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Administration March 6, 2003
PBGC Assumes Consolidated Freightways' Pension Plan
June 3, 2003 (PLANSPONSOR.com) -The Pension Benefit
Guaranty Corporation (PBGC) has assumed the responsibility
for the pensions of more than 8,000 workers and retirees of
Consolidated Freightways.
Reported by Eric Hazard
The PBGC estimates the bankrupt Vancouver, Washington-based trucking firm’s corporate pension plan has about $228 million in assets to cover $504 million inpromised benefits. To help recoup the shortfall, the agency has filed claims against the company in bankruptcy court for the estimated $276 million. Consolidated Freightways also failed to make a $1.8 million required contribution that was owed to the plan by April 15, according to a news release.
Under federal pension law, the maximum guaranteed pension at age65 for participants in plans that terminate in 2003 is $43,977.24 ayear. Maximum guarantees are adjusted for retirees older or younger thanage 65 and for those who choose survivor benefits. Pension benefitincreases that have not been in effect for at least five years are notfully covered by PBGC, and some temporary benefit supplements for earlyretirees also may not be guaranteed.
Information about theConsolidated Freightways pension plan is available at the PBGC Web site, http://www.pbgc.gov/consolidated . Workers and retirees with additional questions may contact PBGC’s Contact Center toll-free at 800-400-7242.
The PBGC is an ERISA-established agency charged with protecting private-sector traditional defined benefit plans. Funded by insurance premiums paid by covered companies and PBGC’s investment income, the agency steps in to continue benefit payments for bankrupt or ailing companies.