Get more! Sign up for PLANSPONSOR newsletters.
Compliance December 13, 2007
PBGC Reaches Agreement with Electrolux to Protect Pensions
December 13, 2007 (PLANSPONSOR.com) - The Pension
Benefit Guaranty Corporation (PBGC) announced it has reached
a $77.5 million agreement with Swedish-owned Electrolux Home
Products Inc. to protect the defined benefit pension benefits
of more than 2,350 former employees.
Reported by Rebecca Moore
Under the agreement, Electrolux agreed to waive an
existing $42.5 million credit balance in its pension fund
that would have excused Electrolux from making further
pension contributions up to that amount, the PBGC
announcement said. The agreement also calls for
Electrolux to make $35 million in additional
contributions to the pension fund over the next five
years.
The agreement covers the Electrolux Pension Plan
for Bargaining Employees at its Greenville,
Michigan, plant. At the time of the March 2006 Greenville
plant closing, the plan was 81% funded with unfunded
benefit liabilities of $77.5 million, PBGC said.
The Employee Retirement Income Security Act (ERISA)
requires the PBGC to seek protection when more than 20%
of a company’s employees covered by a pension plan
lose their jobs due to a plant closing.
“Once again the PBGC has been able to use the
statutory tools at its disposal to protect the retirement
benefits of American pensioners,” said PBGC Interim
Director Charles E.F. Millard, in the announcement.
“We appreciate Electrolux’s cooperation in
working with us to devise a solution that is in the best
interests of employees, retirees, and their
families.”