The PBGC said it stepped in because Malden Mills, now in liquidation, missed $1.7 million in required pension contributions and the pension plan will be abandoned as a result of the sale of substantially all of the company’s assets. Retirees and beneficiaries will continue to receive their monthly benefit checks without interruption, according to the announcement.
According to PBGC estimates, the Malden Mills Industries Inc. Union Employees’ Pension Plan is about 51% funded, with $16 million in assets to cover nearly $31 million in benefit liabilities. The agency said it expects to be liable for $12 million of the $15 million shortfall. Assumption of the plan’s unfunded liabilities will have no material effect on the PBGC’s financial statements, the announcement stated.
The plan terminated on Mar. 30, 2007. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2007 is $49,500 per year. The maximum guaranteed amount is lower for those who retire earlier or elect survivor benefits.
Malden Mills filed for Chapter 11 bankruptcy protection on Jan. 10, 2007, and the sale of substantially all of the company’s assets to Chrysalis Capital Partners LP received bankruptcy court approval on Feb. 26. The Lawrence, Massachusetts-based company developed and produced “Polartec”, a synthetic material for insulating cold weather apparel.
Plan participants will receive notification letters within the next several weeks. Workers and retirees with questions may consult the PBGC Web site, www.pbgc.gov or call 800-400-7242.