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Compliance May 5, 2006
PBGC Takes Chicago Auto Parts Maker Plan
May 5, 2006 (PLANSPONSOR.com) - The nation's insurer
of private-sector pension plans on Friday announced that it
had taken over a plan for 600 former workers at a bankrupt
Chicago auto parts manufacturer.
Reported by Fred Schneyer
A news release from the Pension Benefit Guaranty Corporation (PBGC) said it had assumed responsibility as of May 1, 2006 for the Jernberg Industries Inc. Pension Plan, which it said was 47% funded, with $10.3 million in assets to cover nearly $22 million in promised benefits.
The agency said in the announcement that it expects to be liable for $10.2 million of the $11.7 million shortfall and that assumption of the plan will have no material effect on its balance sheet, as an estimate of the liability was included in its fiscal 2005 financial statements. The pension plan terminated as of September 7, 2005.
The PBGC said it stepped in because the
pension plan faced abandonment after Jernberg sold
substantially all of its assets and no purchaser was
willing to assume the plan.
Jernberg Industries Inc. retirees who draw a benefit from
the PBGC may be eligible for the federal Health Coverage
Tax Credit. Further information may be found
here
.