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Benefits February 1, 2008
PBGC Applauds Dana Corp's Bankruptcy End
February 1, 2008 (PLANSPONSOR.COM) - Auto parts
supplier Dana Corp. won public kudos from the Pension Benefit
Guaranty Corporation (PBGC) for emerging from federal
bankruptcy protection with its defined benefit plans
intact.
Reported by Fred Schneyer
A PBGC news release said that during Dana’s bankruptcy, the company continued to make its legally required funding contributions and consolidated 34 defined benefit plans into seven pension funds. The changes reduced Dana’s minimum funding contributions by $60 million through the year 2012.
The nation’s private-sector pension insurer said Dana’s actions “significantly improve” the financial health of Dana’s seven plans that cover more than 53,000 participants, of which almost 15,000 are active employees. By reducing the number of plans, Dana made its pension obligations more affordable and lessened the possibility that the plans would be assumed by the PBGC in the future, the agency said.
“Dana’s pension plans will remain under company
sponsorship, which means that no worker or retiree will
lose a single hard-earned retirement dollar,” said
Charles E.F. Millard,
PBGC director
. “I am pleased to say that by working with Dana’s
management over the course of the bankruptcy process, the
PBGC helped achieve this success. Dana should be commended
for keeping its pension commitments to its workers and
executing a successful turnaround that didn’t rely on the
PBGC as part of its exit strategy from Chapter 11.”
The PBGC announcement said the Dana situation was the
latest in a series of transactions in which the PBGC has
worked with companies to help them emerge from bankruptcy
with their DB plans still under the employer’s control.