.8-million plan contribution in excess of the minimum required contribution made on September 11, 2009, the PBGC said. .
Unlike situations where the PBGC assumes responsibility for failed pension plans, MTD’s plan, with more than 1,870 participants, has not failed, has complied with all funding requirements, and remains ongoing under the company’s sponsorship, the agency said.
“As businesses continue to change their staffing and manufacturing needs, we pay close attention to actions that may compromise pension plans,” said PBGC Director Joshua Gotbaum, in the news release. “We try to find ways that both meet business needs and protect workers’ retirements.”
The Employee Retirement Income Security Act (ERISA) requires the agency to seek additional protection when more than 20% of a company’s employees covered by a pension plan lose their jobs due to a cessation of operations at a facility.