Pittsburgh Brewing, maker of the well-known Iron City Beer, told the Pension Benefit Guaranty Corporation (PBGC) that it has lost $1.2 million from operations over three years, that it hasn’t made almost $900,000 in required pension contributions due since October 2004, and that the pension program is running a $5.6-million deficit, according to a news report from the Pittsburgh Post-Gazette. The plan covers about 530 current and former workers.
“Unless the plan is terminated, [Pittsburgh Brewing Co.] will be unable to continue in business,” lawyers for the brewery told PBGC officials in a letter dated April 29 obtained by the Post-Gazette.
The company’s pension plan covers salaried and hourly workers and pays about $1.6 million in benefits annually. Benefits were frozen when two plans were merged in 1995 into one program that is now about 70% funded, according to the newspaper.
Additional quarterly pension contributions of $455,000 are required next month and again in October.
As part of its case made to the PBGC that its financial distress is so acute that it needs to dump its pension plan on the private-sector pension insurer, Pittsburgh Brewing said that:
- it would not provide an annual financial statement because it couldn’t afford the $65,000 to hire an auditor
- lenders won’t finance $4 million in much-needed plant improvements because of the underfunded pension plan. The projects include replacing a 45-year-old keg system and $1.5 million to replace a 65-year-old boiler, which generates steam that powers equipment.The company said it was recently fined $300,000 because the boiler doesn’t meet pollution control requirements.
The news report said that Pittsburgh Brewing’s PBGC filing does not mention claims against the brewery by the Allegheny County Sanitary Authority, which says the brewery owes about $2.5 million in unpaid sewage bills. The brewery also did not mention tax liens for unpaid unemployment compensation taxes. According to Allegheny County court documents, the state’s Department of Labor and Industry is seeking $120,500 that was due for the first quarter, the Post-Gazette said. A similar lien was filed by the agency last year.
More information about the company is at http://www.pittsburghbrewingco.com/index.php .
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