Compliance June 12, 2002

Retirees No Longer Knitting their Brows over Pensions

December 18, 2001 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) will cover the pension benefits of the 2,100 employees and retirees of bankrupt Alamac Knit Fabrics.

Reported by

Camilla Klein

The company sponsored two pension plans, which have combined assets of about $16.6 million and liabilities of around $23.2 million.

According to the PBGC, the plans are underfunded by $6.6 million and were terminated at the end of August this year.

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Federal pension law dictates that the maximum pension guaranteed for employees in plans that terminate in 2001 is $3,392.05 per month, or $40,704.60 per annum, for those retiring at age 65.

Payments are adjusted for workers retiring at different ages or those who choose survivor benefits. According to PBGC estimates, nearly all the bankrupt textile factory workers will receive their full benefit.